Credit Scores

Is 725 a Good Credit Score? Read Credit Expert’s Opinions

It may seem strange that paying off debt will help your score improve, because your credit score is based on your levels and types of debts, but it is true. Reducing your debt can help you get better mortgage rates and interest rates on auto loans. If you’ve got a 725 credit score, that’s not bad at all–but it could be better since the highest score which you can achieve is 850. You’re still 125 points away, and if you’ve got some lingering debt, taking care of that can help your score shoot up to the 800s.

This Guide is Also Relevant to Individuals with scores 724723722, and 721, as well as 725. Nearby credit scores such as these will be able to benefit from this article.

Old, bad debt can be reported on your credit history, and thus affects your credit score, for up to seven years and 180 days from the date which it became permanently unpaid, according to a piece from the USA Today. If you have an old debt, it’s preferable for it to be old and paid than old and unpaid, so do yourself a favor and contact the creditor to work out a payment plan. Even if you settle on a lower amount, it will still be reported as paid, which is better than not paying at all.

Another thing that you need to be doing if you want to get into the upper tier of credit scores, is to pay off credit card debt. This isn’t necessarily the charges that you rack up each month and pay off at month end. These are the charges from months, or years, ago that are accumulating interest. Not only are you costing your interest, but credit score points as well. And the difference in interest rates for someone with a good score and an excellent score can end up being $200 more each month on a home loan.

Another thing, which you must be religious about doing, is making your payments early or on time every month. According to an article from MSN Money, a single missed payment can cause your score to drop by 100 points. Put reminders on your calendar and enroll in the online bill pay system for as many of your bills as possible. This way you don’t have to rely on the postal system and you save the time of writing out, and mailing, a check.

Paying down debt is a sure way to give your credit score a quick boost, and being sure you never miss a payment will help to keep your score high and keep it there.

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