“Small daily improvements over time lead to stunning results.” – Robin Sharma
One of the most confusing and misunderstood components of modern life: the three little digits that make up your credit score. If you’ve recently checked your score to see the number “750,” you might be wondering: Is that good? Great? What does it even matter?
Unlike income or savings, your FICO score reflects your long-term patterns: whether you pay on time, how much debt you carry, and how you manage credit overall. And yes, it can be improved, it’s not something that changes overnight – and that’s exactly what makes it worth paying attention to.
What is a FICO score?
Your FICO score is a three-digit number between 300 and 850 that represents your creditworthiness – i.e., how likely you are to pay back the money you borrow. The higher your score, the lower the risk for lenders. And that means better terms, lower interest, and sometimes even fewer fees.
It’s determined using data from your credit reports and calculated through proprietary formulas developed by the Fair Isaac Corporation (and so the acronym was born).
Lenders use this number to decide whether to lend to you. It can also influence the interest rate they offer you, and what credit limit you’re eligible for.
What’s a good FICO score?
FICO scores fall on a scale from 300–850. Here’s how they generally break down:
800–850: Exceptional
740–799: Very good
670–739: Good
580–669: Fair
300–579: Poor
So at 750, you’re sitting right in the middle of the “very good” tier. That’s something to be proud of – and it means you likely qualify for better-than-average interest rates, solid credit limits, and favorable loan terms.
With a 750 credit score…
- You’ll qualify for pretty competitive mortgage rates.
- You’ll likely get strong offers for auto loans (without the need for a co-signer or large down payment).
- You’re eligible for premium credit cards with better rewards, lower APRs, and higher credit limits.
- You’ll get preferential landlord treatment – landlords usually favor applicants with scores above 700.
- You could get lower home and auto insurance rates in many states.
Is “very good” good enough?
For the most part, yes. But taking your 750 credit score to the next level could open up benefits for you like…
- Fast-tracked loan approval (with high borrowing limits and no collateral required).
- The best available interest rates. Even a quarter-point drop in interest on a 30-year mortgage, for example, can mean huge savings.
- All the credit card perks (hello, luxurious airport lounge).
- Lowest available insurance premiums.
- A better chance of winning competitive rental applications.
The reality is, upping your credit score is a long game. There are really only two things you can do to influence it:
1) Request a copy of your credit report from Experian, Equifax, and TransUnion and verify that all the information contained in them is correct. Often, an error can negatively impact your credit, and mistakes do happen. According to the Federal Trade Commission, 1 in 5 Americans has at least one error on their credit report, and about 5 percent of people have a “serious” error on at least one credit report.
So pull copies of your reports (available for free from AnnualCreditReport.com) and scour them for errors. You can then open a dispute online with each bureau to start the process of cleaning up bad information.
2) Pay your bills on time. And, don’t overextend yourself on your accounts. Aim to carry a balance of no more than 30 percent of the total available credit on any credit cards you might have (which demonstrates good use of credit). Get that number below 9 percent, and you’ll be in the “excellent” category.
Other than that? There’s actually very little to do except be responsible. Your FICO score often moves slowly, over time, but can rarely be manipulated in the short term.
If you’re sitting at a credit score of around 750, great. That’s a sign you’ve been pretty financially on top of things. But there is more money to be saved by taking your score to the next level. To get there, you’ll likely need to trim the fat in your personal finances. We’re happy to help you figure out a (sustainable) plan to do that:
212-247-9090
Helping you level up,
David I. Block, EA, CTC, CFP®
For TEAM TaxMaster Financial Service Corporation
PS – We’re always here for you every tax season. BUT…
You can also sit down with us anytime to make plans for your specific tax situation… so you’re positioned well when filing season comes around.
Time to do some tax planning.
212-247-9090
