Is 700 a Bad Credit Score?
The FICO score is an incredibly significant number that may affect your financial status. This is a three-digit number that falls between 300 and 850; creditors employ it to assess your ability to pay if you apply for credit. Is this bad then if they have a FICO score of 700?
The Fico Score What it is
FICO is an acronym for Fair Isaac Corporation; this is the company that developed the raw algorithm used to determine a person’s credit score. Scores fall into the following ranges: Scores fall into the following ranges:
- 800-850: Exceptional
- 740-799: Very Good
- 670-739: Good
- 580-669: Fair
- 300-579: Very Poor
From the aforesaid credit scale, a credit score of 700 is in the “good” band of credits. However, whether this is good or bad FICO depends on a few things, as we shall shortly see.
Contribution to Loan and Credit Card Interest Rates
But 700 is not bad or good score in one sense or the other, it is just an average score of a set. Average scoring usually falls within the “good”, “very good”, and “exceptional” ratings, and individuals with such ratings are likely to be offered the lowest interest rates by the lenders. It means at 700 you are offered slightly higher interest rates than those offered to those with 720, for example. They may at times appear to be minimal but over the duration of financing the loan, they mean thousands to pay in interest.
While the Biggest Loans seem safe at 700, it may still be too low.
600 is actually at the lower end of this “good” credit rating bracket and 700 is closer to the average of this range. While that may be good enough to secure the credit card accounts and small loans, the larger credit loans are generally accessible only for those with better scores. For instance, most of the mortgage lenders have certain minimum credit score that applicants need to meet in order to be eligible for certain lenders’ lowest interest rates on jumbo home loans for instance, applicants need to have a credit score of not less than 720. Holders of credit scores of 700 may still be able to secure an approval but possibly at a higher interest.
Building Credit Takes Time
The score of 700 is a good one if one wants to borrow money for most of the purposes. Nevertheless, such people often have a great number of credit reports and all of them are characterized by strict compliance with payments. Do not despair if your score begins lower than seven hundred. Some of the activities that will help enhance your credit score include; ensuring that all debts are paid within the stipulated time and credit card utilization should be minimal. Having good habits that if kept on for a long time, should provide a 700 score for most of the people.
The Takeaway
Although 700 is not considered a high FICO score, it still meets most of the lenders’ expectations if one is considered a good credit holder. Another couple of years of positive credit history degrees the scores starting from 700, to very good category. Just a reminder, the higher your score the better off you are when it comes to applying for loans and credit card.
Call now for expert credit repair services: (888) 803-7889
Read More:
How long does it take to rebuild credit from 500?
What is the 11-word phrase in credit Secrets?
Does debt relief hurt your credit?
Can I recover from a 560-credit score?
Can you fix a 300-credit score?
