Can I get a loan with a credit score of 700?
Is a credit score of 700 good? While it is not a very bad score, it is not good enough to automatically qualify for a loan. It is advisable to improve your score to at least 750 to qualify for credit. Most lenders look for a minimum score of 750 when deciding whether to approve of a loan application.
Similarly, if you apply for a credit card with a score of 700, you have a lower chance of being automatically approved. Improving your score by just 50 points higher will make your loan/credit card application process much faster and easier.
What are the disadvantages of applying for a credit card with a credit score of 700?
1. Application might be rejected: This is not good as each rejection will cause your credit score to drop further.
2. Higher interest rate: Lenders will offer higher interest rates for customers with less than the minimum credit score. A higher interest rate can be an unnecessary financial burden and can also increase your chance of defaulting on your payments.
3. Lower credit limit: Lenders will see your score as a reflection of some faulty credit behaviour in the past and might be unwilling to offer you a high credit limit.
All these disadvantages above can have a negative, long-term impact on your credit score. Therefore, it is advisable to improve your credit score to 750 before applying for credit. You could contact a professional credit management company, like CreditMantri, to guide you on how to improve your score in a few months so that you can have faster and hassle-free access to credit.