During the first half of the 2000’s a credit score of 750 was considered good enough to qualify for any type of loan and get the very lowest rates available. Unfortunately, that’s no always the case in today’s economy a full decade later…
Recently I received a message from someone who was denied for store credit card. Despite having a FICO score of 750 (according to the denial letter she received) the application was denied because:
“amount paid down on real estate accounts is too low”
So even though she had a 750, that in and of itself wasn’t sufficient since her home loan was relatively new.
In short, you will still probably qualify for almost any credit card offer on the market, but you might not get the lowest rates.
Your score translated
Here’s what various score ranges mean (based on definitions from Experian regarding FICO scores):
750 credit score – what it means
|800+||Excellent||Consumers in this range can expect easy approval for credit products and the best terms.|
|740-799||Very good||Consumers in this range can expect to qualify for a wide range of products and are eligible to receive favorable terms.|
|670-739||Good||Consumers in this range may vary in their qualification for credit products. Those at the lower end may get denied for premium products, or may have less-favorable terms/lower credit limits. Still, getting approved for a card or loan is absolutely feasible.|
|580-669||Fair||Consumers in this range can expect higher interest rates and may not qualify for some credit products. Results will vary, based on whether the score is due to thin credit history or a troubled one (bankruptcies and late payments).|
|579 and lower||Poor||Consumers in this range will have trouble qualifying for most credit products.|
For the vast majority of the last decade, if you had a 750 score you could get approved for any credit card (assuming you had reasonable income, too). Now more than ever, I regularly hear from card issuers heavily weighing other factors in their decision:
- amounts owed on installment accounts (such as a mortgage or auto loan)
- negative payment history/delinquent accounts
- debt to credit ratio (credit utilization)
With the second factor, it might actually be quite difficult to achieve a 750 credit score regardless, if you have even a relative recent delinquent account on your credit report. But now creditors are looking farther back, even taking into account negative actions from several years ago.
So what can a 750 get you?
1. It most likely will get you a mortgage – When it comes to jumbo mortgage there is a completely different set of criteria, but assuming you have a stable job history and are applying for a reasonably-priced house that fits your household income parameters, a 750 should qualify you for a good rate (but probably not the absolute best rate, which typically requires 760+).
By the way it’s interesting to note that several years ago nearly half of mortgages were for individuals with credit scores above 750. Contrast that to Q1 of 2008, when it was only 29%. Little wonder why there was a mortgage meltdown soon thereafter.
2. Likely approval for most cards, but maybe not the best rates – Credit cards for a 750 credit score will be easy to come by. In fact, you most likely will be able to get whatever you want, including the premium travel credit cards like The American Express Premier Rewards Gold Card. However, if you have any blemishes in your credit file (like the opening example) then a FICO score of 750 is not a guarantee of approval. Though your odds are still quite good overall. Based on forum feedback, I would estimate you have an 85-90% probability of getting approved, on average.
3. It will save you on car insurance – You say “um, excuse me?? Well unless you live in California, Hawaii, or Massachusetts, your auto insurance company has the legal right consider your credit score when calculating your premium. That may seem a little Orwellian but it’s just the way it is, unfortunately.
According to one study by CarInsurance.com, if you maintain a score of 750 or above from age 25 to 65, that will save you $23,000. So if that study is to be believed and you live in one of the 47 states which can use your score, having a good number should be quite important to you.
How to get a credit score of 750?
Okay so even though 750 might not be cream of the crop, it’s still a world of difference compared to say, a 680, 700, or 720. So how do you reach the 750 mark anyway?
Aside from fairly obvious things )like paying your bill on time) you already know, here are a few tips…
1. Keep your credit utilization very low
According to myFICO.com (which is owned by Fair Isaac and Company, aka FICO) those with a score range of 750 and above have an average credit utilization of only 7% on their revolving accounts (i.e. credit cards).
Conclusion? Try to evenly spread your purchases across multiple credit cards rather than concentrating on a single card if it might push your utilization above a max recommended threshold of 30% (or certainly below a third of your overall credit limit). So, if you’re only using one or two accounts with relatively low limits then try to make more than one payment per month to keep your utilization low.
2. Have several credit accounts
Remember, having no credit is in many ways almost worse bad credit. The same can be said for having little credit history… it won’t necessarily be considered “bad” but it certainly won’t be considered great, either.
In order to get into the high 700’s you will need to have multiple lines of credit, a diverse mix. That might mean a few revolving accounts (credit cards) and a couple installment loans (loans where you have a recurring payment of the same amount each month, like a car loan). Utilities don’t show on your credit report unless you are delinquent on them, so if you banking on those to give you diversity then think again.
3. Know the different credit scoring models
Monitoring your score is a useless endeavor if you don’t know what type of score you are looking at. So far everything I’ve talked about has been in regards to a 750 FICO credit score.
However, it’s highly likely that you don’t even know your real FICO. There are only a couple websites which offer it and you can read more here. You can also get your real FICO score with American Express and Discover credit cards – either on their website or, in the case of Discover, printed on your billing statement each month.
Or maybe you just have low standards…
Some people will argue with what I’ve said and claim a 750 is good enough. For them, maybe it is. But my thoughts are the same as what was said in this post by CreditCardForum member Celestine:
“I honestly think of a 750 credit score as just the average and not good enough. But that is just me since I set higher standards than others do.”
Do you have enough open credit lines for 2017?
Most people have the impression that having one or two credit cards is all they need and any more than that could impair their credit scores, but even though it seems counter-intuitive that’s not the case at all. You certainly don’t want to have too much outstanding credit (open credit lines) relative to your income. However, you would be surprised at how many people have credit scores of 800 with wallets, purses and sock drawers full of general use and store credit cards. The name of the game is how responsibly you manage your credit accounts along with having a diverse mix in the types of credit over time. And, if you’re into maximizing rewards there is really no way to do that with a single credit card, no matter how good you think its rewards are. Depending on your spending patterns it can take two, three or more cards to max out earnings across all the major purchase categories like groceries, travel, restaurants and gasoline.
If you want or need additional credit cards, this one is recommended as it automatically gives you free FICO every month on your billing statement:Here are some other goods ones to consider too:
Last edited on February 2, 2017