740 Credit Score: Is it Good or Bad?
![740 Credit Score](/personal-finance/static/1906168600fb02895f9a9fcbb563c9a4/8ae18/740-credit-score.jpg)
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Your credit score helps lenders understand the risk theyโll take by lending you money.
Credit scores can fall anywhere from 350 to 850. If you have a 740 credit score, you may be wondering if this is good or bad.
Within this article, we will look deeper into a 740 credit score and talk about some of the different products youโll be able to receive, some that you might not be approved for, and what you can do to improve your credit score.
Credit scores that fall between 740 and 799 are considered very good. Roughly 25% of all Americans fall into this credit group.
A credit score of 740 is going to open the door to more products than if you had a 650 credit score. But it still wonโt provide you with the best rates on everything. Most experts will tell you that anything above a 720 score will get you the best rate for an auto loan, but youโll likely need at least 760 for the best rates on a mortgage.
The good news is that with a 740 credit score, most lenders see you as a low-risk borrower. Only 1% of individuals with a very good credit score become seriously delinquent on their payments in the future.
If you have a credit score of 740, credit card issuers consider you to have good-to-excellent credit. This will give you the lowest interest rates and the most attractive card features. Here are a few of the best credit cards available for anyone with a credit score of 740.
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While this luxury card does come with a steep annual_fees annual fee (Rates & Fees), youโll receive more than $1,500 in value, including a $200 hotel credit, $240 entertainment credit (Disney+, Hulu, The New York Times and more), $200 in Uber Cash, $155 Walmart+ credit, and more. Terms and Enrollment Required.
If youโre looking for a cash back card, it will be tough to beat the card_name. Youโll bonus_miles_full. Where this card stands out is its ability to earn cash back.
Youโll receive an introductory annual_fees annual fee (Rates & Fees).
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This card is recommended for everyday use, whether for doctor copays or big box store purchases. It can be a large earner for cardmembers who want to get the most out of their everyday spending.
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Not interested in paying an annual fee on your credit card? Thatโs no problem with the card_name. In addition to having annual_fees annual fee, and new cardholders can now benefit from a limited bonus_miles_full Plus, youโll earn a generous amount of cash back:
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Beyond some of the best credit cards available, a 740 credit score will also give you access to several other products, including auto loans, mortgages, personal loans, and more.
Auto loans are available to most people regardless of their credit score. However, your score will directly affect the interest rate you receive. The higher your score, the lower your interest rate. Most lenders will offer the best rates to anyone with a credit score of 720 or higher.
Mortgage loans arenโt quite as easy to get as auto loans, but youโll be sitting in good shape with a credit score of 740. Conventional loans are available to anyone with a credit score of at least 620.
Like most loan products, the better your credit score, the lower your interest rate. For example, as of August 14, 2023, the average APR on a 30-year mortgage for someone with a 740 credit score would be 7.038%. However, if you only had a credit score of 650, your APR would be 7.859%. For a $300,000 mortgage, that would be a difference of $60,000 in total interest paid over the life of the loan.
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Want to build your next home? You might consider a land loan if you found the land but are not quite ready to build. These loans will allow you to acquire the land for future builds. With a land loan, youโll need a credit score in the high 600s to low 700s. Youโll also need a down payment of at least 50% and a debt-to-income ratio of 43% or less.
Every landlord has their own guidelines regarding the minimum credit score needed. However, having a 740 credit score makes it unlikely that any landlord would decline your application.
All personal loan lenders like Lending Point, Upgrade, and Discoverยฎ Bank have credit score requirements, but none will decline someone with a 740 credit score. Plus, youโre also likely to receive the best rates they offer.
RELATED: Compare the Best Personal Loan Rates
As your credit score increases, it will affect certain aspects of the loans you apply for. Here are a few impacts you may experience.
With a 740 credit score, you will receive some of the highest rates available for auto and personal loans. However, the best rates on mortgage loans are typically reserved for anyone with a score of 760 or higher.
RELATED: Historical Mortgage Rates
Most employers will do a pull on your credit report during the application process. To many, your credit score is a good indicator of the type of employee youโll be. With a credit score of 740, youโre proving to a potential employer that you responsibly pay your bills on time and only spend what you can afford. This is a good sign that theyโll be hiring a good employee.
If you want to improve your credit score a little further to receive the best possible rates on a mortgage, make sure you follow these tips.
One of the best ways to improve your credit score is to sign up for credit monitoring. Companies like Experian will provide access to your monthly credit report so that you know whatโs affecting your score.
One of the most significant factors in your credit score is your credit utilization, or the amount of available credit you use. One of the best ways to ensure youโre not spending more than you should on your credit cards each month is to start budgeting. Budgeting apps like Rocket Money allow you to stay on top of your spending and understand where your money is going.
Missing a payment is one of the worst things you can do for your credit score. Missed payments will stay on your credit report for 7.5 years. By putting your payments on autopilot, youโll make sure you never miss another payment. Credit card companies typically allow you to set up automatic payments where you can pay the minimum balance, statement balance, or entire balance. Cash App will also allow you to pay most of your other bills each month automatically.
Paypal | Venmo | Cash App | |
---|---|---|---|
Fees | From free to 5%, depending on transfer type | From free to 3% | Free to 1.75% |
Max transaction limit | Up to $60,000 per transaction for verified accounts | Up to $5,000 per transfer to your bank, up to $10,000 per week into your Venmo account | Up to $1,000 per 30-day period for unverified accounts, may be higher for verified users |
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Credit report errors happen. By monitoring your credit regularly, you can identify any errors and have them corrected. Depending on the error, it could significantly affect your credit score.
LEAR MORE: How to Dispute a Credit Report
Did you know you could boost your credit score by paying your utility bills and rent on time? Experian Boost will reward you each month when you make one of these non-traditional payments on time.
Your credit score can significantly impact how much things will cost. However, with a 740 credit score, youโre going to have the luxury of some of the best rates available on things like auto loans, credit cards, and personal loans. By improving your credit score slightly, youโll also be able to receive the best rates on your next mortgage.
Youโll be able to receive any loan product with a 740 credit score. While youโll also receive the best rates possible with most products, youโll need to improve your credit score slightly to receive the best mortgage rates.
There is no exact timeframe needed to grow your credit score to 740. However, you should expect it to take at least six months if youโre starting below 650 or 700.
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