Is a 728 credit score good? Credit scores range from a low of 300 to a high of 850. A score of 728 is considered "Good". Nice work! You manage your credit well.
Credit scores aren't just important for loan or mortgage qualifying. They're also important when applying for a job or apartment or obtaining professional certifications, licenses, and security clearances. Your credit score is already in good shape, but it wouldn't hurt to improve it even more.
If you improve your credit score by 52 points to a score of 780, your credit score will be considered "Excellent". An "Excellent" credit score will make it slightly easier to qualify for the best credit card offers and mortgage and loan interest rates.
Keep reading for helpful insights on how credit scores are calculated and tips to maintain and improve your credit score. We'll also cover how to protect your credit score from damage caused by others.
How Your Credit Score Is Calculated
There are multiple credit scoring models available, but the one most commonly used by lenders is the FICO. According to MyFICO.com, there are five main factors that influence your FICO credit score:
- Payment history: 35%. Making your payments on time is one of the most important factors that determine your credit scores. Payment history is also commonly evaluated as a separate lending criteria for many types of loans (for example, mortgages).
- Credit utilization: 30%. If you have high utilization (i.e., you're "maxed out") on your credit cards, expect your credit scores to take a hit even if you make your payments on time. Ideally, you want to keep your utilization on credit cards below 30% of the credit limit. This is important even if you pay off your credit cards in full every month.
- Credit age: 15%. Length of credit history contributes to good credit scores. Avoid closing old accounts unless absolutely necessary.
- Credit mix: 10%. Lenders like to see a mix of different types of credit accounts, such as revolving (credit card) accounts and installment loans like mortgages, car loans, etc.
- New credit: 10%. Be careful when applying for new credit cards or loans. Too many new accounts can damage your credit scores.
The FICO credit scoring model ignores factors such as race, color, religion, national origin, gender, and marital status. It also ignores where you live, your age, salary, occupation, job title, employer, employment history, and any items reported as child or family support obligations.
How We Categorize Credit Scores
Credit scores range from a low of 350 to a high of 850. We categorize credit scores as 'Poor', 'Fair', 'Good', and 'Excellent' using criteria similar to what mortgage lenders use:
- Poor: 350 to 619
- Fair: 620 to 719
- Good: 720 to 779
- Excellent: 780 to 850
What Your Credit Score Can Get You
Your credit score of 728 will likely be adequate for almost any mortgage, loan, or credit card for which you wish to apply.
If you're interested in purchasing a home or refinancing an existing mortgage and you're not a veteran, your best option with the lowest rate and costs may be a conventional mortgage. You'll likely pay a slight premium in fees and rate compared to an 'Excellent' credit score.
If you're a veteran, you may want to consider a VA mortgage. VA mortgages are relatively easy to qualify for and have exceptionally good interest rates for credit scores similar to yours. If you receive VA disability income, you may also be exempt from the VA funding fee, which can make a VA mortgage even more attractive.
You can also likely qualify for an FHA mortgage, but they tend to be less attractive for borrowers with credit scores similar to yours because of the relatively expensive mortgage insurance premiums.
If you're over 62 and a homeowner, your good credit should make it relatively easy to qualify for a reverse mortgage (as long as all other qualification requirements are met).
Your 728 credit score should enable you to qualify for the most competitive auto loan and personal loan rates and credit card offers.
How Can I Maintain and Improve My 728 Credit Score?
Your credit rating is important - and not just for getting the best loan deal. Your credit profile may be scrutinized when you rent an apartment, apply for a job, or get a professional certification or security clearance. This is why it's important for your credit scores to be as strong as possible even if you have no plans to apply for a loan. Here are some tips for maintaining and improving your credit score:
- Continue to make your payments on time. If you have a 728 credit score, it's a good bet you make your payments on time. Obviously, you'll want to continue to do that to improve your credit scores even more.
- Avoid overutilizing revolving accounts like credit cards. Take care that you don't overutilize your revolving credit. High utilization can damage your credit scores even if you make your payments on time. We recommend keeping your revolving utilization low (below 30% of the credit limit) and paying your balances in full every month for the maximum credit score benefit.
- Close newer accounts before you close older accounts. If you'd like to close some accounts, be sure to keep your older accounts open. Length of credit history is an important credit scoring factor. It's usually best to close newer accounts before you start closing older ones.
- Don't open too many accounts at once. Be careful not to open too many new credit accounts at one time. If you're shopping aggressively for new loans, your scores may take a hit.
Don't Let Somebody Else Destroy Your Credit
As we've covered, it's important to manage your credit properly so your score stays strong. However, it's also important to protect your credit from damage caused by others. Here are some tips for protecting your credit score:
- Cosign with care. When you cosign for somebody, you become legally obligated on the new debt. We recommend never cosigning at all. But if you must, make sure you're cosigning for somebody who will make their payments on time without fail. If they don't, your credit score will suffer. Be especially careful about cosigning for student loans. Student loans can make it tougher to get a mortgage for many, many years to come even if you're just a cosigner.
- Freeze your credit files. If you're not planning to apply for loans in the near future, we highly recommend freezing your credit files at the three major credit repositories: TransUnion, Equifax, and Experian.
- Protect your identity. It's not enough to just be careful about giving out your Social Security number. Your personal information is stored in a huge number of places, including lenders, federal agencies, credit repositories, insurance companies, etc. A single data breach can put your personal information into the hands of identity thieves who will destroy your credit. We highly recommend protecting your credit with identity theft protection.
Do Credit Inquiries Damage Credit Scores?
Be careful with credit inquiries, but don't be paranoid about them. It's OK to have a few credit inquiries when you're shopping around for the best loan deal. If you have a few inquiries for the same purpose and they occur within a few days to a few weeks, they're treated as one inquiry for scoring purposes.
Credit inquiries usually only damage your scores if you have a large number of them in a short period of time. Your 728 credit score will likely take a hit if you appear to be desperately shopping for a loan by having a lot of lenders run your credit.
Again, credit inquiries are not usually a problem as long as you don't have an excessive number of them.
Remember, the credit reporting agencies make money from the lending industry. They want people to apply for loans. They're not going to penalize you for shopping around with a few lenders to get the best deal.
Periodically Check Your Credit
It's important to check your credit periodically to make sure there aren't any ugly surprises that could pop up the next time you apply for a loan. You can check your credit once per year for free at annualcreditreport.com (credit scores are likely an extra charge).
You wouldn't even think of posting your Social Security Number online, right? Unfortunately, there's a good chance somebody else already has. Are you a sitting duck for identity thieves?
Over 147 million Americans had their personal information (Social Security Numbers, account numbers, addresses, etc.) exposed in the Equifax data breach of 2017. That means there's nearly a 1 in 2 chance that some of your personal information was compromised.
If you haven't protected your identity yet, you're potentially a sitting duck for identity thieves. Data breaches happen all the time. It's not a matter of if, but when your personal information will be compromised.
Identity theft can wreck your good credit for years to come and be an absolute nightmare to clean up. Get protected today! I personally recommend Zander Identity Theft protection. I've been with them for over ten years, they're endorsed by Dave Ramsey, their prices are great, and their service and protection are excellent.
- Mike Roberts, Founder, MyHECM.com