Knowing your credit score is crucial when applying for a loan or credit card. But what does that number actually mean? Credit scores range from 300 to 850, and within that range, certain subsets determine whether your credit is considered good or bad.
Understanding Credit Scoring Models
There are two main credit scoring models: FICO and VantageScore. A 760 credit score is classified as “very good” by FICO and “good” by VantageScore. Here’s an overview of the ranges for each model:
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FICO credit score:
- Exceptional: 800+
- Very Good: 740-799
- Good: 670-739
- Fair: 580-669
- Poor: <580
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VantageScore credit score:
- Excellent: 750-850
- Good: 700-749
- Fair: 650-699
- Poor: 550-649
- Very Poor: <550
What You Can Be Approved for With a 760 Credit Score
If you have a 760 credit score, congratulations! You have access to a wide range of financial products such as mortgages, car loans, credit cards, student loans, and personal loans. Let’s take a closer look at each category:
Mortgages
When applying for a conventional mortgage, lenders typically prefer borrowers with a credit score of at least 620. With a 760 credit score, you not only meet this requirement but also have the potential to secure a lower interest rate when purchasing a home. Additionally, you can also be considered for other types of mortgages, such as jumbo loans, Federal Housing Administration (FHA) loans, United States Department of Agriculture (USDA) loans, or Veterans Affairs (VA) loans, given that you meet the necessary eligibility criteria.
Car Loans
With a 760 credit score, getting approved for a car loan should be a breeze. You are likely to be offered a low interest rate, which can save you money in the long run. Take advantage of your high credit score by shopping around for the best deal. Special offers, such as 0% interest loans, may be available to you.
Credit Cards
When it comes to credit cards, a 760 credit score opens up a world of possibilities. You’ll have a wide selection of cards to choose from, all tailored to customers with “good” or “excellent” credit scores. Here are a few options:
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Card 1: Earn 2% cash back on eligible purchases up to $50,000 per calendar year, then 1%. Additionally, enjoy 1% cash back on all other eligible purchases after spending $50,000 per calendar year.
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Card 2: Earn 6% cash back at U.S. supermarkets on up to $6,000 per year in purchases (then 1%). Get 6% cash back on select U.S. streaming subscriptions, 3% cash back on transit, 3% cash back at U.S. gas stations, and 1% cash back on other purchases. Terms apply.
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Card 3: Earn 5x miles per dollar on hotels and rental cars booked through Capital One Travel, and 1.25x miles per dollar on all other purchases.
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Card 4: Earn 5% cash back on your top eligible spending category up to $500 per billing cycle, and 1% cash back everywhere else. Enjoy a 0% intro APR on balance transfers and purchases for 15 months.
Student Loans
If you need a private student loan, a 760 credit score will make it easy to get approval. While student loans often have high interest rates, having a 760 credit score can help secure a lower rate compared to someone with a lower credit score. However, it’s worth noting that federal student loans should be your first choice due to their special borrower protections.
Personal Loans
Finding a personal loan won’t be a problem with a 760 credit score. Though improving your score can potentially secure better rates and terms, most lenders will gladly approve your application.
What You Can’t Be Approved for With a 760 Credit Score
Because a 760 credit score is considered “good,” there isn’t much you can’t get approved for. However, keep in mind that you may still face rejection when applying for a credit card or loan with a 760 credit score due to:
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Insufficient income: Lenders may deny your application if they believe your income doesn’t support your ability to repay the loan or credit card. In this case, you can reapply for a lower credit limit or loan amount.
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High debt-to-income ratio: Some lenders may view your debt-to-income ratio (DTI) as too high, even with a good credit score. DTI is calculated by dividing your monthly debt payments by your monthly pretax income. A DTI of over 30% can raise concerns for lenders, regardless of your credit score.
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Multiple recent credit inquiries: Applying for multiple credit cards within a short period may indicate desperation for credit, making lenders hesitant to approve your application. Apply for credit only when necessary.
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Young age: If you’re under 21, you’ll need a co-signer for a credit card. If the co-signer has a low credit score, the application may be denied.
How to Improve Your 760 Credit Score
Even with a 760 credit score, there are several ways to enhance your creditworthiness and increase your chances of securing even better terms and rates:
Monitor Your Credit
Regardless of your credit score, it’s essential to keep a close eye on it. This enables you to quickly identify and resolve any issues and maintain your desired score. Consider using credit monitoring services like MyFICO or Experian.
Make a Budget
Creating and sticking to a budget can help ensure timely payments, which, in turn, improves your credit score. Use spreadsheets or finance-tracking apps to manage your finances effectively. This way, you can pay off debts, maintain your good credit score, and avoid unnecessary expenses.
Pay Your Bills on Time
Consistently paying your bills on time is the easiest and most effective way to improve your credit score. Even a single missed payment can have a negative impact. Set up automatic billing to avoid late fees and maintain a positive credit history.
Diversify Your Credit File
Ideally, your credit file should include a mix of installment loans and revolving credit. Installment loans, such as home loans, auto loans, and personal loans, have fixed terms and amounts. Revolving credit, including credit cards and home equity lines of credit (HELOCs), allows you to borrow up to a certain limit that resets as you pay it off. Having a healthy mix of both can boost your credit score.
Reduce Your Debt
Having multiple high-balance credit cards may make you appear riskier to lenders, reducing your chances of approval. Work on paying down your balances to improve your creditworthiness and increase your appeal to lenders.
Avoid Frequent Credit Applications
Applying for multiple credit cards within a short period can negatively impact your credit. Lenders may view this as a red flag, so only apply for credit when necessary.
For more tips on improving your credit score, visit Personal Finances Blog.
Time Stamp: A 760 Credit Score Helps You Get the Best Loans and Credit Cards
Having a 760 credit score opens up a world of opportunities for low-interest loans and credit cards with attractive rewards. Although there’s still room for improvement, a 760 score puts you in a similar position as someone with a score in the 800 range. Monitor your credit score carefully to ensure it remains in the “good” range and potentially even rises to an “excellent” level.
Frequently Asked Questions (FAQs)
Q: Is a 680 credit score good or bad?
A: A 680 credit score is considered “good” by both FICO and VantageScore. While you’ll find approval for loans and credit cards, improving your score slightly can lead to better terms and rates.
Q: Is a 600 credit score good or bad?
A: A 600 credit score falls into the “fair” range for FICO and the “poor” range for VantageScore. Getting approved for loans and credit cards may be more challenging, so it’s advisable to work on improving your score to the “good” range or higher.
Q: Is a 700 credit score good or bad?
A: A 700 credit score is considered “good” by both FICO and VantageScore. While it shouldn’t be difficult to find loans and credit cards, it’s still beneficial to improve your score for lower interest rates.