Brad HansonA 706 credit score is considered a good credit score by many lenders.
Credit scores help lenders assess borrower risk and are based on credit reports, which outline your credit history. A good credit score signals a higher likelihood of repaying borrowed money.
Good credit can be financially transformative. It can boost your chances of being approved for credit cards or loans and help you secure better interest rates and terms.
We’ll go over how to build your credit and maintain a good credit score — and if you’re aiming for more, how to raise your credit score from good to excellent.
- How to improve your 706 credit score
- Understanding the benefits of a good credit score
- Next steps: Learn more about your credit score
How to improve your 706 credit score
While there’s no exact method to achieve a specific score, you can aim to be within a general score range. Consistently following these principles over time can boost your scores, making you a more favorable credit risk to lenders.
There are several key factors that affect your credit scores, though they are not all equally weighted.
Here’s a breakdown of what goes into your FICO® Score 8, the most widely used scoring model.
- Payment history (35%): This indicates whether you pay your debts on time. Creditors prefer applicants who consistently pay on time.
- Amounts owed (30%): This shows how much debt you have relative to your available credit (known as your credit utilization rate). A good guideline is to keep your credit usage at or below 30% of your total credit limits.
- Length of credit history (15%): This reflects how long you’ve had open credit accounts. Generally, the longer your accounts have been open, the better.
- Credit mix (10%): This includes the different types of credit accounts you have, such as installment loans and credit cards. Lenders prefer to see that you can manage a variety of credit types effectively.
- New credit (10%): Applying for new credit can lead to a hard inquiry, which can slightly lower your scores.
Percentage of generation with 700–749 credit scores
| Generation | Percentage |
|---|---|
| Gen Z | 24.3% |
| Millennial | 16.1% |
| Gen X | 15.3% |
| Baby boomer | 15.8% |
| Silent | 12.8% |
“Good” score range identified based on 2023 Credit Karma data.
Understanding the benefits of a good credit score
A good credit score can help you access more favorable loan deals. Despite variations in credit scoring models, a score from the upper 600s to around the mid-700s is generally viewed as good on the standard scale of 300 to 850.
Typically, the higher your credit scores, the better your chances of obtaining loans with favorable terms, including lower interest rates and fewer fees. This can provide substantial savings over the life of a loan.
Hard inquiries by credit score range
| Credit score range | Average number of inquiries |
|---|---|
| 300–639 | 8 |
| 640–699 | 5 |
| 700–749 | 4 |
| 750–850 | 3 |
Ranges identified based on 2023 Credit Karma data.
What kind of credit card can I get with a 706 credit score?
With good credit scores, you’re more likely to qualify for valuable credit card rewards like cash back, travel perks or an introductory 0% APR offer that can help you save on interest for a period.
Remember that even with good credit, some of the most exclusive credit cards might still be out of reach. However, you’ll likely have plenty of options. When it comes to which type of credit card to consider, the best credit card for you will depend on your spending habits and financial goals.
Here are some types of credit cards that might meet your needs:
- Cash back credit cards: If you value the ease of earning rewards, a cash back credit card could be a great choice. As you spend, you’ll earn cash back that can be applied to your bill or transferred to a bank account. With certain cash back cards, you’ll earn a consistent rate across all spending, but others offer increased rewards for specific categories.
- 0% intro APR cards: If you’re planning a large purchase, consider credit cards with a 0% intro APR offer. You’ll avoid interest charges on new purchases for a specified period, provided you make at least the minimum payments due on your statement on time.
- Balance transfer credit cards: With balance transfer cards, you can shift your existing card debt to a new card that offers a lower interest rate. Creating a repayment plan can make these cards a useful tool for debt management.
- Travel rewards credit cards: For frequent travelers, a travel rewards credit card might be the perfect choice. Benefits can include access to airport lounges, hotel upgrades and free hotel stays.
What kind of personal loan can I get with a 706 credit score?
While the minimum credit score needed for approval varies by lender, a score in the good range is usually enough to qualify for a personal loan.
When you apply for a personal loan, lenders generally review your credit history, income and existing debt levels.
Here are some of the most common uses of personal loans for those with good credit:
- Debt consolidation loan: This type of loan allows you to merge multiple balances into a single account. If you can consolidate your debt into one personal loan with a lower overall interest rate, it may help you save on interest charges and pay off your debt faster.
- Major purchase loan: If you have a large purchase to make and don’t want to use a credit card, taking out a personal loan might be a better option if you prefer to spread your payments over time.
- Home improvement loan: If you don’t want to tap into your home’s equity (or can’t), you might consider a personal loan for home improvements.
See our picks for the best low-interest personal loans.
What kind of mortgage can I get with a 706 credit score?
A good credit score can give you a strong footing to buy a house.
But lenders look at more than just your credit scores when approving a mortgage. They also look at factors such as payment history, debt-to-income ratio, down payment and assets.
Although there isn’t a universal credit score requirement for mortgages, different loan types have typical credit score benchmarks, and each lender can establish its own criteria.
- Conventional loans: Issued by private mortgage lenders, these loans aren’t part of government programs. Generally, you can get a loan with credit scores above the mid-600s, but having scores in the mid-700s or higher increases your chances of securing a competitive interest rate.
- FHA loans: These mortgages are issued by private lenders but insured by the Federal Housing Administration. You’ll need a minimum credit score of 580 for a 3.5% down payment and 500 for a 10% down payment.
- VA loans: Run by the Department of Veterans Affairs, these loans are intended for eligible veterans and active-duty service members. VA loans don’t have minimum credit score or down payment requirements, but you’ll still need to meet your lender’s credit and income standards to qualify.
- USDA loans: Backed by the U.S. Department of Agriculture, these loans help low-income borrowers buy homes in rural areas. USDA loans have no minimum credit score requirement.
What kind of auto loan can I get with a 706 credit score?
The best auto loan rates are usually available to consumers with good-to-excellent credit, though what “good” means can vary among lenders. Besides general models like FICO and VantageScore, lenders might also look at industry-specific scores such as FICO® Auto Scores.
It’s smart to shop around and compare offers to find the best terms available for your situation. Rates at car dealerships might be higher than those offered by banks, credit unions or online lenders.
Consider getting a preapproved car loan to strengthen your negotiating power at the dealership. A preapproval letter demonstrates that you’ve done your research. But remember that preapproval can result in a hard inquiry, which might temporarily lower your credit scores.
If you have a car loan and your credit has improved since you got it, refinancing might allow you to obtain a lower interest rate.
Next steps: Learn more about your credit score
Having good credit can give you access to borrow money with better terms, but the very best rates and products are usually reserved for those with excellent credit.
The first step in raising your credit from good to excellent is understanding your credit scores and reports.
You can check your TransUnion and Equifax credit reports for free on Credit Karma.
Regularly reviewing your credit can help you catch errors early and understand the factors that influence your scores. With Credit Karma’s free credit monitoring, you’ll receive alerts and tips to help improve your credit.
And if you find inaccuracies on your credit report, promptly dispute the errors by contacting the credit bureaus.
*Approval Odds are not a guarantee of approval. Credit Karma determines Approval Odds by comparing your credit profile to other Credit Karma members who were approved for the personal loan, or whether you meet certain criteria determined by the lender. Of course, there’s no such thing as a sure thing, but knowing your Approval Odds may help you narrow down your choices. For example, you may not be approved because you don’t meet the lender’s “ability to pay standard” after they verify your income and employment; or, you already have the maximum number of accounts with that specific lender.