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700 Club: Not So Elite Anymore

700 Club: Not So Elite Anymore

*Editorial Note: This content is not provided or commissioned by the credit card issuer. Any opinions, analyses, reviews or recommendations expressed in this article are those of the author’s alone, and may not have been reviewed, approved or otherwise endorsed by the credit card issuer. This site may be compensated through a credit card issuer partnership.

This article was last updated Feb 24, 2013, but some terms and conditions may have changed or are no longer available. For the most accurate and up to date information please consult the terms and conditions found on the issuer website.

760 is the new 700. Prior to the credit market collapse, you could feel pretty safe in assuming that you would get the best of everything that credit had to offer with a score above 700. This was the number that everyone strived to hit for the longest time, but quite frankly. That's not enough anymore.

Consider this your wakeup call. It's time to start building credit, even if you think you don't need to. Until the economy reestablishes itself for the long term, you need to have an extremely high credit score to back yourself up. Here is a look at why this change has come about and what you can do to adjust for it.

Why 700 Is No Longer the Standard

As credit card companies tighten their standards, they group potential applicants into categories of lending risk. You may find yourself lumped together with other card holders who are having a difficult time if your score is not high enough. This means that if you have a score of 700 and 700 or less is shown as more being more risky based on a bank's risk analysis, you could be affected. While a credit score of 700 isn't anything to be discouraged about, it's best to just realize that it isn't as stellar of a score as it once was.

What This Will Do to You

The main problem with this new level of credit standards is the fact that loans are harder to come by nowadays, even though this is the time when people need loans the most. I can remember applying for a car loan 3 years ago and not having to Credit deniedprove my income because I had a 700+ score. Now, the bank scrutinizes me no matter what. You can't rely on your credit score to get you by anymore. You have to think about the total package. Your history, income, and consistency will all play a role in your applications.

In addition to the loan issue, you may find yourself getting declined for other things because of your credit score. For instance, if you want to rent a home, you might be surpassed by another renter because he or she has a higher credit score. You may have to pay a higher deposit for your utilities because your credit score is no longer high enough to get something low. Credit is assessed for far more than it needs to be nowadays, and there's nothing you can really do about it. Focus on getting your current score as high as possible, and then just hope for the best.

What You Can Do to Regain the A-Team

The best thing to do to raise your score is to pay your bills ahead of schedule and reduce your outstanding debt balances to under 25% of the available credit amount. If you already have that going for you,Superhero try using your credit cards more frequently. As long as you continue to pay the bill early on, you'll be able to avoid interest charges and improve your score at the same time. Avoid opening any new accounts right away, and just let your current ones age themselves. Your score will go up over time.

Building credit isn't always easy when you have good credit to begin with. You simply have to take the principles you now live by and kick them into overdrive. If you can get to the 760 mark, you're going to have a much easier time securing high-dollar loans in the future. The time to start working on this is right now.

Editorial Note: Any opinions, analyses, reviews or recommendations expressed in this article are those of the author’s alone, and have not been reviewed, approved or otherwise endorsed by any card issuer.

*The content in this article is accurate at the publishing date, and may be subject to changes per the card issuer.

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