The 700 Credit Score - Is 700 a Good Credit Score?

A 700 credit score is more common that you might think. This score puts you in the medium risk category for creditors. What does that mean? It means that you will get good interest rates on most loans and credit cards.

Is 700 a good credit score? It is definitely a good credit score. It shows that you have taken efforts to build a good credit history and have good habits when it comes to managing your debt. As we had mentioned this score is fairly common and you can reach this score without difficulty if you are lower than this. If you are 700 or slightly higher, you can still take steps to boost your score. Increasing your scores by around 30-50 points can save you 1000's if not 100s of 1000s of dollars over the long term. So, you must be wondering about two things - why is my credit history so important? and how do I raise my score and start making changes today? Lets address these one at a time.

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Why is building a good credit history important? Your creditors have to assess the risk you pose when they loan you money. The better your credit history (no late payments, no collection activity and a record of making payments on time), the better your credit score will be. Need to buy a house? Want a student loan? Looking to open an equity line of credit to finance home renovation? When you go to a bank or other financial institution to discuss your options, whats the first thing they will look at before making a decision. Thats right - your credit score (which is essentially based on your credit history).

The 700 Credit Score - Is 700 a Good Credit Score?

Now, lets discuss the other side of things. How do you raise your credit score? There are a few specific actions you can take:

1) Get your 3-in-1 credit score

Get your scores from all three bureaus - Equifax, Transunion and Experian. Most creditors will take the median score from all three agencies. When you get your scores, you will realize that your credit report from the three agencies doesn't look the same. Were you very late on a rent check? Did you pay that library fine on time? For some late payments the chances are you would be reported to only one of the bureaus.

2) Make a list of ALL your credit accounts

Create an excel spreadsheet of all your credit cards, real estate accounts, home loans or any other debt that you have. Track the monthly payments you are making in this spreadsheet along with the interest rates and the balances owed. Then use online payments to automate paying off atleast the minimum payments towards these balances. You can't afford to fall behind from this point on. The other benefit to this form of tracking is the motivation you get from seeing your loan amounts shrink.

The 700 Credit Score - Is 700 a Good Credit Score?

What Is A Good Credit Score?

If you have ever gone shopping for a new car or made an attempt to purchase a new home then you are probably familiar with your credit score. Even if you haven't made any type of purchase that required you to obtain a loan or credit due to the amount of money involved you've probably still seen or heard the words credit score mentioned on the television or in a business or financial article. The reason for this is because our financial well being in today's complicated credit/loan society revolves around that very powerful three digit number known as our credit score.

There are many ways to explain what exactly our credit score is, but frankly trying to sort out the scientific and mental calculations involved only serves to give me one big giant financial headache. The main point to remember here is that the credit score determines an individual consumer's credit worthiness as seen in the eyes of the three main credit score companies or bureaus as they are sometimes called. The score is based on a combination of a consumer's current credit situation and their previous credit history with many additional mitigating factors.

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The three main credit bureaus are Trans Union, Equifax and Experian. Each company has developed (with the Fair Isaacs Company) their own unique method to determine your FICO (credit) score. Don't be alarmed by this because although each credit bureau has their own method for determining your credit score the numbers remain standardized across all three companies. For instance a 700 with Trans Union is equal to a 700 with Equifax and Experian.

So what exactly constitutes a good credit score? In order to determine that we first need to know the scoring parameters that makes up the scoring scale. As previously mentioned your credit score is influenced by a variety of factors such as outstanding debt, your credit history, the types of credit you current have or use and your payment history. These factors when analyzed form a score that can run anywhere from a low of 375 to a high of 830 or 900 depending on which expert you ask. These numbers generally serve as a guideline that a credit lender can then use to incorporate into their own credit rules that are tailored to their company's in-house credit program. However generally speaking a credit score higher then 650 has the potential to be considered good credit in most cases. The national average for the FICO credit score varies. I've seen it as high as 723 and as low as 676. With that said a consumer with a credit score higher then 700 is considered excellent, a credit score between 601 - 699 is decent and anything less then 600 could probably use a financial makeover in order to raise the credit score.

Keep in mind that these categories could fluctuate depending on the national average and also remember these numbers just represent a guideline for lenders to use when determining your credit worthiness based on the FICO credit score. It's their in-house line of credit rules and regulations that will ultimately decide if you have a high enough credit score to obtain financing at the most favorable terms offered by their company. Once thing is for sure the higher the credit score number the easier it is to receive credit and the more favorable the repayment terms are as far as interest rates go.

What Is A Good Credit Score?

How Will Foreclosure, Short-Sale, Deed-In-Lieu of Foreclosure, and Bankruptcy Affect A Credit Score?

Every day we have more and more clients ask us the question of how foreclosure affects their credit score vs. bankruptcy, or whether it may be more beneficial to short-sale a house rather than a bankruptcy, and the answer is always, "It Depends." This may seem like an evasive lawyer-like answer, but it is true. The answer always varies depending on each particular person's individual situation. No two people's credit situation is exactly alike; therefore, the answers will tend to change depending on the person's spending habits.

There are many different factors in the determination of your credit score, including things such as how long you have had credit, if you make monthly payments on time, how much credit you have available to spend, how many different credit accounts you have. How a foreclosure, short-sale, deed-in-lieu of foreclosure, or bankruptcy affects your credit score depends on what your credit score was prior to the foreclosure, short-sale, deed-in-lieu of foreclosure or bankruptcy.

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A foreclosure occurs when you are unable to pay your mortgage for a long period of time. The mortgage lender takes back your home to sell to someone else. A short-sale is when you sell your home for less than what you owe on the mortgage. You would need your mortgage lender's approval prior to the short-sale of the home. A deed-in-lieu of foreclosure is essentially giving title of your home back to your mortgage lender in exchange for having the debt forgiven and not having a foreclosure on your credit report.

A bankruptcy is when you receive a discharge of all your debts, and your personal liability for all of the debt is wiped out. For secured debt, like houses or cars, you can keep the property if you continue to make payments, but the lenders will not be able to pursue you for any deficiency if you choose to surrender the property in the bankruptcy.

Most people are surprised to know that foreclosure, short-sale, and deed-in-lieu of foreclosure have approximately the same impact on a credit score. All three of these ways to lose a home are reported to the credit bureaus as having the account settled for less than what was owed. People have always been under the impression that a short-sale may be better than a foreclosure, or signing a deed-in-lieu of foreclosure is better than either a foreclosure or a short-sale. However, the important factor in determining a credit score is how long an account has been delinquent, such as 30 days, 90 days or 120 days. Most of the time people that have a foreclosure, short-sale, or deed-in-lieu of foreclosure on their credit report have been delinquent on their mortgages for a long time. By the time the foreclosure, short-sale, or deed-in-lieu of foreclosure actually take place, the damage to their credit score has already been done. The higher your credit score is, the steeper the fall. The opposite is also true. If your credit score is already low, having a foreclosure, short-sale, or deed-in-lieu of foreclosure will not affect it as much. There is no such thing as having a negative credit score, so there's a limit to how low your credit score can go.

Filing bankruptcy generally lowers a credit score the most, because you are receiving a discharge of all your debts, so it has a bigger impact. However, if you are struggling under a mountain of bills and a mortgage you cannot afford, bankruptcy may be the best option for you, regardless of how it impacts your credit score.

How Will Foreclosure, Short-Sale, Deed-In-Lieu of Foreclosure, and Bankruptcy Affect A Credit Score?