How Good Is a Credit Score of 721?

FT Contributor
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According to credit reporting bureau Experian, a credit score of 721 officially ranks as “Good.” While this means you’ve overcome characteristics of “Poor” and “Fair” credit scores, a “Good” credit score of 721 can still benefit from further improvements, which will earn you lower interest rates and more reasonable fees.

Credit scores can be confusing. Five main financial factors work together to determine a borrower’s credit score:

  • Payment history;
  • Total debt;
  • Credit age;
  • Credit type;
  • New credit.

Any time a borrower is considered for a new loan, a new credit card, or a new line of credit, lenders evaluate credit score to determine that borrower’s ability to repay a loan.

While low credit scores can make it difficult for consumers to secure loans, a Good credit score of 721 can help streamline loan applications and unlock other financial opportunities.

Improving a credit score is made easier once borrowers understand it. That’s why many consumers will take advantage of free credit reporting services like safe-for-use AnnualCreditReport.com, for regular updates on how their credit is performing, and information on the most recent credit score fluctuations.

Why Your Credit Score Is 721

Ultimately, it is not possible to identify all of the reasons for a borrower’s current credit ranking. However, common influences on a credit score of 721 include limited overall debt, a consistent payment history, and disciplined spending habits.

Limited Overall Debt

Accounting for 30% of a borrower’s credit score, total debt can play a large role in credit score increases or decreases. Consumers with a credit score of 721 have likely taken steps to limit overall debt, making substantial payments regularly to consolidate debt and keep loan utilization low.

At times, it’s normal to maintain high levels of debt. For example, when consumers close on a home or some other large purchase requiring a loan, high debt levels naturally follow.

In subsequent months, it’s important to keep payments consistent and full to quickly lower overall debt and earn back any points lost after the loan closed.

Consistent Payment History

As the single-most-important ranking factor in determining a credit score, payment history can have a large effect on credit ranking changes.

Fortunately, many individuals with a credit history of 721 have established consistent payment histories, where on-time payments have contributed to systematic credit score increases.

Maintaining a consistent payment history is as simple as it is important. While regular payments made toward credit balances can improve your credit score, late, missed, or impartial payments can compromise your credit score and make improvements more difficult.

Even with a Good credit score of 721, you should make consistent credit payments a priority to protect your score from potential decreases and make regular credit score increases possible.

Disciplined Spending Habits

No matter your monthly income, disciplined spending habits can allow you to maintain low total debt and a quality payment history. Many individuals with credit scores of 721 likely put into practice disciplined spending habits, like limiting their number of impulse purchases each month and keeping loan utilization low.

Disciplined spending also means looking ahead to the next payment period before it arrives. Consumers with a 721score often protect their credit score from excessive debts and growing interest rates, simply by paying down old debts as fast — or faster — than new debts are accrued.

While this means fewer leisure-based purchases each month, it also leads to financial freedom and the chance to further improve a 721 credit score toward a “Very Good” rating.

What Can You Do With a 721 Credit Score?

A credit score of 721 can benefit borrowers when it’s time to secure a new personal loan, home loan, apartment rental, credit card, or reasonably-priced car insurance policy.

While the lowest interest rates and fees are often reserved for Very Good and “Exceptional” credit scores, a Good credit score of 721 is sufficient to help consumers obtain financing when they need it.

Reference the below information for more details on the opportunities afforded to you with a credit score of 721.

  • Rewards-based credit cards allow qualified consumers to earn hotel points, airline miles, and cash back from nearly any transaction.
    • A credit score of 721 is enough to unlock many — though not all — of the best rewards-based credit cards available today. Still, your “Good” credit score can unlock cards with 0% introductory financing, retailer-specific perks, and other benefits.
  • Mortgage loans are available to credit holders with scores of 721. While a Very Good or an Exceptional credit score is typically necessary to secure industry-leading interest rates and the lowest possible fees, you’ll still be able to take steps toward your next property through a streamlined mortgage application.
  • Personal loans allow borrowers to fund private projects, whether that’s a home renovation, an unforeseen medical bill, or anything in between.
    • Borrowers with credit scores of 721 will be able to obtain virtually any personal loan from a reputed lender but will not qualify for the best possible interest rates.
  • Apartment rentals are simple to land with a credit score of 721. Since many apartment managers typically deal with lower average credit scores, your score of 721 can help put you into an apartment without much difficulty.

Even though the best interest rates and the lowest fees are often reserved for higher credit scores, your Good credit score of 721 can still help you acquire a new line of credit at the right time.

How to Improve a 721 Credit Score

Improving a credit score of 721 to a Very Good — and ultimately an Exceptional — ranking means doing the simple things right. Maintain complete, on-time payments to retain a clean payment history, while keeping total debt down through disciplined spending habits.

Limiting total hard inquiries can also mean future credit score improvements. Any time a lender officially considers a borrower for a potential loan, they perform a hard inquiry — a standard check into that borrower’s financial history.

While hard inquiries only remain on a financial record for one year, excessive hard inquiries can serve as a major red flag to potential lenders.

If you have fewer hard inquiries, that means you are preserving the average age of your credit, another factor that can have a strong, positive influence on your credit score of 721.


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