720 Credit Score: Is It Good or Bad? - NerdWallet (2024)

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720 Credit Score: Is It Good or Bad? - NerdWallet (1)

A 720 credit score on the common credit scoring range of 300-850 is right at the border of “good” and “excellent.” In fact, when your score hits 720, you’ve just crossed over into the excellent score band. That’s great news, unless your score was higher and you’re worried about what a loss of points might mean.

If your 720 credit score is cause for celebration, keep in mind that scores fluctuate as new data flows into your credit reports. If your score has plunged to 720 because of, say, a late payment, you may no longer be eligible for the very best terms on financial products. Because your score is at the dividing line between excellent credit and good credit, you probably want to wait until you're more firmly in the excellent category before you apply for credit. With your 720 score, here’s how you compare:

A 720 FICO score is slightly better than the average FICO 8 score, which was 717 as of October 2023, up one point from a year earlier, according to FICO. A 720 score is significantly better than the average of 700 on the VantageScore 3.0 model, as of October 2023, up six points from a year before. You are in the excellent credit range, which is 720-850. But any drop in your score could move you back to the good credit range of 690-719.

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720 Credit Score: Is It Good or Bad? - NerdWallet (2)

What a 720 credit score can get you

Good or excellent credit can help you get better terms (like a lower interest rate) on loans, and may also be a requirement for apartment rental or for lower or no deposits when you have utilities connected.

Score is not the only factor, though. Creditors are also interested in how much credit experience you have. For example, a 720 credit score that comes primarily from someone else's credit cards that you were added to as an authorized user in the last year is not going to be quite as reassuring as a 720 credit score that comes from several years of solid payment history, where you were responsible for paying. Creditors may also consider such things as how much disposable income you have to cover a new payment, or your overall debt-to-income ratio.

Adding points to your score can give you more options. A score above 750 could help you qualify for 0% financing on cars and 0% introductory interest rates on credit cards.

That said, here are some things you might be able to get with a 720 credit score:

Car loans

A 720 credit score is in an area that credit bureau Experian describes as “prime,” but it’s well short of “superprime,” which begins at 781. You will pay more in interest on a car loan than someone with a higher score. Recently the difference was more than a full percentage point higher for new and used car loans. That’s a significant difference, and the rates are worse for lower scores. Your 720 credit score is lower than the average new-car buyer’s score of 735, but higher than the typical used-car buyer’s score of 675.

Home loans

Assuming you have enough income, a 720 credit score is likely high enough to help you get a government-backed mortgage such as an FHA for VA loan. However, it’s probably not high enough to get the lowest interest rates available.

Credit cards

A 720 credit score is going to look pretty good to most credit card issuers. The top-of-the line rewards cards may be out of reach, but you’ll likely be able to qualify for decent cards with rewards or cash back.

Personal loans

A 720 credit score will likely give you a choice of personal loans. It’s not a guarantee, though, because lenders look at many factors to arrive at a decision on approval.

Strategies to keep building your 720 credit score

If your score moved up to 720, you’ll probably see continued improvement from the momentum you’ve established by paying on time and keeping balances low. But if your score seems stuck at 720, or if its general direction is down, there are ways to address this.

Understanding what information in your credit reports has the biggest impact on your credit is a good place to start.

The tried-and-true ways actually do work. Here’s how to build your score.

Pay on time

A late payment can do some serious damage, and most credit scoring formulas are designed to hold a grudge. A late payment can damage your score, and the later it is, the worse the damage. Neglecting this will negate just about anything else you do to try to improve your credit.

Use credit lightly

If the amount you owe on your credit cards is anywhere close to your credit limits, your credit score will take a dim view of it. The best thing you can do is keep balances under 30% and pay them off in full. If you can’t do both, keep balances of all cards under 30%. This factor is called credit utilization, and it is a major contributor to your credit score.

