Is 750 a good credit score? What are the benefits of a 750 credit score?-Bright
A credit score of 750 is often considered very good or even excellent, and is above the average credit score.
A score of 750 or higher can help you get better deals on mortgages and auto loans and land credit cards that offer additional perks and benefits. This is because borrowers with a very good score are less likely to default on their loan or payments.
Credit scores are a three-digit number ranging from 300–850, and it’s used by lenders to check your creditworthiness — how likely you are to pay back or default on a loan or credit line. The scoring system is simple: the higher your score, the better you look to a lender.
How easy is it to get a 750 credit score?
A credit score of 750 is not so impossible, but it does require commitment and consistency. Aside from paying your credit card bills on time and using only a portion of your credit limit, other factors such as avoiding mistakes and maintaining a clean payment record are also important for improving your score.
Another helpful tactic: consider establishing a plan that will allow you to track your progress. For instance, make use of the free credit score check offered by your issuer to know where your score stands.
Here are 3 ways to reach a 750 credit score:
1. Make timely bill payments-
Your payment history is the most important factor that a lender considers when it comes to assessing your financial health. It helps a lender determine if they’ll get back the money they’re loaning to you.
Having a poor credit history can indicate that you are either irresponsible or in financial trouble. With fewer late payments on your credit report, you can minimize their impact on your score.
2. Pay off credit card debts
Credit card debt can be very costly. It can strain your finances month after month. It also keeps your credit score low.
Paying off your credit card debts as quickly as possible, especially with on time payments, helps improve your score. You’ll also reduce your utilization ratio, a key factor in determining your credit score.
3. Make use of free credit monitoring
Sometimes card issuers and credit bureaus make mistakes, attributing transactions to you that you’ve never seen before. Those errors can seriously ding your score.
Make use of free credit monitoring to identify reporting errors — and prevent them from occurring in the future. With free credit monitoring, you can spot transactions that don’t belong to you, report them to your card issuer and rectify your report before it’s too late.
How to maintain and improve a 750 credit score?
A credit score of 750 is very close to perfect. But it doesn’t stick with you forever. A high score is something you have to continually earn.
Maintaining a high score requires consistency and commitment, sticking to responsible credit card use. But there are a couple things you can do to keep your score on track.
1. Lower your credit utilization
Try to use less than 30% of all your available credit. Your credit utilization is the second most important factor in calculating your credit score.
If you’re making a big purchase that uses a lot of your credit, make a payment or two within a single billing cycle. Pay down your high balance and get it below 30% before the close of your next statement. Multiple small payments made within each billing cycle is always a good idea — credit bureaus love it, seeing it as responsible behavior worth rewarding.
2. Avoid hard inquiries
When you apply for a loan or a line of credit, there will be a hard inquiry on your credit report, which can affect your credit score for up to six months. This type of inquiry is usually conducted to review your creditworthiness and to check if you qualify for the loan or credit line.
What are the benefits of a 750 credit score?
A healthy credit score can open a lot of doors. A score of 750, or even higher, can have significant benefits.
1. Better mortgage rates
Most mortgage lenders require a credit score of 650 or higher. With a score of 750, you’ll qualify more easily and get a better deal, maybe even a lower interest rate. However, home lending takes in many other factors, including your debt-to-income ratio.
2. Better car loan options
Your score plays a crucial role in your car loan’s interest rate. With a 750 score, you’ll likely qualify for a lower rate, significantly better than rates offered to people with much lower scores.
A lower interest rate translates to lower payments every month — and the potential for a larger loan for a nicer car!
3. Better credit card options
With a 750 score, you’ll have access to credit cards with some of the best perks. These include no annual fees, sign-up bonuses and travel rewards. You’ll probably also qualify for higher credit limits, giving you more options for spending throughout every month.
Recommended Readings:
The best day to pay your credit cards
5 tips for paying off credit card debt before interest rates start rising in 2022
Originally published at https://www.brightmoney.co.
