Is a credit score of 720 good or bad?
Before we delve into whether a 720 credit score is good or bad, let’s first understand what a credit score is and why it matters.
A credit score is a numerical representation of an individual’s creditworthiness, ranging from 300 to 850. Lenders, credit card companies, and other financial institutions use credit scores to determine whether a person is a good candidate for a loan or credit card.
A higher credit score typically means that the individual is less of a financial risk and more likely to pay back the loan on time.
The Different Credit Score Ranges
Credit scores can be categorized into different ranges, which can give you an idea of where you stand in terms of creditworthiness. Here are the most common credit score ranges and what they mean:
- Poor: 300-579
- Fair: 580-669
- Good: 670-739
- Very Good: 740-799
- Excellent: 800-850
Now that we have an understanding of what credit scores are and the different ranges, let’s talk about whether a 720 credit score is good or bad.
Is a 720 Credit Score Good or Bad?
A 720 credit score falls under the “good” credit score range. People with credit scores in the “good” credit score range typically are doing pretty well, but there is still room for improvement.
With a 720 credit score, you may find it that you can qualify for loans, credit cards, and other financial products. However, you may still be offered slightly higher interest rates and slightly less favorable terms than someone with a higher credit score.
What Can You Do to Improve Your Credit Score?
If you have a 720 credit score, or want a 720 credit score, don’t worry. There are steps you can take to improve your credit score over time. Here are some tips:
Make payments on time: Payment history is the most crucial factor in determining your credit score. Make sure you make all your payments on time, and if you can’t, contact your creditor to work out a payment plan.
Reduce your credit utilization: Credit utilization is the amount of credit you use compared to your credit limit. Keep your credit utilization below 30% to improve your credit score.
Monitor your credit report: Regularly check your credit report for errors or inaccuracies. If you find any, dispute them with the credit bureau.
Build your credit history: The length of your credit history also impacts your credit score. If you’re new to credit, consider opening a credit card or taking out a small loan to start building your credit history.
While a 720 credit score is pretty good, you can still improve it. By taking steps to improve your credit score, you can qualify for better loan terms, lower interest rates, and credit cards with better rewards.
Keep in mind that improving your credit score takes time, so be patient and persistent in your efforts.
Hopefully this article has been useful for you to answer the question if is a 720 credit score good or bad.