Is 740 a Good Credit Score for a Car Loan or Mortgage?
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Andrew Lisa
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Emily Gadd
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A 740 credit score is not just good but very good. It’s substantially higher than the average credit score in the U.S., which is around 715.
Lenders generally view borrowers with 740 scores as low risk and, therefore, offer them better loan terms and lower interest rates than those with lower scores.Â
What Credit Score Ranges Mean
The standard FICO credit score spectrum ranges from 300 to 850, with higher being better. A 740 score is just high enough to put you in the very good range, meaning you’re in a strong position when applying for credit.
- 300-579 = Poor
- 580-669 = Fair
- 670-739 = Good
- 740-799 = Very Good
- 800-850 = Excellent
What Can You Do with a 740 Credit Score?
A 740 credit score can help you:
- Get approved for credit cards with valuable rewards programs
- Qualify for low interest rates on auto loans, personal loans and home loans
- Rent an apartment more easily with lower security deposits
- Obtain higher credit limits
How Does 740 Compare to Other Scores?
| Credit Score | What It Means | What You Get |
|---|---|---|
| 740 | Very Good | Low rates, easy approvals |
| 670 | Good | Decent rates, some approvals |
| 580 | Fair | Higher rates, fewer approvals |
| 500 | Poor | Very high rates, hard to get approved |
With a 740 score, you’re above average and approaching the excellent range at the top of the pyramid, which starts at 800.
How to Improve a 740 Credit Score
If you’ve achieved a 740 credit score, congratulations. You’re a very good candidate for credit and loans, and most lenders will vie for your business by offering you low rates and good terms — but there is still higher to climb. You can get the very best deals by aiming for 750 or even 800 or higher.
Here are some tips to raise your score from very good to excellent.
- Pay every bill on time, every time: Payment history is the most significant factor, accounting for 35% of your score.
- Keep credit card balances low: The next most important category is amounts owed, which makes up 30% of your score.
- Avoid too many hard inquiries at once: So-called soft inquiries don’t affect your credit, but multiple hard pulls can make you appear desperate to lenders.
- Keep older accounts open: Lenders like to see a long, established credit history.
- Check your credit report for errors: Even minor mistakes or discrepancies regarding your personal or financial information and harm your score.
FAQ
- Is 740 a good credit score for buying a house?
- Yes. A 740 score makes you an attractive borrower to mortgage lenders.
- Can I get a car loan with a 740 credit score?
- Yes. Lenders will be eager to issue loans to most borrowers with scores of 740 or higher.
- What interest rate can I get with a 740 credit score?
- Many variables impact your interest rate, including income and the length of the loan, but a very good credit score like 740 can get most borrowers who shop around a comparatively low rate.
- How much can I improve my 740 score?
- Those with 740 scores can still improve by more than 100 points to 850.
