How To Get A Credit Score Of 700 Or 800 (Or More)
5-minute readSeptember 22, 2020
A credit score is a three-digit number that can have a big impact on your life. While a good credit score can open many doors, a bad credit score could leave you in a lurch.
A good credit score can lead to an affordable first home or the car of your dreams to name a few.
On the other hand, a bad credit score is more than just a number.
Credit scores are not static numbers. Since this number is not set in stone, you can work to improve your credit score.
If you aren’t sure where you stand, then use Rocket Homes Real Estate LLC to check your score now!
Let’s take a closer look at what a good credit score looks like and how you can achieve one.
Is A Credit Score Of 700 Good Or Bad?
A credit score is a three-digit number that aims to summarize your creditworthiness. Lenders can take a quick look at this number to determine what kind of risk you are. If you’re not great at repaying your debts, that would be reflected in a lower credit score.
VantageScore is one of the commonly used credit scores which runs on a scale from 300 to 850. The closer you are to 850, the better your creditworthiness. Generally, good credit scores range from 700 to 749. If you have a score between 750 and 850, then you fall in the ‘great’ range.
With a credit score of 700, you’re likely to be approved with favorable loan terms. If you have a credit score of 700 or higher, you should feel confident applying for financing.
How To Get An 800 Credit Score
A credit score in the 800s is a remarkable milestone. Although it will take time, it’s completely possible to achieve. Here’s how to get started:
- Pay all of your bills on time.
- Never max out your credit cards.
- Don’t apply for every credit card you see.
An 800 credit score is a great goal but it’ll likely take many years to reach this elite status as credit scores factor account ages into the score. As your average account age grows, so can your credit score.
Benefits Of A High Credit Score
A high credit score can supercharge your path to several common goals.
For most people, a high credit score is most important when they buy a home. A high credit score can equate to lower interest rates and more favorable terms. Over the life of your mortgage, you could save thousands with slightly lower interest.
Credit scores are looked at by many entities including loan officers, insurance companies, future landlords and potential employers. A high credit score will help you in any of these situations.
Credit Score Factors
Before we cover how to improve your credit score, let’s take a look at what a credit score includes. Each of these factors helps to determine the three-digit number with so much power.
- Payment history: Lenders want to know whether or not you make on-time payments.
- Length of credit history: Longer credit histories allow lenders to better understand your creditworthiness.
- Recent credit inquiries: Multiple credit inquiries can often hurt your credit score.
- Types of credit: Different account types such as credit cards and installment loans can increase your credit score.
- Credit Utilization: If you max out your credit cards, your credit score will suffer from a high utilization rate.
How To Improve Your Credit Score
Now that you know a little bit more about credit scores, you might be motivated to increase your credit score. Luckily, there are many ways that you can work to improve your score. Don’t be discouraged if you’re unable to increase your credit score overnight. It will take some time, but it will happen with intentional steps.
1. Check Your Credit Report
The first step you should take is to pull your credit report and check for errors. If you find errors, take the time to dispute them. You can do this through a simple digital process. Errors on your credit report could hurt your credit score.
2. Make On-Time Payments
Although it may seem obvious, on-time payments can significantly increase your credit score over time. Make it a habit to pay your bills on time. Try setting up auto pay if you’re prone to forgetting when bills are due!
3. Pay Off Your Debts
If you have any outstanding debt, work to pay that off as soon as possible. Although a creditor may one day give up on your outstanding balance, unpaid debt would greatly hurt your credit score.
4. Lower Your Credit Utilization Rate
A high ratio of debt to credit can negatively affect your credit score. You can either pay off this debt or apply for a credit increase to reduce your utilization rate. Another way to do this is by paying your credit cards off early each month so that your posted balance is lower than your spending for the month.
5. Consolidate Your Debt
If you have trouble keeping track of multiple accounts, consolidating could be a good option. You can consolidate multiple debts into a single installment payment. In this case, you’ll be free of multiple payments to keep track of. Plus, you’ll be working towards a higher credit score.
6. Become an Authorized User
If you have a trusted family member with a good credit score, you have an opportunity to dramatically increase your credit score. You can become an authorized user of their account in order to boost your score.
However, this can be a taxing emotional burden. If you don’t repay your debts, then you could hurt their credit score. Talk through the pros and cons with your family member before trying this method.
7. Leave Old Accounts Open
Even if you rarely use your first credit card, leave it open. Credit scores factor in the length of your accounts and a relatively old account can help to pull up your average account length.
8. Open New Account Types
Credit scores factor in the types of accounts you have open. If you only have one type of account open, that is likely hurting your score. If you only have a mortgage, then consider opening up a credit card account for more account types.
9. Open a Line of Credit at Your Bank
If you’re a longtime customer at your bank, you may be able to open a line of credit without a high credit score. With this line of credit, you’ll boost your credit-to-debt ratio and positively impact your credit score.
10. Open a Secured Credit Card
If you don’t qualify for unsecured credit cards, then a secured card could be the way to go. Secured credit cards are backed by a cash deposit, so even borrowers with poor credit scores can get one. Through this card, you’ll be able to improve your credit score by proving your creditworthiness with on-time payments.
11. Live Within Your Means
Another obvious tip, but it’s worth repeating. If you cannot afford something, then don’t put it on your credit card.
Apply For A Mortgage Online
How to Improve Your Credit Score: 8 Tips
A solid credit score is a critical component of your financial health. If you’re looking to improve your credit score, check out these 8 straightforward tips.
What Credit Score Do I Need To Buy A House?
When looking to buy your first house, it’s important to understand how your credit score can affect your mortgage eligibility. Check out our article to find out what credit score you need to a buy a house.