Is 700 Considered To Be A Good Credit Score?

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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 a 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

So, what credit score should you have in order to qualify for a travel rewards credit card or a low interest rate on a mortgage – and would a credit score of 700 be acceptable?

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.

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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 2021the average FICO score was listed as 716 following a generally upward trend in average credit scores over the past 10 years. According to Experian40% 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 will not 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.

Experian Dark Web Scan + Credit Monitoring

On Experian’s secure site

  • Cost

  • Credit bureaus monitored

  • Credit scoring model used

  • Dark web scan

  • Identity theft insurance

Pros

  • Provides updates on your FICO® Score
  • One-time dark web scan
  • Has a credit score simulator

Cons

  • Only monitors one credit bureau report
  • Does not offer identity theft insurance

Experian Boost ™

On Experian’s secure site

  • Cost

  • Average credit score increase

    10+ points, though results vary

  • Credit report affected

  • Credit scoring model used

Mortgages

When banks or financial institutions determine the interest rate for a mortgage, they tend to look at a variety of different factors such as the debt-to-income ratio and the value of the down payment in addition to their credit history and credit score.

There are multiple types of FICO scores and while mortgage lenders do not usually work with the same one that’s used to make most lending decisions, they’ll consider a version of it that does not weigh as heavily on credit utilization. Most lenders, however, will still look at a person’s credit score to evaluate their creditworthiness. According to Federal Reserve Data67% of the mortgages that originated in Quarter 4 of 2021 were to borrowers with a credit score above 760, while only 2% were provided to subprime borrowers.

Here’s where having a higher credit score comes in handy, especially if you’re looking to snag a lower interest rate with better terms. For example, according to the myFICO Loan Center’s Home Purchase Center calculator, a person taking out a 30-year fixed $ 300,000 mortgage with a credit score above 760 could make monthly payments of $ 1,565. In contrast, anyone with a credit score of 639, for instance, could make monthly payments of $ 1,865, reflecting a difference of $ 300 each month. Over the course of a year, you would end up saving $ 3,600 just by having a higher credit score – that amounts to $ 108,000 in savings throughout the term of the mortgage.

Credit cards

Capital One Venture Rewards Credit Card

Information about the Capital One Venture Rewards Credit Card has been collected independently by Select and has not been reviewed or provided by the issuer of the card prior to publication.

  • Rewards

    5X miles on hotel and rental cars booked through Capital One Travel℠, 2X miles per dollar on every other purchase

  • Welcome bonus

    Earn 60,000 bonus miles once you spend $ 3,000 on purchases within the first 3 months from account opening

  • Annual fee

  • Intro APR

    N / A for purchases and balance transfers

  • Regular APR

    16.24% – 24.24% variable on purchases and balance transfers

  • Balance transfer fee

    3% for promotional APR offers; none for balances transferred at regular APR

  • Foreign transaction fee

  • Credit needed

The Chase Sapphire Preferred Card is another solid choice for those with good credit scores, with a welcome bonus of 80,000 bonus points for cardholders who spend $ 4,000 on purchases within the first three months of account opening – that’s worth about $ 1,000 in travel rewards when you redeem points directly through the Chase Ultimate Rewards® portal, though its also possible to transfer them to one of Chase’s airline or hotel loyalty program partners.

Chase Sapphire Preferred Card

  • Rewards

    $ 50 annual Ultimate Rewards Hotel Credit, 5X points on travel purchased through Chase Ultimate Rewards®, 3X points on dining, 2X points on all other travel purchases, and 1X points on all other purchases

  • Welcome bonus

    Earn 80,000 bonus points after you spend $ 4,000 on purchases in the first 3 months from account opening. That’s $ 1,000 when you redeem through Chase Ultimate Rewards®.

  • Annual fee

  • Intro APR

  • Regular APR

    16.24% – 23.24% variable on purchases and balance transfers

  • Balance transfer fee

    Either $ 5 or 5% of the amount of each transfer, whichever is greater

  • Foreign transaction fee

  • Credit needed

Top credit card options for folks with fair or average credit include the Petal® 2 “Cash Back, No Fees” Visa® Credit Card and the Capital One QuicksilverOne Cash Rewards Credit Card.

The Petal 2 Card is also available to those with no credit history and customers who need some help building up their credit score. The card does not charge an annual fee or foreign transaction fees and rewards include 1% cash back on eligible purchases right away and up to 1.5% cash back on eligible purchases after 12 on-time monthly payments are made.

The Capital One QuickSilverOne also has no annual fees or foreign transaction fees and allows cardholders to earn 1.5% cash back on all eligible purchases.

Capital One QuicksilverOne Cash Rewards Credit Card

Information about the Capital One QuicksilverOne Cash Rewards Credit Card has been collected independently by CNBC and has not been reviewed or provided by the issuer of the card prior to publication.

  • Rewards

    1.5% cash back on all purchases

  • Welcome bonus

  • Annual fee

  • Intro APR

  • Regular APR

  • Balance transfer fee

  • Foreign transaction fee

  • Credit needed

* Results may vary. Some may not see improved scores or approval odds. Not all lenders use Experian credit files, and not all lenders use scores impacted by Experian Boost.

Editorial Note: Opinions, analyses, reviews or recommendations expressed in this article are those of the Select editorial staff’s alone, and have not been reviewed, approved or otherwise endorsed by any third party.

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