Apply for credit sparingly

Avoid applying for a lot of credit in a relatively short period. Typically, a credit application results in a credit bureau checking your credit, and each hard inquiry can ding your credit score. Lots of credit applications in a short time can do more damage. Fortunately, the effect fades after about a year. Spacing applications out by about six months is the safest idea.

Keep credit cards open

We don’t mean you can never close a card, but think about it carefully if the card you're considering closing is one of your oldest cards or if it’s got a high credit limit. The age of credit and the percentage of your overall credit limit you use have a powerful effect on your credit score.

Check your credit reports

You want your credits report to be boring. Interesting things, like an address where you’ve never lived or an account that doesn’t belong to you, could signal identity theft. You’ll want to get to the bottom of that right away. Being mistaken for a same-name or same-address family member who has a sordid credit past could impact your score. You can access your credit reports from all three credit bureaus for free at annualcreditreport.com. Get errors corrected, and your score should reflect it.

Pay strategically

Once you have the big things covered, consider learning the strategies to add every point you can. Things like zapping small, lingering balances or making small, frequent payments can help.

Compare the same score

Credit scores are snapshots of a moment in time, and they're calculated on demand. That means they fluctuate, since they're based on the information in your credit reports at that given moment. The two major scoring companies, FICO and VantageScore, have several different scoring models as well, so your score can vary among them.

Do what you’d do if you were trying to figure out your “true” weight: Use the same scale every time you weigh yourself. Even then, it’s not going to be the same every time you step on. You should be within a few pounds, though, and trends will be evident no matter which scale you're using, right? Credit scores are similar. That means pick one source of a free credit score and use it to track your progress over time.

Smaller-impact things to know

Credit scores reward you for having a mix of credit cards (revolving accounts, in credit-speak) and loans such as mortgages and auto loans (installment accounts).

Be aware that if you co-sign for someone else, it’s not a character reference — it’s an agreement to pay if they do not. You are responsible for the full loan amount. Having that loan obligation could reduce your own borrowing power if you need to borrow money. And if the primary borrower pays late, your credit score is likely to suffer.

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720 Credit Score: Is It Good or Bad? - NerdWallet (4)

What happens to a 720 score with a late payment?

If it’s just a day or two late, pay up as quickly as you can, but don’t worry about score damage. Nothing gets reported to the credit bureaus unless you are at least 30 days late. The creditor could charge you a late fee, though. You could call the creditor and ask it to rescind the late fee. It’s best to do this when it has gotten your payment already and when you’ve rarely been late before.

If you do have a payment 30 or more days past due and it’s reported to the credit bureaus, it can do serious harm — and late payments stay on your credit reports longer than most other credit missteps. The higher your score is, the bigger the fall is likely to be. That is to say, it could fall about 100 points. But that’s not the worst thing that can happen. As a payment gets later — at 60 days past due, 90 days and so on — things can get uglier. The late payment can turn into a collection action, judgment, foreclosure or bankruptcy. Those can make the initial 100-point drop seem like it wasn’t all that bad.

Learn more about the good credit range

690 Credit Score695 Credit Score 700 Credit Score

705 Credit Score 710 Credit Score 715 Credit Score

720 Credit Score: Is It Good or Bad? - NerdWallet (2024)


720 Credit Score: Is It Good or Bad? - NerdWallet? ›

A 720 credit score on the common credit scoring range of 300-850 is right at the border of “good” and “excellent.” In fact, when your score hits 720, you've just crossed over into the excellent score band.

Is a credit score of 720 good or bad? ›

A 720 FICO® Score is Good, but by raising your score into the Very Good range, you could qualify for lower interest rates and better borrowing terms. A great way to get started is to get your free credit report from Experian and check your credit score to find out the specific factors that impact your score the most.

How much can I borrow with a 720 credit score? ›

You can borrow $50,000 - $100,000+ with a 720 credit score. The exact amount of money you will get depends on other factors besides your credit score, such as your income, your employment status, the type of loan you get, and even the lender.

