Your credit score plays a crucial role in determining the risk lenders take when lending you money. A credit score can range from 350 to 850, and if you have a 740 credit score, you might wonder whether it’s considered good or bad.
In this article, we will delve deeper into the significance of a 740 credit score. We’ll discuss the different products you’ll be eligible for, some that you might not qualify for, and provide tips on improving your credit score.
What Does Having a 740 Credit Score Mean?
A credit score between 740 and 799 is considered very good, encompassing roughly 25% of all Americans. With a 740 credit score, you’ll have access to more financial products than if you had a 650 credit score. However, it might not guarantee the best rates across the board. Most experts suggest that a credit score above 720 will secure the best auto loan rates, while a score of around 760 is necessary for the best mortgage rates.
The good news is that with a 740 credit score, most lenders view you as a low-risk borrower. Only 1% of individuals with a very good credit score become seriously delinquent on their payments in the future.
Which Types of Credit Cards Can You Get with a 740 Credit Score?
If you have a credit score of 740, credit card issuers consider you to have good-to-excellent credit. This means you’ll qualify for credit cards with the lowest interest rates and the most attractive card features. Here are a few of the best credit cards available for individuals with a credit score of 740.
The Platinum Card® from American Express
The Platinum Card is one of the premier travel credit cards available. When you sign up, you can earn bonus miles. Plus, you’ll receive 5x points on flights booked directly with the airline and 5x points on airfare and hotels booked through American Express Travel.
While this luxury card does come with an annual fee, it provides over $1,500 in value, including various credits and benefits.
Blue Cash Preferred® Card from American Express
If you’re looking for a cash back card, the Blue Cash Preferred Card is tough to beat. You’ll earn bonus miles and enjoy high cash back rates on various categories, including U.S. supermarkets, select U.S. streaming services, U.S. gas stations, and transit.
Chase Freedom Unlimited®
The Chase Freedom Unlimited card is a great option for those who prefer no annual fee. It offers cash back on travel, dining, drugstore purchases, and all other purchases. As a new cardholder, you’ll also benefit from a limited-time bonus miles offer and an introductory APR for purchases and balance transfers.
What Will You Get Approved for with a 740 Score?
Beyond credit cards, a 740 credit score opens doors to several other products, including auto loans, mortgages, personal loans, and more.
Auto Loans
Auto loans are available to most people regardless of their credit score. However, a higher credit score generally translates to a lower interest rate. Most lenders offer the best rates to individuals with a credit score of 720 or higher.
Mortgage Loans
With a credit score of 740, you’re in good shape for mortgage loans. Conventional loans are available to anyone with a credit score of at least 620. However, a higher credit score will result in a lower interest rate, potentially saving you thousands of dollars over the life of the loan.
Land Loan
If you’re considering building your next home, a land loan allows you to acquire the land before construction. To be eligible for a land loan, you’ll need a credit score in the high 600s to low 700s, along with a down payment of at least 50% and a low debt-to-income ratio.
Rentals
Having a 740 credit score makes it unlikely that any landlord would decline your rental application. You’re seen as a low-risk tenant.
Personal Loans
All personal loan lenders have credit score requirements, but a 740 credit score will qualify you for the best rates. Lenders like LendingPoint, Upgrade, and Discover are more likely to approve your application with favorable terms.
What Will a 740 Score Impact?
As your credit score increases, it will have certain impacts on the loans you apply for. Here are a few effects you may experience.
Interest Rates
With a 740 credit score, you’ll receive some of the highest rates available for auto and personal loans. However, mortgage loans typically offer the best rates to individuals with a score of 760 or higher.
Jobs
Many employers check your credit report during the application process, as your credit score is seen as an indicator of your financial responsibility. With a credit score of 740, you demonstrate that you pay your bills on time and manage your finances well, increasing your chances of getting hired.
How to Improve Your 740 Credit Score
If you want to raise your credit score further to secure the best possible rates on a mortgage, follow these tips:
Credit Monitoring
Sign up for credit monitoring services like Experian to access your monthly credit report and understand what affects your score.
Budgeting Apps
Start budgeting to control your credit utilization, which impacts your credit score. Budgeting apps like Rocket Money help you track your spending and manage your money effectively.
Automatic Payments
Set up automatic payments to ensure you never miss a payment. Paying bills on time is crucial for maintaining a good credit score. Use credit card autopay features or services like Cash App to streamline your monthly payments.
Dispute Credit Report Errors
Regularly monitor your credit report and dispute any errors you find. Correcting errors on your report can significantly impact your credit score.
Get Credit for Rent and Utility Payments
Take advantage of services like Experian Boost, which rewards you for on-time rent and utility payments and boosts your credit score.
A 740 Credit Score Will Open Doors for You
Having a 740 credit score grants you access to the best interest rates on various financial products, including auto loans, credit cards, and personal loans. By implementing simple strategies to improve your credit score, you can further enhance your financial prospects.
Remember, maintaining a good credit score is essential for securing favorable rates and saving money in the long run. Keep monitoring and working on your score to reap the benefits it offers.
Read More: Personal Finances Blog