For a score with a range of 300 to 850, a credit score of 670 to 739 is considered good. Credit scores of 740 and above are very good while 800 and higher are excellent.
For credit scores that range from 300 to 850, a credit score in the mid to high 600s or above is generally considered good. A score in the high 700s or 800s is considered excellent. About a third of consumers have FICO® ScoresÎ that fall between 600 and 750âand an additional 48% have a higher score. In 2023, the average FICO® Score in the U.S. was 715.
Lenders use their own criteria for deciding whom to lend to and at what rates. But a higher credit score can generally help you qualify for a credit card or loan with a lower interest rate and better terms. The two main types of credit scores, the FICO® Score and VantageScore® credit scores, vary slightly in their ranges but have similar scoring factors.
A credit score is a three-digit number that represents your creditworthiness and ability to repay debts. Lenders use credit scores to evaluate loan and credit card applicants. The most common credit score model used in the United States is the FICO score which ranges from 300 to 850. So what does a 704 credit score mean in terms of ratings and creditworthiness?
Overview of Credit Score Ranges
FICO divides credit scores into the following categories
- 800-850: Exceptional
- 740-799: Very Good
- 670-739: Good
- 580-669: Fair
- 300-579: Poor
A 704 credit score falls into the “Good” range. Good credit scores are considered acceptable to many lenders for approval on loans and credit cards, though not necessarily at the best terms.
What a 704 Credit Score Means
A 704 credit score indicates you have a solid credit history that shows responsible use of credit. However, there may be a few negatives pulling the score down, such as:
- Occasional missed or late payments
- High balances on revolving credit accounts
- Limited history of managing different types of credit
- Recent applications for new credit
While a 704 is a decent score, it’s on the lower end of the good range. Individuals with scores in this area may not qualify for the lowest rates and fees offered by lenders. Bringing your score up into the “very good” or “exceptional” ranges can open the door to better loan terms and rewards credit cards.
Credit Score Factors
The FICO scoring formula takes into account five main categories when calculating your credit score:
- Payment history (35%) – History of on-time payments and any negative marks like bankruptcies, collections, foreclosures, etc. This is the most important factor.
- Amounts owed (30%) – Amount of debt carried on credit cards and loans compared to limits. Also known as credit utilization ratio.
- Length of credit history (15%) – How long you’ve been using credit. Generally, a longer history is better.
- New credit (10%) – Number of new accounts opened and inquiries on your report. Too many new accounts can lower scores.
- Credit mix (10%) – Variety of credit types, such as credit cards, installment loans, mortgages, etc.
Looking at the factors above, a 704 score likely indicates a decent payment history with some missed payments, high balances owed, and average age/variety of credit accounts.
How a 704 Compares to the Average
- The average FICO score in the U.S. is 714, which falls in the good credit range.
- About 21% of consumers have credit scores in the good range.
- A 704 puts you slightly below average compared to other consumers.
- Over 60% of Americans have credit scores below 740.
So while a 704 isn’t a bad score by any means, it indicates there’s room for improvement to reach above-average credit health.
Is a 704 Credit Score Good or Bad?
Whether a 704 credit score is good or bad depends on your perspective and needs:
The Good
- A 704 is a prime or low-tier good credit score. It’s well above subprime.
- You should qualify for most credit cards and loans, albeit not the very best terms.
- Shows lenders you are a relatively low credit risk compared to those with fair/poor scores.
- Decent interest rates are available even on large loans like mortgages and auto loans.
The Bad
- Higher interest rates than if your score was in the very good/exceptional range.
- May not qualify for top tier credit cards with best rewards and benefits.
- Indicates there are some potential issues pulling your score down.
- Not a lot of cushion before dropping to 670, the start of the fair range.
Overall, while a 704 credit score is far from perfect, it shows lenders you are a reasonably responsible borrower able to manage debt. You have access to mainstream credit at decent rates.
How to Improve a 704 Credit Score
Here are some tips for improving your credit score from the good 704 range to very good or exceptional:
- Review your credit reports and dispute any errors. Mistakes can negatively impact your score.
