Is 700 considered a good credit score?

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Having a good credit score can make a big difference in the interest rate you get on all types of credit, whether you’re trying to get a mortgage, car loan, or 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 rate and all open and closed credit accounts. The information in your credit report is used to calculate a three-digit credit score, which lenders then use to gauge the likelihood of a borrower defaulting on a loan. By having a higher score, you will generally 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 repay 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 is an overview of the breakdown of each level:

FICO credit score ranges

  • Very bad 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 would you need to have to qualify for a travel rewards credit card or a low-interest mortgage — and would a credit score of 700 be okay?

Below, Select examines whether a credit score of 700 is considered good, how it compares to the national average, and what that 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 compare?

Achieving a credit score of 700 officially places you in the good credit score category, although it is slightly below average. In April 2021, the average FICO score was 716, following a generally upward trend in average credit scores over the past 10 years. According to Experian, 40% of consumers have FICO scores below 700.

“The best published interest rates for auto loans are 720+ and for mortgages are 760+,” financial expert John Ulzheimer, formerly of FICO and Equifax, told Select. “As such, I always tell people to aim for 760 or better. That way they’re safe on all types of loans and all cards.”

In other words, a credit score of 700 will still qualify you for better deals on credit cards, personal loans, mortgages, and other types of credit, but it won’t give you access to the same types of credit. conditions that someone with very good credit, or a credit score above 740, would have.

Additionally, credit scores are often just one of many factors lenders look at to determine creditworthiness, and your income and employment status can 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 help you quickly boost your credit score* whether you’re trying to get a fair, good, or excellent score.

Experian Dark Web Scan + Credit Monitoring

On Experian’s secure site

  • Cost

  • Credit bureaus monitored

  • Credit score model used

  • Dark web analysis

  • Identity theft insurance

Advantages

  • Provides updates on your FICO® score
  • Unique dark web analysis
  • Has a credit score simulator

The inconvenients

  • Monitors only one credit bureau report
  • Does not offer identity theft insurance

Experian Boost™

On Experian’s secure site

  • Cost

  • Average increase in credit score

    10+ points, although results vary

  • Affected credit report

  • Credit score model used

Mortgages

When banks or financial institutions determine the interest rate for a mortgage loan, they tend to consider various factors, such as the debt-to-equity ratio and the value of the down payment, in addition to their track record. credit and their credit score.

There are several different types of FICO scores and while mortgage lenders don’t usually work with the same one used to make most lending decisions, they will consider a version that doesn’t weigh as heavily on credit use. However, most lenders will still look at a person’s credit score to assess their creditworthiness. According to data from the Federal Reserve, 67% of mortgages issued in the fourth quarter of 2021 were for borrowers with credit scores above 760, while only 2% were issued to subprime borrowers.

This is where having a higher credit score comes in handy, especially if you’re looking to get a lower interest rate with better terms. For example, according to myFICO Loan Center’s Homebuying Center Calculator, someone who takes out a $300,000 30-year fixed mortgage with a credit score above 760 could make monthly payments of $1,565. . In contrast, anyone with a credit score of, say, 639 could make monthly payments of $1,865, which reflects a difference of $300 each month. Over the course of a year, you’ll end up saving $3,600 just by having a higher credit score, which is $108,000 in savings over the life of the mortgage.

Credit card

Most rewards cards with generous perks and welcome bonuses will require applicants to have very good or excellent credit scores, or at least a score above 740. Those with fair credit scores, who vary between 580 and 669, are still eligible for credit cards, . However, the types of cards available to them generally had fewer frills and benefits.

If your credit score is considered a step up or at the right level between 670 and 739, you may be able to qualify for cards that offer significant welcome bonuses and decent points or cash back on your daily shopping. A credit score of 700 would still get you access to travel rewards credit cards, although you generally need to have a very good or excellent credit score to get a luxury credit card.

Select rated the Capital One® Venture® Rewards Credit Card as the best travel rewards credit card for those with good credit because cardholders can earn 2X the Capital One miles per dollar for every purchase. The card comes with a $95 annual fee and there are no foreign transaction fees. You will also have the opportunity to earn 60,000 bonus miles if you spend $3,000 within the first three months of account opening.

Capital One Venture Rewards Credit Card

Capital One Venture Rewards credit card information was independently collected by Select and was not reviewed or provided by the card issuer prior to publication.

  • Awards

    5X miles on hotels 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 of account opening

  • Annual subscription

  • Introduction AVR

    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 to regular APR

  • Foreign transaction fees

  • Credit needed

The Chase Sapphire Preferred® Card is another solid choice for those with good credit, with a welcome bonus of 80,000 bonus points for cardholders who spend $4,000 on purchases in the first three months after opening the account – this equates to approximately $1,000 in travel rewards when you redeem points directly through the Chase Ultimate Rewards® portal, although it is also possible to transfer them to one of the program partners airline or hotel loyalty from Chase.

Chase Sapphire Preferred® Card

  • Awards

    $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 spending $4,000 on purchases within the first 3 months of account opening. It’s $1,000 when you redeem through Chase Ultimate Rewards®.

  • Annual subscription

  • Introduction AVR

  • 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 fees

  • Credit needed

The best credit card options for people with average to medium credit include the Visa® Petal® 2 “Cash Back, No Fees” credit card and the Capital One QuicksilverOne Cash Rewards credit card.

The Petal 2 card is also available for those with no credit history and customers who need help building their credit score. The card does not charge annual fees or foreign transaction fees and rewards include 1% cash back on qualifying purchases immediately and up to 1.5% cash back on qualifying purchases after 12 one-time monthly payments.

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

Capital One QuicksilverOne Cash Rewards Credit Card

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

  • Awards

    1.5% cash back on all purchases

  • welcome bonus

  • Annual subscription

  • Introduction AVR

  • Regular APR

  • Balance Transfer Fee

  • Foreign transaction fees

  • Credit needed

*Results may vary. Some may not see an improvement in scores or approval ratings. Not all lenders use Experian credit reports, and not all lenders use scores impacted by Experian Boost.

Editorial note: Any opinions, analyses, criticisms or recommendations expressed in this article are those of Select’s editorial staff only and have not been reviewed, endorsed or otherwise endorsed by any third party.

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