Is 722 a Good Credit Score?
If you have a credit score of 722, you may worry it’s not high enough to qualify for different kinds of loans and credit cards, or even give you the ability to rent an apartment. But rest assured, a 722 credit score falls into the “good” category, signaling to lenders (or landlords) you are someone who is likely to make timely payments and fulfill your financial obligations.
Having a 722 credit score should give you access to a range of borrowing options with competitive interest rates and terms. However, a score of 722 is only slightly above the national average, and falls short of landing in the “very good” or “exceptional” credit tiers.
What Does a 722 Credit Score Mean?
The most widely used credit scores are FICO scores, which range between 300 and 850. The higher your credit score, generally the more creditworthy you’re deemed to be by lenders and financial institutions. According to the credit bureau Experian, the average FICO credit score in the U.S. is 715. This means that a 722 credit score puts you above the average.
According to FICO, the ranges and ratings for credit scores are:
300 to 579: Poor
580 to 669: Fair
670 to 739: Good
740 to 799: Very Good
800 and above: Exceptional
In the FICO model, a credit score of 722 falls into the “good” credit category.
Credit scores can also be calculated using different scoring models, such VantageScore (FICO’s main competitor) or a lender’s own proprietary algorithm. In the VantageScore model, a 722 credit score also falls into the “good” range, which is 661 and 780. This is only one tier away from their top rating, which is “excellent” (750 to 850).
Even though 722 is generally considered a good credit score, you’re still not in the “very good,” “excellent,” or “exceptional” credit score range. So, depending on the lender, you may not get the best interest rates or qualify for the most generous perks and benefits. However, you only have to improve your FICO score by 18 points to make it into the very good range, which is likely attainable.
What Can You Get With a 722 Credit Score?
Having a 722 credit score can put you in a good position when it comes to applying for credit cards, different types of loans, and apartment rentals. Here’s a closer look at what you can get if your credit score is 722.
Can I Get a Credit Card With a 722 Credit Score?
There’s no minimum credit score needed for a credit card, so even if you have poor or fair credit, you can typically still get one. However, having a lower credit score comes with some disadvantages, such as a lower credit limit and higher interest rate.
Falling into the good credit category gives you more choices when it comes to applying for credit cards, including more introductory offers, lower interest rates, and higher credit limits.
You may be able to snag a credit card without an annual fee. You’re also in the running for a rewards credit card, which may offer cash back or points you can use towards airline flights, hotels, or dining. In addition, you might be able to qualify for a 0% introductory annual percentage rate (APR), which can come in handy if you’re looking to make a large purchase or do a balance transfer from a card with a higher interest rate.
Can I Get an Auto Loan With a 722 Credit Score?
The answer is yes. According to a fourth-quarter 2023 report from Experian, more than 68% of cars financed were by people who had a credit score of 661 or higher. If you’ve got a score of 722, getting an auto loan shouldn’t be difficult.
Your car loan interest rate depends on your credit score, and the average interest rate for someone with a good credit score is 7% for a new car loan and 9.73% for a used-car loan. Improving your credit could snag you even lower rates: For borrowers with credit scores between 781 and 850, the average interest rate for a car loan is 5.64% for a new car and 7.66% for a used car.
Dealers will often feature special lease offers and cash rebates for new cars, and a credit score of 722 will also increase your eligibility to take advantage of these opportunities.
Can I Get a Mortgage with a 722 Credit Score?
People with a 722 credit score can absolutely get a mortgage. More than 40% of first mortgage loans go to those with a credit score under 740. Conventional mortgages (those not backed by the government) require a score of 620, while Federal Housing Administration (FHA) loans with low down payments require a score of 580. A 722 score puts you well over these thresholds.
That said, a 722 credit score likely won’t qualify you for a lender’s best mortgage rates. These are typically only offered to borrowers with scores in the very good or exceptional credit tiers. However, a 722 credit score should allow you to qualify for rates in line with national averages.
Keep in mind that mortgage lenders typically consider more than just your credit score when you apply for a home loan. They will likely also factor in your debt-to-income (DTI) ratio and the size of your down payment when determining your eligibility for a home loan, as well as the rates and terms they will offer.
Can I Get a Personal Loan With a 722 Credit Score?
If you’re thinking about using a personal loan to cover a large expense or consolidate high-interest credit card debt, you’ll be happy to know that a 722 credit score can get you a personal loan with competitive rates and terms. That said, not every lender will approve you. Some lenders only offer personal loans to applicants with scores well into the 700s.
Because personal loans are typically unsecured (meaning you don’t have to put up collateral like your car or savings), lenders want to be extra-sure that a borrower will be able to repay their debt. As a result, they will often look at multiple criteria — not just your credit score. Lenders may also factor in your income and employment history, cash flow, and how much debt you already have, when considering your eligibility for a personal loan.
Can I Rent an Apartment With a 722 Credit Score?
When considering applicants for an apartment rental, a landlord or property manager will typically run a credit check to make sure the prospective tenant is likely to pay the rent on time each month. If you have a 722 credit score, you have a good chance of getting approved.
While there’s no official credit score needed to rent an apartment, the average credit score for renters in the U.S. is 638, according to research by Rent Cafe. In cities and areas where the competition for rentals is stiff, however, some landlords may decide to rent to someone with a very good or exceptional score. Nevertheless, if you have a 722 credit score, along with a low DTI and a good past rental history, you should not have much difficulty renting an apartment.
The Takeaway
A 722 credit score puts you in a strong position to get approved for various types of loans and credit cards with lower interest rates and competitive terms. With this credit score, you’re also likely to show a prospective landlord you’re a good bet when it comes to renting an apartment.
