Once your credit score hits 700, it can be tempting to take your foot off the gas and simply enjoy the benefits of a good score. You’ve worked hard to prove that you’re a reliable borrower, and your chances of getting a loan or credit card are rock solid.
However, because the maximum credit score is 850, the best credit card deals and interest rates will elude you. Here’s a closer look at why you should keep working to improve your credit score, even after it gets into the “good credit” 700 range.
Perks of credit excellence
When you applied for your first credit card, your goal was probably to qualify for a card. At that time, getting low interest rates or a card with great rewards wasn’t as important.
But as your life changes, and you think about applying for larger loans, such as a mortgage, your priorities shift. Having an excellent credit score of 720 or higher will help you land the best rates possible. Even what seems to be a small difference in rates could save you thousands of dollars over the lifetime of a 20- or 30-year mortgage.
Qualifying for the best credit card deals will also help you save money in other ways, too. Once your credit score tops 700, you’ll attract the attention of credit card issuers that offer cards with a wide range of perks. Travel rewards, for example, can save you hundreds of dollars on airfare each year.
Beyond your credit score
Although it’s easier to focus solely on your credit score, keep a close eye on your credit report as well. Banks and other lenders look at credit reports for a more-detailed picture of your borrowing history.
Your credit report contains a number of important items, such as how many open lines of credit you have, a list of every loan you’ve ever taken out and whether you make payments on time. You can check your credit report for free once a year, and doing so helps ensure that you have a solid overview of your entire credit history.
Don’t get complacent once your credit score hits 700 — this number simply isn’t good enough for the best credit card deals and interest rates. Until your score reaches the 850 mark, there will always be room for improvement. Continue to practice the same responsible habits — making payments on time and staying within your credit limit — that enabled you to build your credit history in the first place.
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