Credit scores are a three-digit numerical representation of your financial health and can shift depending on your behavior. The FICO and VantageScore models are the two most popular credit scoring models.
Score classification includes five categories: poor, fair, good, very good, and excellent. Credit scores range from 300 to 850.
While there’s no ideal credit score, the higher it is, the more likely you’ll gain approval for loans and credit cards. Read on to learn more about what a credit score of 700 means, whether it's a good or bad score, and how to improve your credit score overall.
What it means to have a credit score of 700
According to data from Experian, one of the major credit bureaus alongside Equifax and TransUnion, the average FICO score in the U.S. as of 2021 is 704. This is a good score. (VantageScore’s scoring system is very similar.)
For further context, the five FICO score ranges are as follows: 300–579 is “poor,” 580–669 is “fair,” 670–739 is “good,” 740–799 is “very good,” and 800–850 is an "excellent" credit score. You can't have a credit score higher than 850.
21 percent of Americans fall within the “good” category.
Is it good to have a credit score of 700?
Yes, 700 is a good credit score. This score means you’re in good financial standing. 700 is on the lower end of FICO's “good” range. It’s always wise to keep improving your score so it doesn’t slip into the “fair” range instead.
Having a score of 700 offers access to a wide selection of credit cards and loans, including car loans, home loans, and personal loans, with lower interest rates.
What credit cards can you get with a 700 credit score?
The threshold score of 700 makes you eligible for many different credit cards.
You’ll have access to rewards cards, but they’ll be less than platinum or diamond cards that provide users with up to 6 percent cash-back rewards. Only individuals with excellent credit can receive platinum and diamond cards.
Citibank and Bank of America cards are easier to obtain than Discover, Chase, and Mastercard. The former two institutions are more forgiving when it comes to customer scores.
Remember that other factors like your income, debt, and payment history may influence your ability to receive a credit card. Your relationship with your local bank can play a role, too, since having a checking or savings account or shared history speaks to your loyalty and reliability as a customer.
How to improve your credit score
Five main factors compose your credit score:
One: Payment history.
This is the most significant aspect of your score, accounting for 35 percent of the calculation. Missed or late payments on your monthly balances or outstanding credit card debt can be detrimental, especially if this behavior persists, so always pay on time. Doing so helps you avoid interest or additional penalties.
One way to ensure that you don’t miss a payment due date is by setting up automatic payments or enabling notifications.
You can also add rent and utility payments to your credit report. These types of bills do not typically show up on your report, but you can submit a request to add them. If you have a healthy payment history, this can boost your score.
Two: Credit utilization.
Credit utilization is the second most important aspect of your score, accounting for 30 percent. Credit utilization refers to how much you’re using your card. “Maxing out” your card and exceeding your available credit limit will negatively impact your score. You can find your current utilization or balance on your credit card statement.
Experts recommend keeping your utilization rate below 30 percent to avoid any problems.
Three: Length of your credit history.
How long you’ve had your credit accounts makes up 15 percent of your score. This includes both new and old accounts. Banks and other lenders look at this section of your score to see if you’re able to manage credit over time in a responsible manner.
It’s better to keep accounts open instead of closing them since you’ll lose the activity associated with it, good or bad, and your credit score could drop.
Four: New credit.
New credit account applications make up 10 percent of your score. When you apply for a mortgage or a new credit card, a hard inquiry occurs. Card issuers and lenders request information surrounding your score as part of the evaluation process.
Multiple hard inquiries within a brief period can harm your score, and they remain in your report for two years. Don’t apply for everything that comes along. Experts recommend that you “rest” for six months or more before submitting a new account application.
You can also make inquiries into your own credit score report. This is a soft inquiry, and doesn’t impact your score. You’re also eligible for a free credit report once a year from any of the major bureaus, or you can request one from AnnualCreditReport.com. Staying informed about your credit is wise, so make sure you stay up to date.
Five: Credit mixes.
Your credit mixes make up 10 percent of your score also. Banks and lenders like to see that you’re able to manage multiple types of credit like a student loan, revolving credit like a credit card, or auto payments.
The bottom line
The better your credit score is, the more opportunities you have to achieve your financial goals. Once again, there’s no “perfect credit score,” but it never hurts to work towards increasing it. Depending on what scoring platform you use, your score will vary.
What one creditor considers “good” can differ from another, but a score of 700 or more tells banks and lenders that you’re not a big risk to do business with.
The realm of finances and credit may seem overwhelming, but having the right tools will help you manage your money. One fantastic tool to consider is PointCard.
Point is engineered as a transparent, easy-to-use alternative payment card that allows cardholders to exercise monetary independence and spend their own money as they wish. All users receive exclusive benefits, including unlimited cash-back and bonus cash-back on subscriptions, food delivery, rideshare services, and coffee shop purchases. You don’t need a credit score of 850 to reap the rewards you deserve.
Alongside the extensive rewards program that aims to help you build your wealth, Point comes with multiple safety measures that help you save and protect that wealth, too. Car rental and phone insurance, trip cancellation insurance, fraud protection with zero liability, two free ATM withdrawals every month, and no interest rates are just a few of these features.
No credit check is required to join Point. Currently, Point won’t help you increase your credit score, but it’ll help you maintain a good credit score while addressing your other financial issues and managing your money.
Made to spend.