The requirements of lenders change respectively to the dynamics of the economic situation. Today it is difficult to understand how good is a 700, 720, 730 credit score, as these numbers have changed their value over the last few years. Here you will find what they currently mean.
A few years ago a credit score of 700 was considered as excellent for getting a low interest rate mortgage loan. Almost all lenders qualified such customers as suitable for giving them loans for purchasing real estate, as such clients incur low risks for the creditors. Today the situation has changed. Now credit score or 700 is considered to be a limit between good and average credit score, it is a doubtful number. From the one hand, it is fully possible to qualify for any mortgage loan offer, 700 is enough for this. But from the other hand, 700 is not enough to obtain mortgages with the lowest interest rates. To justify the risk, lenders will offer higher rates. This is not very profitable, it can cost you extral $5,000 – $10,000 of overpayment. Sometimes applicants with 700 credit score need to prove their worthiness by providing additional information about their income, etc. Some lenders may study payment history to see whether you make your payments regularly and in full size.
Credit scores higher than 700 are considered to be very advantageous in terms of getting beneficial mortgages. A credit score of 730 is your ticket to the lowest interest rates. It can be called as a target for those who are planning to apply for a mortgage loan in the nearest future. If your income is enough, together with credit score of 730 and more you can make a loan commitment at the best possible conditions.
720 is close to 730, and gives mostly the same opportunities, however some lenders may consider it as good, not excellent credit score. Having 720 score it is better to study all available offers, negotiate with lenders to see who is likely to offer you the best rates. This is a score that gives you ability to choose from a wide range of offers.
To understand how good is a 700, 720, 730 credit score now you should realize that lenders are not so flexible as they were a few years ago, due to the lack of stability in mortgage sphere. Credit companies, as the most of other business enterprises, only started their recovery from the crisis, and no one wants to risk more than possible. That is why, even the interest rate of 720 may cause doubts as for your candidacy for a loan. However, lenders provide you ability to prove your creditworthiness.
However, the most of experts advise to try to improve your credit score up to 730+. Gaining a 10 – 20 points is fully possible, so it is better to spend some time on this to save a few extra thousand dollars in future.