Your credit score is used by lenders, insurance companies, and cell phone companies to find out the risk of doing business with you. Credit scores range from 300 to 850, and if you have a credit score of 720, most creditors consider that a good score. If you’ve learned your credit score is 720, your next question is probably “What can I get with a 720 credit score?”
Credit Score Ranges
Credit scores are usually divided into five categories: Exceptional, Very Good, Good, Fair, and Poor. The higher your credit score, the better your opportunities are to borrow money at the best rates. Scores over 800 are considered exceptional, and scores between 740 and 799 are usually considered very good. A score of 720 falls into the next category and most lenders consider 720 a good score.
Borrowing Opportunities with a 720 Credit Score
You’re likely to find many opportunities for credit cards and loans with a credit score of 720. You probably won’t have trouble being approved for credit cards that have incentives such as cash rewards. If you have a steady income and some money saved, you have a good chance of being approved for a car loan or mortgage. However, since there’s still room for improvement in your score, you may not get the best possible interest rate on the money you borrow.
Keep in mind that credit scores are constantly fluctuating. Each of the three main credit bureaus calculates your score based on slightly different information, so your credit score from each bureau is different. While 720 is a good score, you’ll save money on interest charges if you can bring your score up even higher. You’ll want to do everything you can to make sure that your score doesn’t go any lower.
Bringing Your Score Up Higher
If your score is 720, you’re probably already in the habit of paying your bills on time. For an even higher score, pay down your debt as much as you can. The percent of available credit that you’re using on revolving lines such as credit cards is known as credit utilization, and it has a big impact on your credit score. Try to keep your credit utilization below 30 percent and pay down your overall debt as much as you can.
Check Your Credit Reports
At least once a year, get a copy of your credit report from all three major credit bureaus. The easiest way to do this is by requesting them from AnnualCreditReport.com. Review what’s on your credit reports and make sure nothing is reporting incorrectly. If any of your creditors make a mistake and report a late payment that wasn’t late or reports a wrong balance, it can hurt your credit score, which costs you money in interest charges. Also, keep in mind that accounts you don’t recognize may be a sign of identity fraud.
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