Have a credit score that got dinged by student loan debt? If you’re ready to rebuild your credit and improve that number, a credit score of 700 is a good benchmark to reach.
That’s because credit scores exist on a scale, with a score of 300 being the lowest and worst and 850 being the absolute highest and best. You’re considered to have “very bad” credit if your score is between 300 and 599 and poor to fair credit if you’re somewhere between 600 and 699.
A 700 credit score gets you in the “good” range, and this is where you want to be if you want to enjoy the benefits of maintaining a healthy score.
Why seek a 700 credit score, anyway?
Before we explore how you can raise your score, it’s worth understanding why you should make the effort. A credit score isn’t just an arbitrary number — it’s determined by specific factors, and there are real consequences to having a number on the lower end of the scale.
Creditors, financial institutions (like banks), landlords, and even employers will take a peek at your score as a measure of how creditworthy you are. That means they judge your ability to be financially responsible and the likelihood that you’ll pay your bills and repay your debts based on this number.
If these entities see a low score when you apply for a loan, get a line of credit, or submit an application for a lease, there could be a financial penalty.
Landlords may request a bigger security deposit or ask for first and last months’ rents up front. And lenders will put a higher interest rate on your loan, making it more expensive for you to repay the money you initially borrowed.
They can also deny your request, be it for a loan or a rental unit, entirely based on your credit score.
Why? Because a lower credit score indicates that you present a higher risk. Whether or not that’s fair (or even true), evaluating your score is how most financial institutions determine how much of a risk they take in working with you.
The higher your score, the more creditworthy, less risky, and more financially responsible you appear to lenders, landlords, and companies who can lend you lines of credit. This is why seeking a credit score of 700 or higher is worth the effort.
What it means to have a good credit score
Because a credit score of 700 or higher is considered “good,” you’ll start enjoying the benefits of a healthy score when you hit this number. These could include:
- Better interest rates on loans
- Better APRs and higher credit limits on credit cards
- Access to more options for financing (if you’re making a big purchase or starting a business, for example)
- Better chance of securing rentals, especially in hot real estate markets, with no additional fees or requirements
How to get my credit score above 700
You get it: A 700 credit score is a good thing to have. If your score is less than ideal, don’t panic. You do have control over your score.
You can take action and, over time, work to improve and raise your score. Here’s how.
Make payments in full and on time
A large portion of your credit score is determined by your payment history. Making all your payments — from bills to student loans to home and auto payments — on time and in full will raise your score over time.
Your credit score will suffer if you consistently make late payments or if you fail to make those payments at all. Set reminders in your calendar or register for automatic payments if you struggle to remember due dates. Work with your student loan servicer to change your due dates if a different payment deadline would help you consistently pay on time and in full.
Don’t use up all your credit all the time
Another big factor in determining your credit score is your credit utilization ratio.
For example, let’s say you have a credit card with a limit of $1,000. If you charge $800 to your card each month, your credit utilization ratio is 80%.
But you should aim to keep that ratio at 30% or lower if you want to improve and increase your score. Even if you pay off that $800 on time and in full each month, you credit score could suffer because your utilization ratio is so high.
Sometimes you need to charge a higher balance on your card, and that’s okay if you pay it off when the bill is due (and pay it all off). But to build up to a 700 credit score, don’t make it a habit. Keep your utilization ratio as low as you can.
Avoid frequently opening and closing accounts
Opening lots of new accounts at one time can cause your score to plummet. Only open new lines of credit if you actually need to use them, and consider exploring other options first (like using debit cards instead of credit cards or paying for a purchase in full instead of financing).
The same should be said for closing accounts, too. Eliminating accounts hurts your score because it affects the average age of your entire credit history. The older your credit history, the better for your score.
Do try to keep the oldest accounts on your credit history open as long as you can, but don’t hang on to lines of credit that cost you money. Credit cards with high annual fees that don’t provide you a major benefit aren’t something you need to maintain.
