Is a Credit Score of 710 Good?
Gain insight into what your credit score signifies for your financial well-being and how to strategically manage it.
A credit score is a three-digit number representing an individual’s creditworthiness and their likelihood of repaying financial obligations. It is calculated based on information within a person’s credit history, including active accounts, total debt levels, and repayment behavior. Lenders utilize credit scores to assess the risk involved in extending credit, which can influence approvals for loans, mortgages, and credit cards.
Understanding Credit Score Ranges
Credit scores are generated using various models, with FICO and VantageScore being the most widely recognized. Both models range from 300 to 850, though their specific category breakdowns differ. A FICO Score of 710 falls within the “Good” range, defined as 670 to 739. For VantageScore 3.0 and 4.0, a 710 score fits into their “Good” range of 661 to 780.
These classifications provide lenders with a quick assessment of a borrower’s risk profile. A “Good” score, such as 710, signals to lenders that an individual is an acceptable borrower with a relatively low risk of default. The average FICO Score in the U.S. was 715 in 2023, placing a 710 score near the national average. A 710 score is positioned at the lower end of the “Good” FICO range, just below the “Very Good” category, which begins at 740.
Implications of a 710 Credit Score
A 710 credit score generally positions an individual favorably for various financial products, granting access to a broad selection of loans and credit cards. Lenders often view borrowers with a 710 score as acceptable and may offer competitive annual percentage rates (APRs) and higher credit limits. While it may not secure the absolute lowest interest rates, a 710 score will likely qualify for rates better than those offered to individuals with lower scores.
When seeking a mortgage, a 710 score allows individuals to qualify for rates in line with national averages, and it can increase approval odds compared to scores in the 600s. However, some lenders might require a larger down payment or impose slightly stricter terms for applicants in the “Good” range. For auto loans, a 710 score usually enables access to favorable terms, though borrowers with higher scores might receive lower average interest rates. Beyond traditional lending, a strong credit score can influence other areas, such as qualifying for utility accounts without a deposit or potentially receiving better rates on insurance premiums.
Maintaining and Improving Your Credit Score
Maintaining a credit score of 710 and striving for further improvement involves understanding and managing the key factors that influence its calculation. Payment history holds the most significant weight, typically accounting for 35% of a FICO Score and up to 40% for some VantageScore models. Consistently making all debt payments on time, including credit cards and loans, is important. Even a single payment delayed by 30 days or more can negatively affect scores.
Credit utilization, which is the amount of revolving credit used compared to the total available credit, is another significant factor, influencing about 30% of a FICO Score and being highly influential for VantageScore. It is advisable to keep credit card balances low, ideally below 30% of the available credit limit, to demonstrate responsible credit management. A lower utilization ratio indicates less reliance on credit and can positively impact scores.
The length of credit history also plays a role, accounting for approximately 15% of a FICO Score and around 20% for VantageScore. A longer history of successfully managing credit accounts generally benefits scores, highlighting the importance of keeping older accounts open and active. While a diverse mix of credit types, such as revolving accounts (credit cards) and installment loans (mortgages, auto loans), contributes to about 10% of a FICO Score, it is not advisable to open new accounts solely for this purpose.
New credit inquiries, generated when applying for loans or credit cards, can cause a small, temporary dip in scores, typically less than five points for FICO. These “hard inquiries” remain on a credit report for up to two years, though their impact on the score usually lasts for 12 months. Limiting new credit applications to only what is necessary and avoiding multiple applications within a short period helps mitigate this effect. Regularly checking credit reports from Experian, Equifax, and TransUnion for accuracy is important, as errors can negatively affect scores.