While there is no formal definition of what a “very good” credit score is, most experts would consider your 785 FICO Score to fall in that category. This is an above average credit score that puts you in an excellent position to get a great rate on a mortgage or auto loan. It also makes it easier to qualify for personal loans and home equity lines of credit (HELOCs), and to take advantage of the best credit card offers.
With all of that in mind, here’s a detailed rundown of what your 785 credit score means to you and different kinds of lenders. We’ll also dive into how you can not only keep your score in the very good range, but steps you can take to boost your 785 credit score to the excellent level.
What does an 785 credit score mean?
A credit score in the 740 to 799 range, according to the Fair Isaac Company (creators of the FICO Score), is a “very good” credit score. These scores are well above average for U.S. consumers and show lenders that you are very likely to pay back money you borrow. According to Wonder, individuals with scores in the 780-799 range have a 0.8% estimated probability of defaulting on a loan, and those in the 700-719 credit score range have a still-low 2.5% probability of defaulting on a loan obligation.
Although your score is below the “excellent” range of 800 or higher, your 785 credit score will generally qualify you for relatively low interest rates and the best offers for products like credit cards.
Buying a home with an 785 credit score
There are several factors that determine what type of interest rate you’ll get on a mortgage, such as your employment situation, assets, debt-to-income ratio, and the type of home you’re planning to buy. Having said that, your credit score is a very important piece of the puzzle, and a 785 credit score should qualify you for an excellent mortgage rate.
To illustrate this, as of Nov. 1, 2022, the average mortgage APR in the U.S. was approximately 7.1%. Borrowers with a 760 FICO Score or higher received an average APR of 6.61%, while those in the 700-759 range had an average APR of 6.83%.
Again, there are several factors in addition to your credit score that a mortgage lender will look at. But if you get denied for a mortgage, or you don’t get an interest rate that’s well below average, it likely won’t be because of your credit score.
Buying a car with an 785 credit score
Your very good credit score can make an even bigger difference in your interest rate when you apply for an auto loan.
As of Nov. 2022, the average APR on a 60-month new auto loan in the United States was 5.59% for borrowers with FICO Scores of 720 or higher. In contrast, the average borrower in the 660-689 credit score range (which is generally considered to be “good” credit) received an APR of 9.16%. This adds up to more than $4,000 of additional interest on a $40,000 new car loan. Plus, many auto manufacturers offer promotional finance deals (such as 0% APR for 60 months on a new vehicle). Your 785 credit score puts you in an excellent position to qualify for these.
It’s also worth mentioning that interest rates can vary significantly among lenders, even for borrowers with the exact same credit score. So, if you’re buying a home or car, it’s important to shop around for the best loan terms. In fact, the FICO credit scoring model is designed to encourage rate shopping. Any credit inquiries for the same type of loan in a short period (usually two weeks) will count as a single inquiry for scoring purposes. Therefore, it doesn’t hurt your credit score to apply at multiple lenders.
Getting a credit card with an 785 credit score
Generally speaking, a credit score like yours is sufficient to qualify for just about any credit card offer in the market. The best rewards credit cards and balance transfer offers are within your grasp. But keep in mind that your credit score is only one piece of information companies look at.
For example, some credit card companies will automatically reject applicants who have opened too many new credit accounts within the past year, regardless of credit score. Income and employment also play a role, and if you owe too much on other credit lines, it could result in a rejection, even if your credit score is high.
Getting a personal loan with an 785 credit score
First off, there is no personal lender on the market that requires a credit score higher than your 785, so it’s unlikely you’d get rejected for a personal loan due to your score. In fact, you’d be in an excellent position to qualify for most personal lenders’ best rates.
However, keep in mind that your credit score is only one piece of the application. For example, you can have an excellent credit score, but if your other debts are too high, it can lead to a rejection.
How can I get my credit score even higher?
With your 785 credit score, you are pretty far from having bad credit. You can generally qualify for whatever type of loan you need and can get favorable interest rates and terms. However, you’re not in the elite realm of “exceptional” credit, which is generally considered FICO Scores of 800 or higher.
If you’re looking to improve your credit score and join the 800+ club, here are a few suggestions that can help you get there:
- Keep your credit utilization low. The average FICO High Achiever (scores above 795) uses just 7% of their available credit.
- Only apply for new credit if you really need it. Hard credit inquiries from within the past 12 months can adversely affect your score, and recently opened accounts can also hurt. Checking your rates for loans can often be done without a hard credit pull (known as a soft inquiry), and many lenders will specify this.
- Let your credit age. The average consumer with an 800 or above has an average age of revolving credit accounts of nearly 12 years. The length of your credit history makes up 15% of your FICO score, so one of the best ways to build your credit report is simply to wait.
- Keep paying your bills on time. Payment history is admittedly a no-brainer but is worth mentioning. It’s not uncommon for someone in the 740-799 range like you to have a late payment or two on their credit history, but it’s virtually non-existent for consumers with scores of 800 or higher.