Keep in mind, though, that a 722 is still only considered “good” in terms of creditworthiness. Since you’re not far from landing in the “very good” credit tier, it can be worth taking some steps to build your credit, such as always paying your bills on time, paying down credit card balances, and limiting hard credit inquiries. This can give you access to lending products with even better rates and terms in the future.
This article originally appeared on SoFi.com and was syndicated by MediaFeed.org.
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The #1 Thing That Could Hurt Your Credit Score
As of 2022, the average American has a credit score of 714. But how was that number arrived at, and, more importantly, how is your own credit score determined?
There are five primary credit score factors, each with its own level of significance. According to the Fair Isaac Corporation, which issues FICO® scores (one of the most commonly used personal credit scores), the breakdown for the FICO score is as follows:
- Payment history
- Debt amounts owed
- Length of credit history
- New credit/recent inquiries
- Credit mix
Here’s an explanation of each one, starting with those that have the largest impact.
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Your credit score is most affected by how consistently you pay your bills on time. However, not every bill you pay is tracked by the three major credit bureaus (Equifax®, Experian®, and TransUnion®). Instead, credit lines are what are primarily listed on your report and included in calculating your score. These typically include your credit cards, loans, and any lines of credit you might have.
Don’t be concerned that you'll see a negative entry just because you were a day late on your credit card payment. Creditors don’t report a late payment until it’s at least 30 days overdue (although you may still accrue late fees before then).
If you still don’t make a payment after that period, the creditor can report additional missed payments at the 60, 90, 120, and 150 day marks until you either make the payment or the account is considered a charge-off (meaning that the creditor considers the bill unlikely to be paid).
(Learn more atPersonal Loan Calculator)
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Another factor that can affect your credit score is your total amount of debt, including the amount you owe across all of your accounts and how many of your accounts have balances. You may appear to be financially overextended if you have multiple credit lines with outstanding charges.
Keep in mind that each account is considered individually. Carrying a large balance compared to your available credit line can lower your score. This applies to both credit cards and installment loans. The more you pay down your credit cards and loan balances, the better your score is likely to be.
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Another factor that can affect your credit score is the length of your credit history. The longer you’ve had an account open, the more of a track record you have to demonstrate your creditworthiness. The age of your oldest and newest accounts are evaluated, as is the overall average age of all your accounts.
However, closing a credit card account won’t hurt your score because of the length factor. That data stays on your credit report for 10 years after the account is closed and is still included as part of your account average until it drops off. Your score could drop, though, when you initially close a credit account because your overall available credit will be lower.
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Your credit score also takes into account how much new credit and new inquiries from creditors you are accumulating. Opening too many new credit accounts in a short period of time may suggest that you’re facing financial hardships. Whenever a creditor performs a hard pull on your credit report, you could see a small dip in your credit score. Each inquiry stays on your report for two years, but only affects your score for the first year.
Different types of inquiries vary in their impact on your score. Multiple credit card applications hurt your score more because lenders associate them with greater risk. But multiple inquiries in a short period of time for things like a mortgage or auto loan are typically viewed as rate shopping and won’t dramatically affect your score. You can try to maintain a good credit score by strategically applying for new credit and paying attention to the timing of your applications.
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Your credit mix consists of all the different types of debt you have, though they’re not all weighted equally when your credit score is calculated.
It’s typically best to have a mix of revolving credit and installment loans. Revolving credit is more flexible and includes things like credit cards, a home equity line of credit, and store credit cards. An installment account has a fixed monthly payment, such as a mortgage, auto loan, or student loan.
This category doesn’t weigh as heavily as your payment history and amounts owed, but having experience with a diverse range of credit types can help build your score.
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Some of these credit score factors weigh more heavily than others. Late payments can cause a major drop, especially if you end up defaulting on your loans or credit cards.
These entries stay on your credit report for seven years. Even though the effect on your score lessens over time, lenders can still see that negative history, making it important for you to stay on top of your monthly payments.
If you’re unsure of how to improve a bad credit score, consider credit score monitoring. Not only can you get an idea of where your current score stands, but you can also receive actionable tips about how to build your score based on your own history.
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The best thing you can do for your credit score is to pay your bills on time. This accounts for 35 percent of your credit score, making it the biggest contributing factor. Also try to keep your credit card and loan balances as low as possible, since maxing out your accounts also has a major impact.
Another tip is to diversify your credit mix. Installment loans like student loans and mortgages, for instance, are counted more favorably than credit card debt. While you shouldn’t take out a loan just for the sake of your credit score, consider the impact when weighing multiple financing options or investigating a personal loan.
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If you’re a business owner, the importance of your credit score doesn’t just affect your personal life, but your business one, as well. Your individual credit score is often used in conjunction with your business credit score when you’re applying for financing. It can be especially important when your business is new and doesn’t have a substantial credit history.
Startup business loans with bad credit and no collateral usually include things like credit cards, invoice factoring, and merchant cash advances. Oftentimes, you’ll encounter high fees and interest rates, but you may qualify for better terms if you have a good personal credit score.
An unsecured business line of credit for startups is another option to consider for financing a new venture. Each lender has its own eligibility requirements, which could include a minimum time in business and specific revenue qualifications. Since it’s hard for many new businesses to meet those requirements, having a good personal credit score lets you pursue other ways to launch your startup, like a personal loan or credit card.
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Understanding what influences your credit score is a good way to start taking control of your finances. Get empowered to make the right decisions about how to manage your money, like prioritizing credit payments and keeping your balances low.
This article originally appeared on SoFi.com and was syndicated by MediaFeed.org.
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