Your credit score represents your entire credit history and the first thing financial institutions look at when considering you for a credit card or loan.
With all the advantages that come from having the best credit, it’s no wonder so many of us are worried about how our creditworthiness measures up.
Understanding credit scores
You have two credit scores: one sold by the Fair Isaac Corporation (FICO) and one, called VantageScore, marketed by the three major credit bureaus — Equifax, TransUnion, and Experian.
Banks, credit unions, and other potential lenders purchase access to your score and use it to assess the risk level of lending money or extending credit to you.
Both FICO and VantageScore use the same information compiled by the credit bureaus to calculate their scores, but their methods of analysis and credit scoring models are different. Although VantageScore is gaining popularity, FICO remains the most popular of the two, with 90 percent of lenders using it in their decisions.
FICO calculates its score based on payment history (35 percent), credit utilization (30 percent), length of credit history (15 percent), new credit (10 percent), and credit mix (10 percent). The result is a three-digit number on a scale from 300 to 850, with lower numbers signifying more risk and higher numbers, less risk.
According to FICO, 711 is the average credit score in the United States in 2021.
But what about a 750 FICO score?
Credit score ranges based on FICO score
The table below shows the basic FICO score categories from poor to exceptional:
Is 750 a good credit score?
As you can see, FICO lists a credit score of 750 as “Very Good.”
You’ll qualify for most personal loans, car loans, credit cards, and other lines of credit. You’ll also get easier credit approval, lower interest rates, and overall better loan terms — like higher credit limits, bonus cash-back programs, or better mortgage rates — than someone with good or fair credit.
You might also have better chances of renting your ideal home and receiving better car and home insurance rates, depending on where you live.
How to get a 750 credit score
If you have poor credit and want to improve your score, follow these basic guidelines:
Pay your bills on time
Your payment history makes up 35 percent of your FICO score. That’s why it’s essential to always pay your bills on time. Late and missed monthly payments significantly damage your credit score because they signal to lenders that they risk not getting their money back from you.
A bit of discipline goes a long way. Budget your expenses, draw up a payment schedule, and set alerts if necessary. The more timely payments on your credit report, the better your credit score.
Pay off your credit card debt
Credit cards charge interest rates in double-digits. If you don’t pay off your entire credit card balance every month, your debt will increase exponentially, adding strain to your personal finances and severely damaging your credit score.
Never spend more money with your credit card than you have in your bank account, and set aside funds in advance to cover your bill. If you tend to overspend, consider leaving your credit card at home or hide it to avoid impulsive online purchases.
Monitor your credit reports
Errors and identity theft can wreak havoc on your credit score, so monitor your credit reports for any suspicious behavior. The information they contain will also help you get a clear picture of your overall financial health.
You’re eligible for a free credit score report once a year from each of the three major credit bureaus. All three are available at Annual Credit Report.com. Carefully review your reports and dispute any errors you find with the credit bureau or the lender.
How to keep your 750 credit score
Your work isn’t finished when you reach the score you want. By maintaining good financial habits, you’ll ensure that your score remains stable.
Keep credit utilization low
The amount of available credit you use determines your credit utilization ratio. To maintain an excellent credit score, you should keep your utilization ratio below 30 percent. That means that if you have a $10,000 limit, you should never let your balance exceed $3,000.
Don’t max out your credit cards and pay off your balances often to keep your utilization ratio low. The less credit you use, the higher your score.
Avoid hard inquiries
Lenders perform a hard inquiry into your credit report every time you apply for a new credit account or loan, so avoid applying for credit unless you absolutely need it.
How to improve your score to 800
While 750 is a very good score, it isn’t the best. Banks issue exclusive credit cards based on credit scores, so if you want to gain access to the best rates and the best credit cards, you’ll need excellent credit.
You can take a few more steps to improve your score and get it to 800.
You can’t rush the best credit scores. Remember the length of your credit history counts for 15 percent of your FICO score. To be rated as exceptional, you need to have accumulated a significant amount of quality borrowing experience.
Get higher credit limits
Your credit card issuer will likely offer to increase your credit limit with time and good behavior. If you can increase your limit without increasing your spending, your credit utilization rate will drop. You can also request a higher limit, but remember that too many requests over a short period risks racking up hard inquiries on your credit report.
Mix up your debt
Credit mix counts for 10 percent of your FICO score, so engaging in various borrowing practices might give your score the boost it needs. But too much activity in a short amount of time doesn’t look good. Plan to try a few different types of credit products over a longer time span.
The bottom line
You don’t need a perfect credit score to access most loans, credit cards, and lines of credit, so don’t worry. Focus on keeping an eye on your credit reports and maintain healthy spending habits.
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