A credit score is one of the most important factors that determine your financial health and access to credit. But what does a 700 credit score really mean—is it good or bad?
In this article, we will analyze if a 700 credit score is good or bad by exploring its implications across diverse facets like loan and credit card approvals, financial product eligibility, comparison with other consumers, and more. We will also provide tips to further boost your 700 score.
Is 700 a Good Credit Score?
Yes, 700 is considered a good credit score. It falls in the ‘good’ range on credit models, enables approval for most loans/cards with decent rates, grants access to housing and insurance, and signifies responsible management. Reaching 700 is an accomplishment for many.
What Credit Scoring Models Say
The main credit score model used in the US is the FICO score, which ranges from 300 to 850. In general, FICO considers scores:
- 800-850 as Very Good to Exceptional
- 740-799 as Good to Very Good
- 670-739 as Fair to Good
- 580-669 as Poor to Fair
- 300-579 as Very Poor
So while a 700 score falls in the Fair to Good band, it is towards the high end and considered the start of “good credit” territory. This aligns with most lenders viewing 700+ as good credit for approving loans and credit cards with decent terms.
VantageScore, the other main model, categorizes scores using the same ranges so a 700 is also classified as good there. Overall, credit scoring models agree that 700+ denotes good credit.
Loan and Credit Card Approval Odds
A 700 credit score enables approval for a wide range of cards and loans but may not get the rock bottom interest rates or largest limits reserved for higher scores.
- Auto Loans: A 700 score qualifies for competitive interest rates around 5-6% APR on average for 5-year used car loans. Very good scores of 750+ can potentially get below 3%.
- Mortgages: A 700 FICO score allows qualification for conventional mortgages with rates around 5.5% APR fixed. Exceptional 800+ scores can get closer to 4.5% APR.
- Credit Cards: A 700 score qualifies for most rewards cards like Chase Sapphire Preferred. But premium cards require very good 750+ scores for the highest approval odds.
So while not flawless, a 700 credit score provides access to crucial credit products to meet the major financial needs of car loans, home mortgages, and credit cards. There is room for some improvement but overall represents good access to credit.
How a 700 Credit Score Compares
- A 700 score is better than over 37% of consumers, per FICO’s national distribution curve. Over 60% of Americans fall below 700.
- 15% of consumers have Very Good/Exceptional scores above 750, making 700 look more ordinary by comparison.
- But statistically, a 700 score puts someone in the upper one-third of consumers with good credit or better. It clearly exceeds national averages.
Therefore, while not rare or exclusive, a credit score of 700 demonstrates above-average credit management compared to other consumers. It signifies disciplined financial habits.
Access to Financial Products
Beyond just loans, a 700 credit score also provides access to other financial products with reasonable terms:
- Rentals – Easily approved for most apartments with lower security deposits.
- Insurance – Qualifies for moderately-priced premiums from most providers.
- Jobs – Passes credit checks seeking financially responsible applicants.
- Down Payment Assistance – Eligible for most down payment programs that require 640+ scores.
So having a 700 credit score unlocks access to many crucial financial products beyond just credit itself. It represents a level of financial credibility.
While generally positive, some drawbacks exist:
- Missed chances for the lowest rates/fees reserved for higher 750+ scores.
- Risk of falling just short of a lender’s specific 700+ credit cutoff.
- Less protection against tightening credit in economic downturns.
- Reduced negotiating leverage for special exceptions that very high scorers may receive.
So there are still some advantages to climbing above 700 into the Very Good credit tier. But compared to poor/fair scores below 700, a 700 credit score itself represents significant financial opportunity.
How Age Impacts 700 Scores
The value of a 700 credit score also varies by age:
- For those under 25, a 700 score is extremely rare and denotes sage credit habits.
- Between 25-40, a 700 score enables financing major expenses with prime rates.
- In the 40-65 range, a 700 score unlocks wealth-building tools.
- For seniors, maintaining 700+ means continued access to affordable credit in retirement.
So a 700 credit score takes on greater significance for financing life’s major financial milestones across age ranges, even though it may be more common among older generations with lengthier credit histories.
The Psychological Importance
Reaching a 700 credit score holds psychological power as a tangible sign of achieving good credit. It represents crossing the finish line of creditworthiness. This feeling of accomplishment in turn motivates continued positive financial behaviors.
How Scores Differ by Gender
Research done by the Federal Reserve shows minor differences in average scores between males and females. Significantly more men have very high 800+ scores compared to women. However, a 700 score itself is considered sound for individuals of any gender.
A 700 credit score clearly falls into the good credit range, even though not classified as very good. The benefits it unlocks, such as access to reasonable loan rates, quality credit cards, and other financial products, underscore that a score of 700 is widely seen as good credit in practice. While higher scores confer additional advantages, a 700 score itself represents crossing the threshold into broad financial opportunity.