This article originally appeared on GOBankingRates.com: 10 Things to Do Now If You Have a 700 Credit Score
In order to be approved for new credit cards or loans, it’s vital to have a good credit score. But what is a good credit score? Credit scores around 700 are considered “good” by the Fair Isaac Corporation, or FICO. You might think you can cruise if you’ve got a score of 700, but you shouldn’t get complacent about your finances. Here’s what you should know about your good credit score — and what to do about it.
10 Things to Do to Raise Your 700 Credit Score
Your credit score is a combination of your payment history, debts, length of credit history, credit mix and new credit. Rest assured, 700 is a good credit score, but there are clear-cut ways you can improve a good score. Here are 10 valuable tips on how to get credit score above 700:
1. Check Your Credit Score Regularly
Habitually checking your credit score is a reliable way to pinpoint financial weaknesses so you can create a solid plan to combat them. Plus, it allows you check for statement errors. To correct any inaccuracies, send a dispute letter to either the credit reporting company or the information provider.
Note that checking your credit reports will not harm your credit score. Doing this is a soft inquiry — the information is only for you — as long as you request this information from an authorized credit reporting agency. The Fair Credit Report Act requires reporting companies, including Equifax, Experian and TransUnion to provide free credit reports every 12 months.
2. Make Payments on Time
In order to reach your ideal credit score range, making payments on time is crucial. Missing payments — even if it’s just by a few days — can wreak havoc on your credit score. Setting up automatic payments removes the need to remember to pay your recurring bills.
3. Avoid Closing Old Accounts
The temptation is strong to close credit cards once they’re paid off, but leaving them open can build up your credit score. The age of your credit history amounts to 15 percent of your total FICO score.
4. Add Missing Accounts or Utilities to Credit Report
Most utility companies do not share information with consumer reporting agencies, but thanks to the Credit Access and Inclusion Act, you can include utilities, phone and rent payment history to improve your score. You can use your utility payment history to establish or boost your credit score if you haven’t established a credit history or have a low credit score.
5. Increase Your Credit Limit
Increasing your credit limit isn’t a viable solution for everyone, but if you already have good credit, doing this can encourage your score to rise above 700. Your credit limit is a contributing factor to the utilization ratio because it represents the amount of available credit. An increased limit can help lower the ratio, improving overall credit.
6. Make Small Purchases With Your Credit Cards
Managing credit cards responsibly can help rebuild credit scores. Budgeting money and only making purchases you can pay off immediately will create positive gains.
Related: How to Use Credit Cards Wisely
7. Pay Off Your Maxed-Out Credit Cards
Having a large amount of debt negatively impacts your credit score. Maxed-out credit cards look bad on credit reports due to the adverse proportion of the debt to credit limit.
Pay your cards with the highest interest rates first. The objective is to lower your utilization ratio, or total credit card balances divided by your credit limit. Paying down your debt lowers that ratio, and can be a solution to how to get your credit score above 700.
8. Don’t Open Too Many New Accounts at Once
Newly opened credit determines 10 percent of your FICO credit score. Opening multiple credit accounts too quickly adds greater risk, particularly for those with a short credit history. Also, rejected applications might show up on the report, which can lead to a credit score decline.
9. Be Aware of the Rate-Shopping Window
When you need to open a new line of credit — whether it be for a new car, student loan or mortgage — be aware of your rate-shopping time-window. FICO scores ignore loan inquiries for 30 days before your next scoring report. That means if you’re within this period, the inquiries will not affect your credit score — and people using the newest FICO scoring formula have a 45-day cushion.
What’s the Difference? Soft vs. Hard Credit Check
10. Remain Consistent
You’re on the right path to improving your credit score if you already have good credit. Building your credit takes perseverance, especially if you have past delinquencies, missed payments and bankruptcies, but will pay off in time. Continue to practice good financial habits — periodically checking your credit report, keeping debts to a minimum, making payments on time — and you’ll be able to maintain and even improve your 700 credit score.
Up Next: 8 Ways to Get an 800 Credit Score
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