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Credit score are often considered to ascertain if a borrower qualifies for auto loans and mortgages at more attractive terms. Most lenders use your credit score history to determine how likely you will return the money you borrow from them. With this confidence, lenders can lend you money at favorable terms since they are convinced that you are a borrower who will pay what they owe.
Credit scores are determined using a credit-scoring model, which differs among various companies that generate it, like FICO or VantageScore. These models use data from various credit bureaus to create your credit score. Additionally, each module uses its own standards to qualify a credit score as “good .”This article will enlighten you on whether having a 710-credit score is good that can enable you to determine if you are creditworthy.
Factors Affecting Your 710 Credit Score
A good credit score acts as a barometer to gauge your credit and progress. A personal analysis of your credit score can help you know your financial stability and creditworthiness. Scroll through to explore factors that qualify your credit score to 710.
1. Payment History
If you want to get your credit score to 710, you have to ensure that you always pay your bills on time. Most lenders are keen to learn about your payment history to determine your credit ratings.
Some of the details they check include how many bills you paid and how many you did not pay, how late you are on your payment in terms of a week or months, do you have a history of bankruptcies, debt settlements and foreclosures, and if any of your accounts have gone into collections.
2. Total Amount Of Debts You Owe
Though having little or no credit can be viewed as an excellent thing for your credit score, most lenders think otherwise. They are not mainly focused on your credit balance; rather, they want to ascertain that you borrow money and responsibly pay it in the allotted time. Additionally, some lenders could be discouraged from lending you money if they realize that you owe no credit whatsoever; this is because they tend to assume that you are not a risk-taker or are inexperienced to qualify for credit.
Therefore, do not shy away from taking loans on your credit cards, mortgage, or automobile. The best way to achieve a 710 credit score is to have various loans and responsibly manage each one of them.
3. Credit History
Most lenders check your credit history to determine how long you have been using your credit and the age of each credit account at your disposal. Longer credit history will often improve your credit score; however, credit history will not help you much if it is bogged by recent utilization or late payments. Since credit history accounts for 15% of your score, it could improve or damage your 710 credit score.
4. New Credit Accounts
Most people open a new credit account because they have lost their jobs or need extra cash for their sustenance. A new credit account can negatively impact your 710-credit score since lenders tend to assume you are a credit risk.
When you have multiple new credit card accounts, you will most likely make multiple new purchases. This history could discourage lenders as they assume that you will not pay your debt monthly. You may qualify for credit at a higher interest rate, while some lenders may deny you the loan.
5. Type Of Credit
Most lenders have various credit packages, including credit cards, home mortgages, car payments, and installment loans. The lenders will analyze your credit accounts to help them determine if your credit score can get to 710. The more credit accounts you have, the better for you, especially if you have responsibly handled them. However, take caution not to have various credit accounts that you cannot pay since it will lower your credit score.
How to Improve your 710 Credit Score?
According to the FICO score, a 710-credit score is considered good since it falls right in the range of 670-739. Several lenders have no issues with 710 credit scores. This score will allow you to access various loans and credit card products.
However, the 710 credit score still has room for improvement since it lies on the lower end of the good range. Improving your credit score from 710 will enhance your chances of loan approval at favorable lending terms.
Therefore, regularly keep track of your FICO score to acquire information on how to improve your score based on specific information in your credit file. The following outline will assist you in improving your 710 credit score.
1. Keep Your Credit Balance Low
A credit card allows you to withdraw funds from an account or make buy-now-pay-later purchases. However, when your credit balance is higher, it lowers your credit score. Most lenders determine your credit by analyzing how well you have reduced your credit balance by using your card responsibly and paying your minimum monthly installments on time.
Some people possess multiple credit cards as a strategy to outspread their debt on their cards as much as possible. However, this strategy makes you pay higher interest rates on your loans than you would pay if you consolidated each of your debts into one card, giving you a lower interest rate.
Most lenders are willing to work with borrowers who have used less than fifty percent of their credit. Additionally, you can minimize overusing your credit card and make prompt payments anytime you make large purchases.
2. Stay Clear of Bankruptcy
When most people hear the word “Bankruptcy” mentioned, they often quiver in fear. Nobody wants to endure the shame and humiliation in their finances and their mental well-being. If you want to improve your 710 credit score, you should protect your credit report by staying clear of bankruptcy.
Additionally, when you experience bankruptcy, it reflects on your credit report for over ten years. Therefore, if your credit score has dropped due to missed or late payment, adding bankruptcy to the record will immensely drop your credit rating.
Most lenders are unwilling to work with someone whose credit report indicates bankruptcy since it would be a huge risk.
Even though bankruptcy impacts your credit score in a big way, all hope is not lost since you can work at rebuilding your credit. The following are some of the steps you can take to help you in your recovery journey: –
- Negotiate your debts with your lenders
- Sell your property
- Borrow money to pay your debts from friends or family
- Renegotiate your mortgage
- Adjust your lifestyle and live frugally
3. Negotiate With Your Creditors
Creditors have human feelings, and they are never working against borrowers. That being the case when unexpected circumstances happen that make it impossible for you to service your loan on time, ensure that you inform them.
When you communicate with your creditors, it demonstrates responsibility and commitment on your part and benefits both of you from the business agreement. Most creditors have enough experience that enables them to differentiate between short-term financial problems that are beyond your control and those caused by financial neglect on your part.
Your effective communication will save you from being handed over to a collection agency and dropping your credit score below 710. Moreover, when you understand that they are interested in maintaining a good credit score, it will prompt you to always negotiate with them when challenges crop up.
What does a 710 credit score mean?
710 credit score is considered a good credit score by most lenders and credit reporting agencies. It suggests that you have a good credit history and are likely to make your loan or credit card payments on time.
Is 710 a Good Credit Score to Get a Car Loan?
Yes, a 710 credit score is generally considered a good credit score to get a car loan. With a score of 710, you may be able to qualify for a car loan with competitive interest rates and terms. However, the specific interest rate and terms you receive will depend on a variety of factors, such as the lender, the loan amount, and your income and debt-to-income ratio. If you have a 710 credit score, it is recommended to shop around and compare offers from multiple lenders to find the best deal for your individual financial situation.
Is a 710 credit score good to buy a house?
A 710 credit score is generally considered a good credit score, but whether it is good enough to buy a house depends on other factors as well. While a 710 credit score may qualify you for a mortgage, the interest rate and terms you receive may not be the most favorable. To get the best mortgage rates and terms, it is recommended to have a credit score of 740 or higher. However, there are many other factors that lenders consider when deciding whether to approve you for a mortgage, including your income, employment history, debt-to-income ratio, and down payment amount. Therefore, while a 710 credit score may be a good starting point, it is important to consider all aspects of your financial situation before applying for a mortgage.