A 734 credit score ranks as “good” on the 300 to 850 credit-scoring scale. Even so, a score of 734 is different than all of the other scores in its tier because it’s right on the cusp of becoming a “great” credit score. The “great” credit tier is reserved for scores of 750 to 809, which offer additional financial advantages than those present at lower levels.
Continue reading to find out what distinguishes good credit scores from great ones, as well as your options with a 734 credit score.
Good vs. Great Credit Scores
The biggest difference between good and great credit scores relates to financing offers.
People with good or great credit can qualify for and secure the loans they desire, such as mortgages or auto loans. But those who have great credit will pay less in interest and fees and often will be able to borrow more than those whose credit ratings are “good.”
To give you an idea of how much you could save with a higher credit score, consider that an interest rate that’s just a percentage of a point lower can save you thousands of dollars in interest on a mortgage loan.
Options With a 734 Credit Score
When you have a 734 credit score, most options are available, except for the lowest mortgage rates or insurance premiums. As far as credit cards, you may qualify for cards that offer 0% interest and impressive sign-up bonuses.
Additionally, you’ll probably find it easy to rent an apartment. Plus, lenders might be willing to offer you their best rate on personal loans, and 0% auto financing could also be an option.
Hallmarks of a 734 Credit Score
Positive credit behaviors, such as paying bills on time and keeping credit utilization low are the hallmarks of a 734 credit score. Late payments and other negative data are either in the distant past or nonexistent.
1. Using Payment Reminders
A late or missed payment could cause your credit score to plunge 50 to 100 points.
Payment reminders by email or text to keep track of when payments are due or have payments automatically drafted from your bank account each month.
2. Reviewing Credit Reports and Disputing Inaccurate Information
If you review your credit reports and find that you do have inaccurate, negative data, dispute the errors with the credit bureau that reported the information.
3. Low Credit Utilization
How much credit you have in use, aka your credit utilization, is a key component in your credit score calculation, weighing in 35 percent. To find out how much of your credit you’re utilizing, divide how much you owe by your credit limit.
Credit utilization counts on individual accounts and across all accounts as a whole. A good goal to shoot for is to reduce your utilization to between 1% and 10%.
4. Age of Accounts
The age of your credit counts for 10 percent of your overall credit score. The longer you’ve responsibly managed an account, the less of a credit risk you’ll present to lenders.
Closing accounts might increase your credit utilization ratio. For example, imagine you’re carrying a total balance of $6,090 across all of your credit accounts with $21,000 in total credit, which puts your credit utilization rate at 29%.
You decide to close a card you haven’t used in a while, which has a $5,000 limit and a $0 balance. By doing so, you will remove $5,000 from your available credit and cause your credit utilization rate to increase to more than 38%.
5. Credit Mix
Look over your credit report to see what types of credit and loans you have. A good credit mix consists of credit cards, car loans, mortgage loans and personal loans. If you’re missing one or more of these types of credit or loans, you might want to consider applying if it makes sense financially.
6. Hard inquiries
A single hard inquiry won’t shave more than a few points off your score. However, if you have frequent hard inquiries within a short amount of time, the points off your score can add up. Restrict hard inquiries to no more than three every two years.
Maintaining Your Score
Paying on time and keeping credit balances low is key in achieving that goal.
Another helpful strategy is to check your credit scores and reports regularly. Signing up for a product that will provide them to you is an easy way to make sure you’ll stay on top of your credit’s health.