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Do you have a credit score of 730 (or stuck to close to 730) and are you wondering what your approval odds are for credit cards or how to improve your score? In this article, I will tell you everything you need to know about whether or not a 730 is a good credit score for getting approved for credit cards. I will also give you some tips on how to improve your credit score and some advice on how far you need to improve your score.
Is a 730 a good credit score for a credit card?
Generally, a credit score of 730 will be sufficient to get approved for many quality credit cards. However, a lot more goes into the approval decision than a credit score. I will talk more about these additional factors below.
What kind of credit score are we talking about?
Before jumping into the article any further, it’s important to clarify what type of credit score you are talking about. There are tons of different types of credit scores. Two of the most popular types of credit scores are FICO and Vantage Scores (Credit Karma). Since most lenders utilize the FICO model, I will focus on that one.
You should also know that there are different types of FICO scores. Just like new software systems like Microsoft Windows are rolled out every few years, FICO every few years comes out with different editions of its scoring model.
For example, here are some of the previously released editions:
- FICO 98 (1998)
- FICO NextGen (2001)
- FICO 04 (2004)
- FICO Score 8 (2008)
- FICO Score 9 (2014)
Each edition is implemented in order to more accurately predict the credit worthiness of consumers based on new developments in modeling, testing, and research. FICO also develops industry specific FICO scores. In addition to the “general” credit score, there are industry specific scores for the following:
- Credit card
- Installment loan
- Personal finance
These industry scores don’t typically follow the 300 to 850 scoring model of the general credit score so you might see perfect scores of 900. Since we are dealing with credit cards here, the credit card score would be the most relevant.
How good is a 730 credit score?
A 730 credit score is considered good and just a few points shy of being excellent by many. If we are talking about a FICO score, this score is about 20 points below what would be needed for the best interest rates.
A perfect credit score is technically 850, but in order to secure the best rates you actually don’t need a credit score that high. In fact, the real perfect score is likely a 760.
Magnify Money, showed that “according to Informa Research, the lowest rates offered on various mortgage related loans are being offered to people with scores at or higher than 760. And, the lowest rates offered on various auto loans are being offered to people with scores at or higher than 720.”
I think that for optimal credit card approvals the minimum credit score somewhere around 750. So with a credit score of 730 you just need to bump your score up about 20 or maybe 30 points to get optimal approvals and rates, in my opinion. But in addition to increasing your credit score you also want to have a more robust credit profile. And below I will show you some different ways to build a better credit profile.
Other factors considered for credit cards
I think the most relevant factor beyond your credit score is how established is your credit history. You can have a score in the 700s but if you have no or very little credit history that score would not do you much good. On the other hand, if you have a couple of cards or credit lines that have been in existence for several years that is going to significantly help your chances.
It also really helps your odds whenever you have credit history with the specific bank that you are applying with. For example, if you were applying for a Chase card and you already had a chase credit card opened up for the past five years that could be extremely beneficial. It could also help your odds if you even have a bank account opened with them.
Maxed out cards
If you have credit cards that are maxed out or with high balances that can really hurt your chances of being approved even if you have a decent credit score. Read more below about credit card utilization and how to improve it.
Lots of recent credit card applications
If you have applied for a lot of credit cards in the recent month or two that can also really help or hurt your odds. The reason is that you look like a credit risk in the eyes of the bank.
Banks are going to be concerned with the stated income when determining your approval odds. Most banks don’t require you to prove your income that you state but some will require you to submit things like tax forms.
Income is mostly relevant for the more premium credit cards and for determining the amount of credit that you will receive. There are plenty of people who get approved for lower tier cards with low incomes, so you don’t have to be making six figures to get approved for good credit cards.
How can I improve my credit score
In case you need a refresher, here’s how your FICO score is calculated.
Your FICO credit score is determined in the following way:
- Payment History (35%)
- Utilization (30%)
- Credit History (15%)
- New Credit (10%)
- Mixed Credit (10%)
Payment History (35%)
Payment history is the #1 factor for determining your credit score.
Late payments will stay on your credit report for 7 years, although some bankruptcies will remain on your report for up to ten years!
Luckily, the negative effect of late payments and other negatives begins to lessen as more times passes, so although it might stay on your report for 7 years, the effect will usually only be felt for a limited amount of time (i.e., a few years).
How much a late payment affects your credit score depends on a mix of factors, including:
- How late they were and the number of past due items listed on a credit report
- The amount of money still owed on delinquent accounts or collection items
- How much time has passed since any delinquencies, adverse public records, or collection items
If you want to climb into the high 700 for your credit score you need to do everything in your power to maintain it 100% payment history. One slip-up of a 30 day or 60 day late payment could easily drop your score well into the 600s. It could take a long time to get your score back up so do everything you can to monitor your payments.
Unfortunately, if you think your payment history is holding you back there’s really not too much you can do expect wait. You could request for a goodwill adjustment and see if you could get the negative remarks removed but the success rate for those are pretty low. Still, it never hurts to try.
Utilization is your credit to debt ratio. You find this by dividing the amount of debt you have by your total credit limit. So for example, if you have a $20,000 total credit limit and owe $20,000 in debt, then your utilization is at 50%.
This can be one of the easiest factors to improve. By simply getting added as an authorized user to an account with a high balance and zero utilization you can easily drop your utilization down considerably. Just make sure that the person that adds you is responsible and won’t ruin your score by maxing out that card.
You could also consider opening up an installment loan and moving your revolving debt into an installment loan. That will essentially remove your debt from your Credit utilization allowing your credit score to improve.
And finally, something else that you could consider is opening up a business credit card that does not report to your personal credit report. In some cases you might be able to do a balance transfer to a business credit card and that debt will no longer show up on your personal credit report and therefore your utilization should drop.
Credit History (15%)
The credit history category consists of the of the following factors:
- Longest opened account
- Average age of account
- Time since newest account
- Time since each account was last used
The most important of these factors is the age of the longest opened account while average age of accounts is second. In order to preserve this you want to keep your old account open as long as possible. Another tactic can be to open up business credit cards when pursuing rewards so that you don’t open a lot of new accounts and decrease your average age of accounts.
Adding yourself as an authorized user can also help your credit history as well.
New Credit (10%)
This category is most known for its effect felt from hard inquiries.
Hard inquiries result when your credit is pulled for review by lenders and certain other institutions and they differ from soft inquiries in the latter don’t affect your credit score.
Other factors besides hard inquiries in the new credit category are:
- How many new accounts you have
- How long it’s been since you opened your last account
If you’re trying to preserve or build up your credit score you then refrain from applying for new cards. Each time you apply for a new line of credit your score will likely drop around five points although it can vary. You can mitigate this effect by searching for banks that combine credit inquiries when you apply for multiple credit cards at once.
Mixed Credit (10%)
This category evaluates your overall “mix” of credit lines.
So for example, it wants to see if you have a diverse range of credit consisting of different types of credit lines like student loans, auto loans, home loans, credit cards, etc. If you were trying to improve your credit score this is really the least concern for you.
Yes, it can help if you end up opening up an auto loan or mortgage and you diversify your credit mix. But you shouldn’t go and pursue something like a massive loan like that just to try to improve your score a few points. Instead, this is just the type of thing that if it happens great, if not, then just try to wait until you can improve this on your own organically.
A credit score of 730 will allow you to get accepted for many credit cards. But the approval decision comes down to much more than just your credit score number. You need to make sure that you have a robust credit profile with plenty of credit history and low utilization so that you are not seen as a credit risk.
H-Town based Attorney turned credit card rewards expert. Founder of UponArriving.com.