How to Get a 700 Credit Score and Keep It

A credit score is a three-digit number that summarizes your credit risk, indicating how likely you are to repay borrowed money. Lenders use this score to determine whether to approve applications for credit cards, auto loans, mortgages, and other financial products. It also influences the interest rates and terms you receive, directly impacting the cost of borrowing. A score around 700 is considered a good benchmark, opening doors to more favorable financial opportunities and lower borrowing costs.

Components of Your Credit Score

Your credit score is calculated based on several key factors, each weighted differently to reflect its importance in predicting your creditworthiness. FICO, a widely used scoring model, weighs these factors to generate your score.

Payment history carries the most significant weight, accounting for about 35% of your FICO Score. This component reflects whether you have consistently made your debt payments on time, including credit cards, installment loans, and mortgages. Even a single payment reported 30 days or more past its due date can negatively affect your score, and these negative marks can remain on your credit report for up to seven years.

The amount of debt you owe, known as credit utilization, makes up 30% of your FICO Score. This factor assesses how much of your available revolving credit, like credit card limits, you are currently using. A lower credit utilization ratio indicates responsible credit management. Consumers aim to keep usage below 30% of total available credit, with optimal scores achieved closer to 10%.

The length of your credit history contributes 15% to your FICO Score. This factor considers the age of your oldest credit account, your newest account, and the average age of all your accounts. A longer history of responsible credit use signals greater reliability to lenders.

New credit accounts for 10% of your FICO Score. This includes how many new accounts you have recently opened and the number of hard inquiries on your credit report. A hard inquiry occurs when a lender checks your credit report after you apply for new credit, and each inquiry can temporarily lower your score by a few points, fewer than five. While hard inquiries remain on your report for two years, their impact on your score diminishes after 12 months.

Finally, your credit mix makes up the remaining 10% of your FICO Score. This factor evaluates the diversity of your credit accounts, such as having a combination of revolving credit (like credit cards) and installment loans (like mortgages or auto loans). While a varied credit mix can be positive, it is not necessary to have every type of account. Focus remains on responsible management of the credit you possess.

Actionable Steps to Improve Your Score

To improve your credit score, focus on consistent financial behaviors that positively impact its components. Specific strategies can help you build and maintain a strong credit profile.

Paying your bills on time is the single most effective action. Setting up automatic payments for all your accounts can prevent missed due dates. If you anticipate difficulty making a payment, contact creditors immediately to discuss options like deferred payment plans and avoid negative reporting to credit bureaus.

Managing your credit utilization rate effectively is another step. Aim to keep credit card balances as low as possible, ideally below 30% of your available credit limits. Pay down balances before your statement closing date, as the reported balance is what credit scoring models use. You might also consider requesting a credit limit increase on existing accounts.

Exercising caution with old credit accounts is advisable. Keep older, positive accounts open, even if you do not use them frequently. Closing an old account can reduce the average age of your credit history and decrease your total available credit, which could negatively impact your credit utilization ratio. Accounts in good standing can remain on your credit report for up to 10 years after closure, still contributing to your score.

Responsibly diversifying your credit portfolio can also contribute to a better score. This means having a mix of different types of credit, such as credit cards and installment loans. Only open new accounts when necessary and avoid taking on debt you cannot comfortably manage. For those with limited credit history, a secured credit card, backed by a cash deposit, can be a useful tool to build credit.

Applying for new credit mindfully helps prevent unnecessary hard inquiries. Each time you apply for new credit, a hard inquiry is recorded, which can slightly lower your score. While these inquiries have a small and temporary impact, numerous applications in a short period can suggest higher risk to lenders. Multiple inquiries for auto or mortgage loans within a short window, 14 to 45 days, are counted as a single inquiry to allow for rate shopping.

Regularly checking your credit reports for errors is important. You are entitled to a free copy of your credit report from each of the three major credit bureaus—Equifax, Experian, and TransUnion—once every 12 months through AnnualCreditReport.com. If you find inaccuracies, such as incorrect payment statuses or accounts that do not belong to you, you have the right to dispute them. To dispute an error, contact both the credit bureau reporting the information and the company that provided it, supplying supporting documentation. Credit bureaus have 30 days to investigate your dispute.

Sustaining a High Credit Score

Maintaining a high credit score requires ongoing vigilance and consistent responsible financial practices. The habits you develop to improve your score will help you keep it strong long-term.

Regularly monitoring your credit reports and scores is a key aspect of sustained credit health. This proactive approach allows you to quickly identify any suspicious activity, such as potential identity theft or fraudulent accounts opened in your name. Many financial institutions and credit card companies offer free access to your credit score, making it easier to track changes and understand your financial standing.

Continuing to prioritize on-time payments for all your financial obligations remains paramount. Consistent and timely payments demonstrate reliability to lenders and preserve a positive payment history, which is the most influential factor in your score. Even after achieving a high score, neglecting this habit can lead to a rapid decline.

Being mindful of how your financial decisions impact your credit over time is important. This includes understanding the effects of opening new accounts, closing old ones, and managing your overall debt levels.