According to major credit scoring models like FICO, a 670 score is below the threshold for what is defined as “good credit.” You’ll likely get approved for credit cards and loans with a 670 score but will face higher interest rates compared to applicants with 700+ scores.
A 670 credit score is generally considered fair and on the cusp of good. While not a bad score per se, it falls short of the 700+ range that unlocks the most favorable loan rates and financial opportunities.
Boosting your 670 score to above 700 can save hundreds on financing costs for major purchases through improved loan terms. It also increases approval chances for top rewards credit cards and other perks tied to credit ratings.
So while a 670 credit score demonstrates responsible management of credit, there are advantages to improving it further. With diligent financial habits over 6-12 months, rising above 700 is an achievable goal for most individuals.
In this article, we’ll look at why elevating your credit score makes sense, how the scoring models work, and most importantly, smart strategies to improve your 670 score.
Why Getting Above a 670 Credit Score Matters
You might think a 670 credit score is fine for approval on loans and credit cards. In reality, you’re paying more than consumers with “good” 700+ scores. Here are 3 key benefits of leveling up your score:
1. Better Loan Rates
A 670 FICO score typically pays 0.5% to 1% higher interest on auto loans and mortgages compared to applicants above 700. That’s hundreds extra in interest charges annually. Every 30 points higher saves money.
2. Increased Approvals
Many top rewards credit cards with lucrative sign-up bonuses and perks require a minimum score of 700 or more for approval. A 670 score puts premium cards out of reach.
3. Lower Insurance Premiums
Auto and home insurance companies factor your credit score into pricing. Good credit (700+) saves you 10% or more compared to a driver or homeowner with fair/average scores around 670.
While your 670 credit provides basic access to financing, shooting above 700 saves serious money. Let’s look at how credit scores work.
What Determines Your Credit Score
FICO and VantageScore are the two main credit scoring models, with FICO most commonly used. Your three-digit score is calculated based on these factors:
– Payment History (35%) – Paying bills late hurts your score quickly. Stay current.
– Credit Utilization (30%) – Owing high balances relative to your limits damages your score. Keep it low.
– Credit Age (15%) – Having established accounts for years helps your score.
– Credit Applications (10%) – Too many new accounts dings your score temporarily. Apply sparingly.
– Credit Mix (10%) – Having different types of credit boosts your score.
FICO also considers your total debts owed. Optimizing all these factors facilitates raising your score.
Also Read: 700 Credit Score: Is It Good or Bad?
5 Proven Strategies to Boost Your Credit Score from 670
With diligent effort, improving your credit score from 670 to above 700 is very achievable within 6 to 12 months. Here are effective ways to get there:
1. Lower Your Credit Utilization
Experts recommend keeping utilization (balances divided by limits) below 30%. Get it down to 10% or lower to really amplify your score. Pay off cards aggressively.
2. Pay All Bills On Time
Payment history is #1 – nothing wipes out your score faster than a late payment. Set reminders and autopay if needed to never miss due dates.
3. Hold Off on New Credit
Each new account temporarily dings your score a few points. Avoid too many clumped new applications. Space them out over 6+ months.
4. Monitor Your Credit Reports
Review all 3 major credit reports every 4 months to spot errors early and monitor your progress. Dispute any inaccuracies found.
5. Mix up Credit Types
Having both installment loans and revolving card accounts boosts your score. Apply for a small personal loan for home improvement. Manage it prudently alongside credit cards.
With diligence, these steps make achieving 700+ very feasible. Aim higher, save money, and unlock better approval odds and financial terms.
How Age Impacts Attitudes Towards Credit Scores
A recent observation from the Federal Reserve in fact shows how age impacts perceptions of credit scores. Older generations often view them as purely utilitarian – just a tool for approving credit applications.
However, many young adults entering “adulting” attach greater meaning and emotion to their scores. They view milestones like reaching 700 as achievements denoting financial responsibility.
While perspectives vary by age, prudent habits benefiting your score remain universally helpful throughout life. The credit journey is one to personalize.
The Takeaway – Consistency Is Key
A 670 credit score is a decent starting point. With a focused effort on proven tactics over 6 to 12 months, breaching 700 is within reach.
Small, positive financial habits compound. regular credit monitoring provides feedback to fine-tune your approach. Milestones like 700 shouldn’t become obsessions. Consistency ultimately wins the credit marathon, not sprinting.
So make measured progress. Let your new diligent habits become routine, not chores. Before you know it, you’ll see the increased opportunities and savings from reaching that next credit score level.
Frequently Asked Question
Is a 670 credit score good or bad?
A 670 credit score is generally considered fair and on the cusp of good. While not bad, it falls short of the 700+ range for the best rates.
What does 670 mean for loan and credit approvals?
With a 670 score, you’ll likely get approved for loans and cards but face higher interest rates than 700+ scores. Many top rewards cards require 700+ for approval.
How does 670 compare to the average score?
The average FICO score is around 690-710, so a 670 is slightly below average.
How can I improve my 670 score?
Strategies to boost a 670 score include lowering credit utilization, paying bills on time, limiting new accounts, and diversifying credit types. Consistency over 6-12 months can raise it to 700+.
What are 670’s impacts on interest rates?
A 670 score pays 0.5-1% higher interest on loans compared to 700+ scores, costing hundreds more in financing charges.
Are products tailored for the 670 score?
There are no specific products just for a 670 score. But those with 670 can still access basic financing, just at less favorable rates than 700+ scores qualify for.