Is 700 considered a good credit score?

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Having a good credit score can make a big difference when it comes to the interest rate you get on all types of credit, whether you are trying to get a home loan, a car loan or a credit card.

Here’s how it works: Three major credit bureaus – Experian, Equifax, and TransUnion – regularly collect information about your payment history, while your credit report provides additional details about your payment history, credit utilization conditions, and any open and closed credit accounts. The information in your credit report is used to calculate a three-digit credit score, which lenders then use to assess a borrower’s likelihood of defaulting on a loan. By having a higher score, you will typically qualify for loans or credit products with lower interest rates and more favorable terms.

There are two types of credit scoring models: FICO Score and VantageScore. Each model weighs a number of factors differently to determine if a borrower is likely to repay their loan on time and in full. FICO scores are more commonly used by lenders than VantageScores and can range from 300 to 850. Here is a look at the breakdown of each level:

FICO Credit Score Ranger

  • Very bad credit: 300 to 579
  • Reasonable credit: 580 to 669
  • Good credit: 670 to 739
  • Very good credit: 740 to 799
  • Excellent credit: 800 to 850

So what credit score do you need to qualify for a travel rewards credit card or a low interest rate mortgage – and would a credit score of 700 be acceptable?

Below, Select examines whether a credit score of 700 is considered good, how it is in relation to the national average, and what it means when it comes to getting a mortgage or a new credit card.

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How does a credit score of 700 really compare?

Achieving a credit score of 700 officially places you in the category of good credit score, even if it falls slightly below average. In April 2021, the average FICO score was stated as 716 following a generally upward trend in the average credit scores over the last 10 years. According to Experian, 40% of consumers have FICO scores lower than 700.

“The best-known interest rates for auto loans are 720+ and for mortgages 760+,” financial expert John Ulzheimer, formerly of FICO and Equifax, told Select. “As such, I always tell people, shoot for 760 or better. That way, they are safe for all loan types and cards.”

In other words, a credit score of 700 will still qualify you for better deals on credit cards, personal loans, mortgages and other types of credit, but it will not give you access to the same types of terms for a person with very good credit, or a credit score above 740, would have.

Moreover, credit scores are often just one of the many factors that lenders look at to determine creditworthiness, and your income and employment status can also play a role in the interest rate you receive.

You can check and monitor your credit score with a free credit monitoring service like CreditWise® from Capital One and Experian. And by using a service like Experian Boost ™ you can help you quickly raise your credit score * if you are trying to achieve a fair, good or excellent score.

Experian Dark Web Scan + Credit Monitoring

On Experian’s safe side

  • Cost

  • Credit bureaus are monitored

  • Credit scoring model used

  • Dark web scanning

  • Identity theft insurance

Advantage

  • Provides updates on your FICO® score
  • One-time scanning of dark web
  • Has a credit score simulator

Disadvantages

  • Monitors only one credit bureau report
  • Does not offer identity theft insurance

Experian Boost ™

On Experian’s safe side

  • Cost

  • Average credit score increase

    10+ points, although results vary

  • Credit report affected

  • Credit scoring model used

mortgages

When banks or financial institutions determine the interest rate on a mortgage, they tend to look at a number of different factors, such as the debt-to-income ratio and the value of the payout in addition to their credit history and credit score.

There are several types of FICO results, and although mortgage lenders do not usually work with the same one used to make most lending decisions, they will consider a version of the one that does not weigh so heavily on credit utilization. However, most lenders will still look at a person’s credit score to assess their creditworthiness. According to Federal Reserve Data, 67% of mortgages occurring in the fourth quarter of 2021 were to borrowers with a credit score above 760, while only 2% were given to subprime borrowers.

This is where it comes in handy to have a higher credit score, especially if you want to get a lower interest rate with better terms. For example, according to the MyFICO Loan Center’s Home Purchase Center calculator, a person taking out a 30-year fixed $ 300,000 mortgage with a credit score above $ 760 can make monthly payments of $ 1,565. In contrast, anyone with a credit score of 639, for example, could make monthly payments of $ 1,865, reflecting a difference of $ 300 each month. In a year, you would end up saving $ 3,600 just by having a higher credit score – that equates to $ 108,000 in savings over the entire term of the loan.

