My Credit Score is 725 - Is That Good or Bad?

Bad Credit Score

Q: "Is a 725 credit score considered good?"

SHORT ANSWER
725 is a Good Credit Score! Most lenders and insurers will consider a "Good" credit score as low risk, and is typically enough to receive some of the most competitive loan terms and rates. Although the best offers are generally saved for "Excellent" credit, "Good" is a big step up from "Fair" (a score below 660).

IMPORTANT NOTE

You probably got your Credit Score from the wrong place

In my opinion, if you've received your credit score but still don't understand it - you got your score from the wrong source! The fact is that you have a total of 3 credit scores (one from each credit bureau). If you’re checking your scores from a reputable source, they will provide detailed information about your credit score – such as why it is what it is, how it got that way, how you rank, what credit rating category you're in, etc.

Having said that, I highly recommend getting All 3 Free Credit Scores from FreeScoresAndMore, not only will you get the full picture of how your credit stands, you will also have access to daily credit monitoring with monthly score updates, as well as expert knowledge on how and why your scores are what they are, so you won’t have to ask this question again.

Next Step: Check All 3 Free Credit Scores →

FULL ANSWER

How Does a 725 Credit Score Rate?

Most credit scores including FICO and VantageScore range from 300-850, the higher the better. Within that range, there are different categories, ranging from bad to excellent. Here's a general idea of the ranges and their "ratings". Your range will be indicated below.

  • Excellent Credit: 781 - 850
  • Good Credit: 661 - 780 ← You Are Here
  • Fair Credit: 601 - 660
  • Poor Credit: 501 - 600
  • Bad Credit: 500 and below

What does "Good Credit" mean to you?

A credit score in this range suggests that you have established a good credit history by making your payments on time, and that you don't have any accounts currently past due, or any recent collections, repossessions etc. on your credit report.

It also suggests that you manage your "revolving credit lines" (credit card accounts) pretty well.

Most lenders and insurers will see you as a low credit risk, and you will most likely be offered some very competitive interest rates on loans and low premiums on insurance.

A congratulations is in order, "Good" is good news. However, there is room for improvement. Some of the best interest rate offers may require a credit rating of "Very Good" or "Excellent". Be sure to check our tips and recommendations on how to improve your credit score.

How Is A Credit Score Calculated?

While exact details of how your 725 credit score was calculated is an industry secret, we do know that credit scores are formulated using many different pieces of data from your credit report. This data is grouped into five categories as shown below. The percentage to the right of each one indicates how important it is in determining your credit score.

  1. Payment History - 35% - This is typically the first thing a potential lender will want to know. Have you paid your past accounts on time? Have you missed any payments?
  2. Total Amounts Owed - 30% - How much you owe on each of your credit accounts. Higher amounts does not necessarily mean you are high risk, other factors are considered as well.
  3. Length of Credit History - 15% - Generally a longer credit history will yield higher credit scores. But that's not always the case, it also depends on how often you use your credit, and how responsibly you manage your debt.
  4. Types of Credit in Use - 10% - Credit score providers will consider the mix of credit accounts you have, such as credit cards, retail accounts, auto loans, mortgages etc.
  5. New Credit - 10% - Lenders want to know if you've recently been applying for many credit accounts in a short period of time. That can often represent a greater risk to the lender.

Different Credit Score Range Scales

There are many credit scores available to lenders, most use FICO scores, but even those can vary in how they are calculated depending on the version being used. Lenders can also create their own credit score ranges, or use industry specific credit scoring models such as those geared towards mortgages or auto loans.

Here's a quick look at the various credit scoring models and the range they use:

  • FICO Score: 300-850
  • VantageScore 3.0: 300–850
  • VantageScore (versions 1.0 and 2.0): 501–990
  • PLUS Score: 330-830
  • TransRisk Score: 100-900
  • Equifax Credit Score: 280–850

As you can see, having a 725 TransRisk score isn't nearly the same as a 725 FICO score. For that reason, it's also important to know which scoring model is being used to determine how "good" or "bad" your credit really is.

Some of the questions you probably have are: Is 725 a good FICO Score? Is 725 a bad FICO Credit Score? Is a FICO Score of 725 good or bad? What does a FICO Score of 725 mean? What does a 725 FICO Score mean?

Knowledge Is Power - Especially when it comes to credit scores

Did you know if you've received just 1 credit score of 725, you've only seen 16% of your credit data! You actually have 3 credit scores based on 3 different credit reports. That's 6 different items which are very important for you to have. Not having access to 100% of your credit data leaves you vulnerable to credit reporting errors, credit fraud, and identity theft.

Make sure you have access to all of your credit scores and reports, I recommend using a premium service such as FreeScoresAndMore and get all 3 free credit scores and daily monitoring of your 3 credit reports, with alerts of key changes to your credit files.

Next Step: Check All 3 Free Credit Scores →