If you do need to close accounts, try and spread out those closures. Avoid closing multiple accounts within a short timeframe.
It’s okay to have a mix of types of credit and loans, too. In fact, showing you can manage a variety of different lines of credit can even help your score — so your student loans won’t necessarily drag your credit score down.
Check for errors on your credit report
One of the easiest things you can do to get a 700 credit score is to make sure there are no errors or mistakes dragging down your current score. You can get a copy of your credit report from AnnualCreditReport.com for free once per year.
Once you request and receive your report, look it over and make sure all the information is correct. If you find a mistake, learn how to dispute the error on your report here.
Stick with it and stay consistent!
Your credit score won’t skyrocket into the 700s or 800s overnight. It takes some time, so be patient, especially if your score was very bad or poor.
A lot of what determines your score is seeing consistent action over time. If you don’t see movement right away, don’t be discouraged. Keep making payments in full and on time, manage your credit wisely, and don’t use up every bit of credit available to you.
If you stick with it, you should see your credit score hit 700.
Interested in refinancing student loans?Here are the top 6 lenders of 2019!
|Lender||Variable APR||Eligible Degrees|
|Check out the testimonials and our in-depth reviews!
1 Important Disclosures for Earnest.
To qualify, you must be a U.S. citizen or possess a 10-year (non-conditional) Permanent Resident Card, reside in a state Earnest lends in, and satisfy our minimum eligibility criteria. You may find more information on loan eligibility here: https://www.earnest.com/eligibility. Not all applicants will be approved for a loan, and not all applicants will qualify for the lowest rate. Approval and interest rate depend on the review of a complete application.
Earnest fixed rate loan rates range from 3.89% APR (with Auto Pay) to 7.89% APR (with Auto Pay). Variable rate loan rates range from 2.47% APR (with Auto Pay) to 6.97% APR (with Auto Pay). For variable rate loans, although the interest rate will vary after you are approved, the interest rate will never exceed 8.95% for loan terms 10 years or less. For loan terms of 10 years to 15 years, the interest rate will never exceed 9.95%. For loan terms over 15 years, the interest rate will never exceed 11.95% (the maximum rates for these loans). Earnest variable interest rate loans are based on a publicly available index, the one month London Interbank Offered Rate (LIBOR). Your rate will be calculated each month by adding a margin between 1.82% and 5.50% to the one month LIBOR. The rate will not increase more than once per month. Earnest rate ranges are current as of Month/Day/Year, and are subject to change based on market conditions and borrower eligibility.
Auto Pay discount: If you make monthly principal and interest payments by an automatic, monthly deduction from a savings or checking account, your rate will be reduced by one quarter of one percent (0.25%) for so long as you continue to make automatic, electronic monthly payments. This benefit is suspended during periods of deferment and forbearance.
The information provided on this page is updated as of 08/21/18. Earnest reserves the right to change, pause, or terminate product offerings at any time without notice. Earnest loans are originated by Earnest Operations LLC. California Finance Lender License 6054788. NMLS # 1204917. Earnest Operations LLC is located at 302 2nd Street, Suite 401N, San Francisco, CA 94107. Terms and Conditions apply. Visit https://www.earnest.com/terms-of-service, email us at email@example.com, or call 888-601-2801 for more information on ourstudent loan refinance product.
© 2018 Earnest LLC. All rights reserved. Earnest LLC and its subsidiaries, including Earnest Operations LLC, are not sponsored by or agencies of the United States of America.
2 Important Disclosures for Laurel Road.
Laurel Road Disclosures
APR stands for “Annual Percentage Rate.” Rates listed include a 0.25% EFT discount, for automatic payments made from a checking or savings account. Interest rates as of 11/8/2018. Rates subject to change.
