Here we go again…
It’s time to look at one specific credit score. Today’s lucky number is “720.” Bingo! Anyone?
Before we get started, we need to apply the correct credit score scale to ensure we accurately gauge your creditworthiness.
720 Fico Score Just Above Average
On the Fico credit score scale, which ranges from 300-850, a 720 credit score is quite high, but still leaves plenty of room for improvement.
While it’s just above average, it’s still high enough to allow a consumer to apply for credit cards, auto loans, mortgages, and so forth with little trouble, at least with respect to credit criteria.
In other words, you have a good chance of approval, but you may not receive the lowest possible rate or the best terms with the aforementioned creditors.
So you might want to take a gander at your credit score to see why it’s slightly depressed – could be high outstanding balances or too many recent credit inquiries.
It’s doubtful that you have anything seriously negative on your credit report. And if there is something derogatory, it’s probably fairly old.
No need to worry here, but you definitely can and should do better.
720 VantageScore is Low-Average
If we’re talking VantageScore, which ranges from 501-990, a 720 credit score puts you in the low-end of their “C” bucket…so low average.
The average VantageScore is 748, so there is certainly work to do here to ensure you don’t get denied when applying for new credit, or get stuck with a higher interest rate than necessary.
Heck, your car insurance premium could even rise as a result of a mediocre credit score.
In this case, there’s a decent chance you have a late payment somewhere on your credit report, and you may also have high outstanding balances/credit utilization, along with too much recent credit.
The trifecta of bad credit habits, if you will – do the opposite of what I just mentioned and you’ll be golden by the way.
It’s by no means the end of the world, but it could serve you well to obtain your free credit score (typically via a credit score monitoring program) to see what’s holding you back, and what you can do to get in the good to excellent credit score range.
This is especially important if you plan to apply for a major loan anytime soon, such as an auto loan or a mortgage.