Why a 720 FICO Is the New 740 — and How to Get There

What's Actually Changed

A 720 FICO score will still get you approved for a mortgage. It just won't get you the best rate anymore, and that's the part most people miss. (https://www.myfico.com/credit-education/blog/credit-score-mortgage-rates), and 720 usually lands one bracket below where the sharpest pricing starts. Prepping for a home purchase in the next few months? The gap between "good enough" and "best rate" is smaller than you'd think — and closeable in 60-90 days.

Why 720 Isn't the Finish Line Anymore

Here's the number that matters: on a current 30-year conventional rate table, a 720 FICO priced at 6.89% APR, while a 740 FICO priced at 6.77% — (https://www.experian.com/blogs/ask-experian/average-mortgage-rates-by-credit-score/) on the same loan. On a $350,000 mortgage, that's roughly $22 less a month at 740. Not dramatic on its own. Multiply it by 360 payments and it adds up.

The gap makes more sense once you look at how FICO labels its own scale. 670-739 is "Good," and 740-799 is "Very Good" — 720 sits comfortably inside the Good band, but not in the tier lenders treat as top-shelf. That distinction didn't used to carry as much weight. It matters more now because pricing grids have gotten more granular since loan-level price adjustments were reworked, and lenders lean harder on precise score bands to set risk-based pricing.

You're not alone if you're sitting right at 720, either. The median credit score among new mortgage applicants was 772 in early 2025, while the national average sits at 715 — meaning a large share of people shopping for a mortgage right now are clustered close to this exact line, weighing whether it's worth the effort to push higher before applying.

How Lenders Actually Price the Tiers

Mortgage pricing doesn't move in a smooth curve as your score climbs. It moves in steps. (https://www.myfico.com/credit-education/blog/credit-score-mortgage-rates) — 700-719, 720-739, 740-759, and so on — so a 720 and a 740 can land in genuinely different pricing brackets even though both would casually get called "good credit." Mortgage professionals estimate the (https://ficoforums.myfico.com/t5/Mortgage-Loans/Middle-score-of-720-v-740/td-p/6135350), depending on the lender and loan size. On a $350,000 loan, that's roughly $875 in loan-level price adjustments.

What determines which bracket you land in comes down to (/fico-factors-explained-what-really-moves-your-score): payment history, amounts owed (utilization), length of credit history, credit mix, and new credit. Utilization and payment history carry the most weight — and they're also the two you can move fastest before an application.

Worth knowing, too: underwriters don't rely on a single bureau's score. They pull a (/tri-merge-credit-report-mortgage-explained) that combines all three, then typically use the middle score of the three (or the lower of two, for joint applications). That's why cleanup has to hit all three bureaus — not just the one you happen to check on a free app.

Your 60-90 Day Action Plan

If you're at 720 and want to be closer to 740 by the time you apply, here's where to spend your time.

Weeks 1-2: get the baseline right. Pull all three of your reports. Dispute anything that's actually wrong — a misreported balance, an account that isn't yours, a payment marked late that wasn't. Got more than 90 days before your mortgage timeline? Follow the site's 12-month pre-mortgage credit prep plan in full; this article is the compressed version.

Weeks 2-8: attack utilization first. This is the fastest-moving lever you have. Get revolving utilization under 30% on every individual card, not just the blended average across all of them — a single maxed-out card can drag your score down even if your overall utilization looks fine on paper. Under 10% is even better. Utilization gets recalculated the moment your statement balance reports, so paying down balances a few days before your closing date (not just before the due date) can show up in your score within a single billing cycle.

Throughout: protect what you already have. Skip new credit cards, auto loans, or store financing until after your mortgage closes. Every new hard inquiry and new account works against you right when underwriters are looking closest. Rate-shopping the mortgage itself? Understand the difference between a (/soft-pull-vs-hard-pull-credit-score-impact) so you don't accidentally trigger extra inquiries. And leave your older accounts open — closing them shortens your average account age, which works against the score you're trying to build.

If your timeline is tight, or your file has more going on than a simple utilization problem — collections, a past late payment, a thin file — pairing this DIY plan with professional help can make sense. (/#top-companies) if you'd rather have someone else manage the dispute and cleanup work while you handle the mortgage side.

Frequently Asked Questions

Is a 720 credit score good enough to buy a house?

Yes — 720 clears every conventional, FHA, VA, and USDA minimum with room to spare. The catch is that 720 sits in FICO's "Good" band (670-739), one step below "Very Good" (740-799), and many lender rate grids price 740+ noticeably better. You can absolutely close a mortgage at 720; you'll likely pay a bit more for it than a 740 borrower would.

How much does going from 720 to 740 actually save on a mortgage?

On a live conventional rate table, 720 priced at 6.89% APR versus 6.77% APR at 740 — roughly a 0.12-point gap. On a $350,000 loan that's about $22 a month, but it compounds over 30 years, and mortgage professionals estimate the loan-level price adjustment difference between the two scores at around 0.25% of the loan amount.

How long does it take to raise a credit score from 720 to 740?

For most borrowers, 60-90 days is realistic if the gap is driven by utilization rather than derogatory marks. Utilization-driven changes can show up within one to two statement cycles, so paying down revolving balances well before your mortgage application is the fastest lever you control.

What's the single fastest way to move a 720 score higher before applying for a mortgage?

Cut revolving credit card utilization — ideally under 10%, but under 30% at minimum — on every card, not just the average across cards. Utilization is recalculated the moment your statement balance reports, so this is the factor most likely to move a score within a single billing cycle.

Should I avoid opening new credit before a mortgage application?

Yes. New hard inquiries and new accounts both lower your average account age and add short-term risk signals right when underwriters are looking closely. Hold off on new credit cards, auto loans, or store financing for at least 90 days before and during your mortgage application.

Do all lenders use the same 720 vs. 740 pricing tiers?

No. Pricing tiers vary by investor and loan type, but the common pattern is 20-point brackets (700-719, 720-739, 740-759, and so on), so a 720 and a 740 can land in different brackets even though both round to "good credit" in casual conversation.

The Bottom Line

A 720 FICO will get you to the closing table. It just won't get you the rate a 740 would. The gap between the two is real, measurable, and closeable in a normal mortgage timeline if you focus on utilization first and protect your file from new inquiries while you wait to apply. Whether you handle the cleanup yourself or bring in help for the parts that need it, the 60-90 days before you apply are the highest-leverage window you'll get.