How to Get Your Credit Score to 700

A credit score represents an individual’s creditworthiness, summarizing how reliably financial obligations have been managed. This three-digit number, often a FICO Score, is a significant factor lenders consider for loans, credit cards, or rental agreements. A 700 credit score is generally considered “good,” indicating a responsible credit history.

Achieving a 700 score unlocks financial benefits, including favorable loan terms and lower interest rates on credit products like mortgages, auto loans, and credit cards. It also leads to higher credit limits and improved approval odds, offering greater financial flexibility and saving money. Improving a credit score involves consistent positive financial habits across several key areas.

Establishing a Strong Payment History

Payment history is the primary factor in credit scoring models, accounting for approximately 35% of a FICO Score. It reflects on-time payments for all accounts, including credit cards, loans, and utility bills that report to credit bureaus. Consistently making payments by their due dates demonstrates reliability to lenders.

Missing a payment, particularly by 30 days or more, can harm a credit score. The negative impact increases with delinquency length; a 90-day late payment affects a score more than a 30-day late payment. Late payments can remain on a credit report for up to seven years, though their impact lessens over time.

To maintain a strong payment record, set up automatic payments for all recurring bills to prevent accidental oversights. Calendar reminders also help. While paying more than the minimum due reduces debt, the primary focus for credit scoring is on-time payments.

If facing difficulty making a payment, contact the creditor before the due date to potentially prevent a late payment from being reported. Creditors typically do not report payments as late until 30 days past due. Addressing missed payments swiftly and getting accounts current can mitigate long-term damage.

Managing Credit Utilization Effectively

Credit utilization, the amount of credit used relative to total available credit, is an important factor, influencing about 30% of a credit score. Maintaining a low credit utilization ratio signals responsible credit management. Keep this ratio below 30% across all revolving accounts; under 10% is ideal for excellent scores.

High utilization can negatively impact a credit score, suggesting higher financial distress risk. To manage this, pay down credit card balances. Making multiple smaller payments throughout the month, especially before the statement closing date, helps keep the reported balance low.

Increasing credit limits on existing accounts is another strategy, but only if you won’t increase spending. A higher credit limit, with the same balance, automatically lowers the utilization ratio. Conversely, closing old, paid-off accounts can inadvertently raise utilization by reducing total available credit.

Therefore, keep older accounts open, even if inactive, to maintain higher total available credit and lower utilization. Diligent management of credit utilization directly improves and maintains a strong credit score.

Building a Diverse and Established Credit Profile

The length of credit history contributes about 15% to a credit score. Older accounts generally have a positive impact. Lenders view a longer history of responsible credit use as a sign of stability. The average age of all open accounts, oldest, and newest accounts is considered.

Maintaining older accounts, even if inactive, helps preserve a higher average age of accounts. While a credit score typically requires at least six months of history, a longer established history is beneficial.

Credit mix accounts for about 10% of a credit score; a healthy variety of credit types can be advantageous. This includes revolving credit (credit cards) and installment loans (mortgages, auto, student loans). The impact of credit mix is less significant than payment history or utilization.

New credit activity, about 10% of a credit score, refers to recently opened accounts and inquiries. Opening too many new accounts quickly can temporarily lower a score due to hard inquiries and reduced average age of accounts. A hard inquiry occurs when a lender checks credit for a new application, causing a small, temporary score dip, typically remaining on a report for up to two years.

Conversely, a soft inquiry (e.g., checking your own credit report or pre-qualification offers) does not affect the score. Strategic applications for new credit, when needed, minimize score impact. Allowing a few months between new credit applications gives the score time to recover.

Reviewing Your Credit Report and Correcting Errors

Regularly reviewing credit reports from the three major credit bureaus—Equifax, Experian, and TransUnion—is important for financial health. This allows identification of inaccuracies negatively affecting your score. Free annual credit reports are available through AnnualCreditReport.com.

Common errors include:
Incorrect personal information
Accounts that do not belong to you
Inaccurate payment statuses
Duplicate accounts
Incorrect credit limits

Discovering such errors requires prompt action, as they hinder credit improvement.

To dispute an error, contact both the credit reporting company and the information provider. A written dispute should explain the error, provide supporting documentation (copies, not originals), and include account numbers. Sending the dispute via certified mail with a return receipt provides proof of delivery. Credit bureaus typically have 30 days to investigate a dispute. If the investigation confirms an error, the information must be removed or corrected, positively impacting the score.