Credit card

Most reward cards with generous benefits and welcome bonuses will require applicants to have very good or excellent credit scores, or at least one greater than 740. Those with fair credit scores ranging between 580-669 are still eligible for credit cards, . But the types of cards available to them will typically come with fewer frills and perks.

If your credit score is considered a step up from fair, or at the good level between 670-739, you may be able to qualify for cards that offer great welcome bonuses and decent points or cashback rewards on your daily purchases. A credit score of 700 will still give you access to travel rewards credit cards, although you usually need to have a very good or excellent credit score to get a luxury credit card.

Select ranked the Capital One® Venture® Rewards credit card as the best travel reward credit card for those with good credit, as cardholders can earn 2X Capital One miles per dollar for each purchase. The card comes with an annual fee of $ 95 and there are no foreign transaction fees. You also have the option of earning 60,000 bonus miles if you spend $ 3,000 within the first three months after opening your account.

Capital One Venture Rewards credit card

Information on the Capital One Venture Rewards credit card has been collected independently of Select and has not been reviewed or provided by the issuer of the card prior to publication.

  • Rewards

    5X miles on hotel and rental cars booked through Capital One Travel℠, 2X miles per. dollars for every other purchase

  • Welcome bonus

    Earn 60,000 bonus miles when you spend $ 3,000 on purchases within the first 3 months of account opening

  • Annual fee

  • Intro APR

    N / A for purchases and balance transfers

  • Ordinary ÅOP

    16.24% – 24.24% variable on purchases and balance transfers

  • Balance transfer fee

    3% for promotional ÅOP offers; none for balances transferred to ordinary APR

  • Foreign transaction fee

  • Credit required

The Chase Sapphire Preferred® card is another solid choice for those with great credit scores, with a welcome bonus of 80,000 bonus points for cardholders who spend $ 4,000 on purchases within the first three months of account opening – worth around $ 1,000 in travel rewards when you redeem points directly through the Chase Ultimate Rewards® portal, though it’s also possible to transfer them to one of Chase’s airline or hotel loyalty program partners.

Chase Sapphire Preferred® Card

  • Rewards

    $ 50 annual Ultimate Rewards Hotel Credit, 5X points on travel purchased through Chase Ultimate Rewards®, 3X points on dining, 2X points on all other travel purchases and 1X points on all other purchases

  • Welcome bonus

    Earn 80,000 bonus points after spending $ 4,000 on purchases in the first 3 months from account opening. That’s $ 1,000 when you redeem through Chase Ultimate Rewards®.

  • Annual fee

  • Intro APR

  • Ordinary ÅOP

    16.24% – 23.24% variable on purchases and balance transfers

  • Balance transfer fee

    Either $ 5 or 5% of the amount for each transfer, whichever is greater

  • Foreign transaction fee

  • Credit required

Top credit card options for people with reasonable or average credit include Petal® 2 “Cash Back, No Fees” Visa® credit cards and Capital One QuicksilverOne Cash Rewards credit cards.

The Petal 2 card is also available for those with no credit history and customers who need help building their credit scores. The card does not charge an annual fee or foreign transaction fees and rewards include 1% cash back on qualifying purchases immediately and up to 1.5% cash back on qualifying purchases after 12 timely monthly payments.

Capital One QuickSilverOne also has no annual fees or foreign transaction fees and allows cardholders to earn 1.5% cash back on all eligible purchases.

Capital One QuicksilverOne Cash Rewards credit card

Capital One QuicksilverOne Cash Rewards credit card information has been collected independently by CNBC and has not been reviewed or provided by the card issuer prior to publication.

  • Rewards

    1.5% cash back on all purchases

  • Welcome bonus

  • Annual fee

  • Intro APR

  • Ordinary ÅOP

  • Balance transfer fee

  • Foreign transaction fee

  • Credit required

* Results may vary. Some may not see improved scores or approval odds. Not all lenders use Experian credit files, and not all lenders use scores that are affected by Experian Boost.

Editorial note: Opinions, analyzes, reviews or recommendations expressed in this article are solely those of the Select editorial staff and have not been reviewed, endorsed or otherwise endorsed by any third party.

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