Variable rate options consist of a range from 3.27% per year to 6.09% per year for a 5-year term, 4.64% per year to 6.14% per year for a 7-year term, 4.69% per year to 6.19% per year for a 10-year term, 4.94% per year to 6.44% per year for a 15-year term, or 5.19% per year to 6.69% per year for a 20-year term, with no origination fees. APR is subject to increase after consummation. The variable interest rate will change on the first day of every month (“Change Date”) if the Current Index changes. The variable interest rates are based on a Current Index, which is the 1-month London Interbank Offered Rate (LIBOR) (currency in US dollars), as published on The Wall Street Journal’s website. The variable interest rates and Annual Percentage Rate (APR) will increase or decrease when the 1-month LIBOR index changes. The variable interest rates are calculated by adding a margin ranging from 0.98% to 3.80% for the 5-year term loan, 2.35% to 3.85% for the 7-year term loan, 2.40% to 3.90% for the 10-year term loan, 2.65% to 4.15% for the 15-year term loan, and 2.90% to 4.40% for the 20-year term loan, respectively, to the 1-month LIBOR index published on the 25th day of each month immediately preceding each “Change Date,” as defined above, rounded to two decimal places, with no origination fees. If the 25th day of the month is not a business day or is a US federal holiday, the reference date will be the most recent date preceding the 25th day of the month that is a business day. The monthly payment for a sample $10,000 loan at a range of 3.27% per year to 6.09% per year for a 5-year term would be from $180.89 to $193.75. The monthly payment for a sample $10,000 loan at a range of 4.64% per year to 6.14% per year for a 7-year term would be from $139.65 to $146.76. The monthly payment for a sample $10,000 loan at a range of 4.69% per year to 6.19% per year for a 10-year term would be from $104.56 to $111.98. The monthly payment for a sample $10,000 loan at a range of 4.94% per year to 6.44% per year for a 15-year term would be from $78.77 to $86.78. The monthly payment for a sample $10,000 loan at a range of 5.19% per year to 6.69% per year for a 20-year term would be from $67.05 to $75.68.
However, if the borrower chooses to make monthly payments automatically by electronic funds transfer (EFT) from a bank account, the variable rate will decrease by 0.25%, and will increase back up to the regular variable interest rate described in the preceding paragraph if the borrower stops making (or we stop accepting) monthly payments automatically by EFT from the designated borrower’s bank account.
3 Important Disclosures for SoFi.
4 Important Disclosures for LendKey.
Refinancing via LendKey.com is only available for applicants with qualified private education loans from an eligible institution. Loans that were used for exam preparation classes, including, but not limited to, loans for LSAT, MCAT, GMAT, and GRE preparation, are not eligible for refinancing with a lender via LendKey.com. If you currently have any of these exam preparation loans, you should not include them in an application to refinance your student loans on this website. Applicants must be either U.S. citizens or Permanent Residents in an eligible state to qualify for a loan. Certain membership requirements (including the opening of a share account and any applicable association fees in connection with membership) may apply in the event that an applicant wishes to accept a loan offer from a credit union lender. Lenders participating on LendKey.com reserve the right to modify or discontinue the products, terms, and benefits offered on this website at any time without notice. LendKey Technologies, Inc. is not affiliated with, nor does it endorse, any educational institution.
5 Important Disclosures for CommonBond.
Offered terms are subject to change. Loans are offered by CommonBond Lending, LLC (NMLS # 1175900). If you are approved for a loan, the interest rate offered will depend on your credit profile, your application, the loan term selected and will be within the ranges of rates shown.
All Annual Percentage Rates (APRs) displayed assume borrowers enroll in auto pay and account for the 0.25% reduction in interest rate. All variable rates are based on a 1-month LIBOR assumption of 2.28% effective October 10, 2018.
6 Important Disclosures for Citizens Bank.
Citizens Bank Disclosures
|2.57% – 6.97%1||Undergrad & Graduate|
|2.47% – 6.99%3||Undergrad & Graduate|
|2.68% – 8.77%4||Undergrad & Graduate|
|3.24% – 6.66%2||Undergrad & Graduate|
|2.61% – 7.35%5||Undergrad & Graduate|
|3.01% – 9.75%6||Undergrad & Graduate|