What credit limit can I get with a 720 credit score? ›

What is a high credit limit?
Credit categoryCredit score rangeAverage credit line
Super prime720-850About $10,000
Prime660-719Less than $6,000
Near prime620-659About $3,000
Subprime580-619About $2,000

What credit score do you need to get a $30,000 loan? ›

In general, lenders extend $30,000 loans to borrowers with good to excellent credit, which is typically 670 and higher. But there may be lenders who lend to borrowers with bad credit. If you're having difficulty qualifying, you may consider getting a cosigner or co-borrower to help you get approved for the loan.

Can I buy a car with a 720 credit score? ›

There is no set minimum FICO® Score to get a car loan. However, a good score at 720 or better will get you the best rate. Consider spending some time improving your credit score before shopping for your next car.

Can you buy a house with a 720 credit score? ›

Many conventional loans allow you to borrow with a ”fair” credit score of 620 or higher, though your interest rate may be higher than it would be with a higher credit score. FHA loans can allow scores as low as 500, but will require a higher down payment.

How much house can I afford if I make $36,000 a year? ›

On a salary of $36,000 per year, you can afford a house priced around $100,000-$110,000 with a monthly payment of just over $1,000. This assumes you have no other debts you're paying off, but also that you haven't been able to save much for a down payment.

What percentage of people have a 720 credit score? ›

According to the latest credit score statistics, the average FICO score is 716, so a 720 is slightly above average. 67% of Americans have a score in this range or higher based on data from Experian®. You may be wondering how exactly FICO determines your score.

What credit score do you need to get a $20,000 loan? ›

Requirements for a $20,000 Personal Loan

This means they'll want to see your credit score, income level and DTI ratio. Requirements vary by lender, but most lenders require borrowers to have a credit score in the good to excellent range — meaning a score of at least 670.

What kind of house can I get with a 720 credit score? ›

Broadly speaking, a credit score of 720 or better makes conventional loans optimal, while scores between 680 and 720 may find favorable loan terms in conventional or FHA, and below 680 (or borrowers with less than 10% down) will likely find the best terms in FHA loans.

What if you have a 720 credit score? ›

With a 720 score, you're in between the excellent credit range (which is typically 750 and above) and the “fair credit” range (about 580 to 669). You may have access to more beneficial opportunities, including but not limited to: Potential access to better interest rates and loan terms.

How much would a 30k car cost a month? ›

If you have been qualified for a $30,000 car loan, the monthly payment depends on the amount of the down payment, interest rate, and loan length. For example, with a down payment of $2,500, an interest rate of 5%, and a loan length of three years, you will have to pay $824.20/month.

Can I get a 25k personal loan with a 700 credit score? ›

Typically, a desirable credit score for a $25,000 personal loan is around 670 and above, but some lenders work with those who have scores from 580 and up. Demonstrating that you have enough income to pay the monthly loan payments is essential. Lenders may request your pay stubs to assess income.

How much is the monthly payment on a $30 K loan? ›

The monthly payment on a $30,000 loan ranges from $410 to $3,014, depending on the APR and how long the loan lasts. For example, if you take out a $30,000 loan for one year with an APR of 36%, your monthly payment will be $3,014.

How do I get my credit score from 720 to 750? ›

Here are some of the best ways.
  1. Pay on Time, Every Time. ...
  2. Reduce Your Credit Card Balances. ...
  3. Avoid Taking Out New Debt Frequently. ...
  4. Be Mindful of the Types of Credit You Use. ...
  5. Dispute Inaccurate Credit Report Information. ...
  6. Don't Close Old Credit Cards.
Feb 7, 2021

Is an 800 credit score good? ›

Your 800 FICO® Score falls in the range of scores, from 800 to 850, that is categorized as Exceptional. Your FICO® Score is well above the average credit score, and you are likely to receive easy approvals when applying for new credit. 21% of all consumers have FICO® Scores in the Exceptional range.

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