According to the respected credit reporting bureau Experian, a 725 score officially ranks as “Good.” While you’ve successfully surpassed “Very Poor” and “Fair” rankings, your credit will require additional effort before it rightfully ranks as “Very Good,” and eventually as “Exceptional/Excellent.” If you’re ever curious as to your current credit score, consider the use of a free, secure credit aggregation company.
Your credit score is used by potential lenders when determining whether to issue you a mortgage or apartment loan, personal loan, credit card, or even car insurance with a respectable monthly premium. Influenced by financial factors like debt history and credit age, your credit score will serve either as a roadblock or a catalyst in helping you spend your money as you want.
A credit score can mean the difference between modest and sky-high interest rates, between affordable loans from reputable lenders and debts to low-grade lenders with sneaky fees.
Further improving your credit score past a 725 means improving the benefits that score can earn you. By adopting and maintaining a few positive financial habits, you can systematically increase your credit score without increasing per-month payments.
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Why Your Credit Score Is 725
Even though it’s impossible to identify the exact reasons why your credit score is Good, common influences on a credit score of 725 include overall debt, total credit utilization, and overall credit age.
Overall Debt Levels
Your total amount of overall debt can play a role in your credit score, and in subsequent fluctuations. In the wake of a new loan or an additional line of credit, your overall debt will naturally be higher.
Fortunately, debt over time plays a more important role in determining your end credit score. Quickly paying down debts and prioritizing loan repayment over indulgent purchases can help return your credit score to pre-debt levels, especially if you found that your credit score experienced a short-term decrease in the wake of your new loan.
Total Debt Utilization
Expressed as a ratio of utilized credit versus your available credit ceiling, total debt utilization accounts for 10% of your overall credit score.
While that might not sound like a lot, think of it this way: vastly improving your total debt utilization can increase your credit score by as much as 10%. And with a credit score of 725 — only 15 points away from a Very Good score — this sounds like a deal worth taking.
While an increased debt limit can sound like a clear invitation to spend more, it’s actually an opportunity to further improve your credit utilization, capitalizing on all the signs of a Good credit score.
If you can manage to spend the same amount, or even less, as your overall credit limit increases, you’ll find your credit utilization ratio becoming lower and lower each month. And lower overall credit use from your pool of available credit can yield improved credit scores in a matter of weeks.
Matured Credit Age
Some influential credit score factors, like credit type and total debt utilization, are fully controllable. Credit age is not one of those factors. Accounting for 15% of your overall credit score, credit age is the simple reflection of how old your existing credit lines are.
Despite the fact that your credit matures daily, it may take months, or even years, before credit age passively improves your overall credit score.
Not the most influential asset in determining your underlying credit score, credit age is still important. Especially since your average credit age can be lessened any time you activate a new line of credit, seek to limit new loans and instead optimize the use of existing spend avenues.
Disciplined Loan Repayment
Disciplined loan repayment means dedicating as high a percentage as possible toward loan repayment, within the parameters of fiscal responsibility.
While you wouldn’t want to divert funds you use to pay bills instead toward debt repayment, consider this an invitation to assess, on a cost-per-cost basis, the nature of each major purchase you made over the past 30 days.
How many impulse purchases did you make? How much total spend was dedicated toward unnecessary transactions instead of loan repayment?
While we’re not advocating that you eliminate every “spur of the moment” purchase from your monthly statement, it’s always a good idea to adopt more of an active, attentive approach to your own finances for the benefit of your credit score.
Increased payments toward your balances improve payment history and help lower credit utilization.
What Can You Do With a 725 Credit Score?
A credit score of 725 is sufficiently high enough to help you achieve the financial goals you’ve set for yourself. From incentive-laden credit cards to property loans, your credit score can help you take the next right step in your financial journey, whatever that is.
Let’s dive into the details and determine what a 725 credit score can — and cannot — do for you.
- Personal loans are easily and relatively straightforward to secure, especially since many lenders deal with far lower credit scores on a regular basis.
- A credit score of 725 may even help you obtain low interest rates and origination fees.
- Rewards credit cards are also readily available to individuals with a credit score of 725.
- Whether you’re looking for a credit card that returns cash back on virtually every purchase, or you need a card that accumulates airline miles, restaurant perks or hotel points, the best rewards-based credit cards are well within your reach.
- Mortgage loans are a cinch to secure with a credit score of 725. That said, you’ll likely need a Very Good, or even an Exceptional/Excellent credit score, before you can secure the lowest mortgage interest rates available in your area.
- Car insurance premiums are certainly reasonable with a credit score of 790, but they’ll be considerably lower once you improve your credit score to the next tiers. Even so, you likely won’t have any problems when purchasing car insurance to secure your ride.
How to Improve a 725 Credit Score
Your credit score of 725 isn’t a finished product. It’s time to solidify productive financial habits into viable routines if you’re ready for a Very Good — or even an Exceptional/Excellent — credit score.
Pay down debts as fast or faster than you accumulate new debts. And improve credit utilization by spending even less of your available credit on a monthly basis.
Sustaining a record of 100% on-time payments can help expedite credit score increases, but a single missed or incomplete payment could complicate matters.
Remember that improving credit age takes time. Eventually, credit age can become one of the most positive influential factors toward improving your credit score past a 725, but patience is key.
With time and effort, your credit score can and will see improvements toward the perfect 850 you know you deserve. Keep disciplined spending habits, make complete payments, and avoid unnecessary lines of credit to manifest positive change into reality.
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