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When your credit score is 700, you can officially indicate that your credit is good. However, if your credit history is limited or your credit report is flawed, it may take time to get there. This guide will show you how to break through the 700 credit score range.
7 steps to get a 700 credit score
If you have not reached the 700 range, you may still have good credit.A kind Good credit score Usually any value higher than 670 to 680. However, getting your score above 700 is an important milestone. Follow the seven steps below to get there.
1. Pay all expenses on time
Yes, paying bills on time is an obvious first step. But it deserves to be repeated in any guide to improving credit, because it is by far the most important.
Your payment history accounts for 35% of your credit score, making it the most important Credit factorA missed or delayed payment will remain on your credit report for seven years, but your score will usually start to recover after two years.
To establish a payment history, your payment must be reported to the credit bureau. Credit card, installment loans and mortgage payments are usually reported to these institutions. But other bills, such as utility and mobile payments, are usually not reported unless you drag it so late that the account is sent to the collection office.
2. If you can’t get credit, get a security card
If your average credit score is far from 700 points, then the first step may not help because you may not have a credit score available.If your credit score is poor or No credit scoreTherefore, you cannot establish a credit history, which can make you feel stuck.
A kind Secured credit card It is a good fix. You deposit a deposit, which becomes your credit limit. The risk to the bank is very small, so even if your credit is poor, it is easy to get approval. Usually after a year or so of payment on time, your credit score will improve and you will be eligible for a regular credit card.
3. Repay the credit card balance
If you want to decide which debts to overcome first, start with credit card debt. Not only can you save money because credit card interest rates are usually higher than other debts, but you can also improve your credit score.
That’s because of you Credit utilization, This is the percentage of the outstanding credit you use, which will decrease when you pay the credit limit. Credit utilization is the second most important credit factor, accounting for 30% of your score.
Repaying car loans and student loans is very helpful to your financial situation. But reducing your loan balance will not reduce your credit utilization. This means that you will not get the same credit boost effect as lowering your credit card balance.
If you cannot pay off the full balance, please try to keep your credit usage below 30% of your credit limit.
4. Request to increase credit limit
If you already have a credit card and have been paying on time, please try to ask the card issuer to increase your limit. Increasing the limit can increase your score because it increases the amount of outstanding credit you have. Your credit utilization rate will decrease as a result.
Of course, if you do not increase your balance, increasing the limit will only reduce your utilization. Therefore, before you ask for more credit, promise to control your spending.
5. Keep the old account open
Your average Credit period 15% of your score is determined, so even if you only use the old credit card occasionally, your score will benefit from keeping the old credit card in use. Actually, Those with a credit score of 800 or higher Tell us that keeping their oldest credit card open is one of the important secrets for them to build good credit.
Keeping an open credit card account charging high fees may not be worthy of credit scoring benefits. But if the fee is low, please keep your credit account open.You can use them once a month to make small purchases that you would normally make, and then use cards that provide better Credit card rewards For larger purchases.
6. Optional application for new credits
When your goal is to get a 700-point credit score, be careful when applying for new credit. Although getting more revolving credit helps your score, every time you open a new account, your average credit age will decrease.Applying for a new account will also result in Hard inquiry To your credit report, this will temporarily affect your score.
7. Monitor your credit report
About one-fifth of credit reports contain errors, so your credit report must be monitored to ensure that your credit report is not among them. A free credit monitoring service that reminds you of changes in your score is a good starting point. However, you must view your actual credit report, which is the source of information that determines your score.
You are entitled to a free credit report from each of the three credit bureaus through the following methods every year Annual Credit Report.com. Make sure you identify all accounts and that the payment status and account balance are accurate. If there are any errors, please directly dispute the information with the credit agency.
Robin Hartill is Penny Hoarder’s certified financial planner and senior writer. She wrote a column of personal financial advice for Dear Penny.Send your tough money questions to [email protected]
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