Your credit score is a number that represents your creditworthiness. According to FICO and VantageScore scoring systems, a 725 credit score is considered good, but it won’t get you the best loan terms. Your score is based on your payment history, the number of accounts you have, and the age of each. You can also take advantage of credit repair services to improve your score.
As a general rule of thumb, people who earn $50,000 per year or more are likely to have a credit score of 700 or higher. But if your income is significantly less than that, you can still join the 700-plus club, so long as you stay within your budget. If you want to buy a home, for example, you might want to have a credit score of at least 720.
If you’re wondering whether 725 is a good credit score, you should know that you can still qualify for many types of credit cards, from unsecured to secured. You’ll be able to choose which card suits your needs best. Traditional factors, such as interest rate and annual fee, won’t matter as much. If you’ve made a few good payments and have a low balance, you can opt for a credit card with perks and rewards. In some cases, the benefits and rewards can be worth more than the annual fee or interest expense.
The good news is that even if you have a 725 FICO(r) score, you can still qualify for better loan terms and interest rates. You can improve your credit score by repairing credit history, and applying for credit card or mortgage loans. You can even dispute negative items on your credit report to remove them from your credit report.
One of the best ways to improve your credit score is by making all your payments on time. This shows lenders that you are a responsible debtor and can be trusted to pay back the loans you borrow. Try to keep your balances at 30% of your credit limit. Even one late payment can negatively impact your credit score.
Your credit score depends on several factors, including your age. The oldest accounts on your credit report are more likely to affect your credit score than those that are younger. Although the age of your credit accounts isn’t directly related to your credit score, it does affect how much you can borrow. Even a slight difference can cost you hundreds of dollars in interest. Having a good credit score will help you save money and secure better interest rates.
The length of your credit history also matters. The longer you have been credit-active, the better. This is an important factor as it accounts for 15% of your total FICO grade. Using credit wisely and paying off balances in full is always recommended. You should try to keep your balances under 30% of your total credit limit.