Is 720 a Good Credit Score? | Credit.com (2024)

While FICO and VantageScore take some of the same factors into account, VantageScore determines your credit score based on six different factors. Let’s look at how VantageScore weighs each factor:

• Payment history (41%): Your past ability to pay bills on time.
• Depth of credit (20%): The ages and types of credit accounts you have.
• Credit utilization (20%): How much of your credit limit you’re using.
• Recent credit (11%): The number of hard inquiries on your credit report.
• Balances (6%): The total balances on your credit accounts.
• Available credit (2%): The amount of credit you have available to you.

What Kind of Loan Can I Get With a 720 Credit Score?

As mentioned above, a good credit score can help you qualify for better rates and terms for loans. However, it’s important to keep in mind that your credit score isn’t the only factor that lenders look at when reviewing your loan application. Your income, employment, credit history, and debt-to-income ratio are also taken into consideration during the approval process.

With that in mind, here’s a look into the loans you can generally expect to qualify for with a 720 credit score. Assuming you also qualify for income thresholds as well.

Mortgages

Generally, mortgage lenders require a minimum credit score of 620, so you should have no problem qualifying for a mortgage with a 720 credit score. You’ll also likely qualify for low interest rates, although you might not get the best rate available. Borrowers who qualify for the lowest interest rates typically have a 760 credit score or higher.

Additionally, how much of a down payment you put down may influence your interest rates. A larger down payment provides less risk to the lender because you have additional stake in the house.

Auto Loans

A 720 credit score will allow you to qualify for an auto loan. When looking at the average car loan interest rates, borrowers with credit scores between 661 and 780 qualify for an average used car APR of 7.83% and an average new car APR of 5.82%. However, if you bring your score to 781 or above, you can expect a 1.84% lower interest rate for used cars and a 1.07% lower interest rate for new cars, on average.

Personal Loans

With a 720 credit score, you’ll have many options for personal loans, so you should shop around for the best rates. Personal loan interest rates can range from 6% to 36%, although a good credit score should allow you to qualify for rates on the lower end of that spectrum. According to recent personal loan statistics, the average interest rate is 11.2%.

Student Loans

While federal student loans don’t have credit score requirements, private student loan lenders typically require a good credit score. With a 720 score, you’ll likely get approved by most lenders and may even qualify for the best interest rates.

Credit Cards

Most credit card issuers will approve borrowers with a 720 credit score and potentially offer the lowest interest rates. You can likely even get approved for a 0% APR card. Keep in mind that certain prestigious credit cards that provide luxurious perks require excellent credit to qualify plus additional requirements. Therefore, you may need to improve your credit score before applying for an exclusive credit card.

How to Further Improve Your 720 Credit Score

If you have a good credit score but want to reach the very good or excellent range, here are some tips for how to make your good credit score even better:

• Pay your bills on time: Since 720 is a high credit score, a single late payment can cause a significant drop in points. Make sure to continue paying your bills on time to further improve your credit.
• Make payments more frequently: Making multiple payments on your credit card bill each month can help keep your credit utilization low.
• Request a credit limit increase: Another way to lower your credit utilization is to increase your credit limit.
• Leave credit accounts open: Avoid closing old credit accounts to maintain the length of your credit history.
• Space out new credit applications: Wait six months between credit card applications to limit the number of hard inquiries on your credit report.
• Get credit for rent and utility payments: If you regularly pay your bills on time, a rent and utility reporting service can report your payments to the credit bureaus, which may help improve your credit.
• Dispute any errors: Check your credit report at least once a year and challenge any inaccurate information you find.

While a 720 credit score is considered good, there’s still room for you to stay on top of your credit—that’s where ExtraCredit® comes in. ExtraCredit is a credit management product that helps you check your FICO® scores, view your credit reports from all three credit bureaus, report rent and utilities, and more. Start your free trial* today.

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