Is 700 considered a good credit score? Here’s how it compares to the average American’s credit score
Select reveals whether 700 is a good credit score and how it relates to the national average.
Published Sun, May 1 2022Trina PaulSHAREShare Article via FacebookShare Article via TwitterShare Article via LinkedInShare Article via Email
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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’re trying for a home mortgage, an auto loan or 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 contains additional details regarding your payment history, credit utilization ratio 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 utilize to evaluate a borrower’s likelihood of defaulting on a loan. By having a higher score, you’ll typically qualify for loans or credit products with lower interest rates and more favorable terms.
There are two types of credit scoring models: the FICO Score and the VantageScore. Each model weighs a variety of factors differently to determine whether a borrower is likely to pay back their loans on time and in full. FICO scores are more commonly used by lenders than VantageScores and can range from 300 to 850. Here’s a look at the breakdown of each level:
FICO Credit Score Ranges
- Very poor credit: 300 to 579
- Fair credit: 580 to 669
- Good credit: 670 to 739
- Very good credit: 740 to 799
- Excellent credit: 800 to 850
Below, Select investigates whether a 700 credit score is considered good, how it compares to the national average and what it means when it comes to getting a mortgage or a new credit card.Subscribe to the Select Newsletter!
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How does a credit score of 700 really stack up?
Achieving a credit score of 700 officially places you in the good credit score category, although it does fall slightly below the average. In April 2021, the average FICO score was listed as 716 following a generally upward trend in average credit scores over the past 10 years. According to Experian, 40% of consumers have FICO scores lower than 700.
“The best published 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’re safe for all loan types and cards.”
In other words, a 700 credit score will still qualify you for better deals on credit cards, personal loans, mortgages and other types of credit, but it won’t give you access to the same types of terms someone with very good credit, or a credit score above 740, would have.
Furthermore, credit scores are often just one of the many factors lenders look at to determine creditworthiness, and your income and employment status may 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 using a service like Experian Boost™ can you help you quickly raise your credit score* if you’re trying to achieve a fair, good or excellent score.Please wait while you are redirected...or Click Here if you do not want to wait.