- Pay all bills on time. Delinquencies severely hurt your score.
- Keep credit card balances low. Try to maintain a utilization rate under 30%.
- Apply for new credit sparingly. Too many new accounts can lower scores temporarily.
- Build your credit mix with an installment loan if you don’t have one.
- Let your credit history age by not closing old accounts if in good standing.
- Enroll in credit monitoring to catch any suspicious activity early.
- Consider being added as an authorized user on someone else’s older account to build history.
- Sign up for automatic bill pay so you never miss a payment due date.
With a little time and smart credit management, you can quickly boost your 704 credit score over 700. Reach the mid-700s and you gain access to great rates and rewards earning opportunities.
The Takeaway
A 704 credit score is at the low end of the good credit range. It indicates responsible borrowing for the most part but with some potential negatives dragging it down from excellent. Lenders see applicants with 704 scores as acceptable risks. While not the best, a 704 provides access to mainstream credit at decent interest rates. With focused effort, you can improve your 704 score to take advantage of even better loan terms and credit card rewards programs.
Why Having a Good Credit Score Is Important
Having good credit can make achieving your goals easier. It could be the difference between qualifying or being denied for an important loan, such as a home mortgage or car loan. It can also directly impact how much youll have to pay in interest or fees if youre approved.
For example, the difference between taking out a 30-year, fixed-rate $350,000 mortgage with a 620 FICO® Score and a 700 FICO® Score could be $138.58 a month. Thats extra money you could be putting toward your savings or other financial goals. Over the lifetime of the loan, having the better score would save you $49,889 in interest payments.
Additionally, credit scores can impact non-lending decisions, such as whether a landlord will agree to rent you an apartment.
Your credit reports can also impact you in other ways. Some employers may review your credit reports (but not your credit scores) before making a hiring or promotion decision. In most states, insurance companies may use credit-based insurance scores to help determine your premiums for auto, home and life insurance.
| FICO® Score | Interest Rate, 30-Year Fixed-Rate Mortgage | Monthly Payment | Total Interest Cost |
|---|---|---|---|
| 620 | 7.71% | $2,806.11 | $549,199 |
| 700 | 7.13% | $2,667.53 | $499,310 |
| 840 | 6.69% | $2,564.49 | $462,214 |
Source: Curinos LLC, December 6, 2024; assumes a $350,000 mortgage and 30-day rate-lock period
Learn more: Facts About Credit You May Not Know
VantageScore’s Different Credit Scores
VantageScore creates a generic tri-bureau scoring model, meaning the score is designed for any type of lender. The same model can evaluate your credit reports from the three major consumer credit bureaus (Experian, TransUnion and Equifax).
VantageScore launched its first modelâthe VantageScore 1.0, which is no longer offeredâin 2006. In 2017, it released VantageScore 4.0, which was the first generic credit score to use trended data, such as how your balances or credit utilization rate change over time.
VantageScore announced its VantageScore 4plus⢠model in May 2024. Unlike previous versions, this model allows creditors to ask consumers if they would like to link a bank account and share their banking data. If the person links an account, VantageScore 4plus; can consider the banking data and recalculate their score.
| VS 3.0 | VS 4.0 | VS 4plus |
|---|---|---|
| Only considers data from a credit report | X | X |
| Can consider additional data with your permission | X | |
| Considers trended data | X | X |
Credit Score Ranges Explained
FAQ
How bad is a credit score of 704?
A 704 credit score is considered a good credit score by many lenders. Credit scores help lenders assess a borrower’s potential risk and are based on credit reports, which detail your credit history. A good credit score signals a higher likelihood of repaying borrowed money.
Can I buy a house with a 704 credit score?
What can I do with a 704 credit score?
A FICO® Score of 704 provides access to a broad array of loans and credit card products, but increasing your score can increase your odds of approval for an even greater number, at more affordable lending terms.
Is a 900 credit score possible?