Is 740 a Good Credit Score? A Complete Guide to Understanding Your Credit Range

When it comes to personal finance, a 740 credit score represents a meaningful achievement that many people strive for. But is 740 actually a good credit score, or should you push for something higher? The answer is nuanced—it’s definitely respectable, but there’s always room for improvement if you’re determined to strengthen your financial profile.

Understanding Where 740 Sits in the Credit Score Spectrum

To answer whether 740 is a good credit score, it helps to understand how credit scores are classified overall. While different lenders may use various scoring models, the most common ranges follow this pattern:

• Below 580: Poor
• 580 to 669: Fair
• 700 to 739: Good
• 740 to 799: Very Good
• 800 and above: Excellent

At 740, you’re positioned right at the threshold of “Very Good” territory, meaning your credit score sits comfortably above average. While it’s not perfect (that would be 850), a 740 credit score demonstrates solid financial habits and reliability. You’ve already established the basic framework for responsible credit management, which is a significant milestone. However, if your score is slightly below 740, you’re still in the “Good” range—nothing to be ashamed of, though there are certainly opportunities to elevate it further.

The Five Key Factors Shaping Your 740 Credit Score

Understanding what influences your credit score helps explain why 740 is considered good and how to potentially improve beyond that point. Credit scoring can seem complicated since different card issuers employ different models, but these five factors consistently shape your results:

Payment History (Most Important) Whether you consistently pay on time or have a pattern of late payments makes the biggest difference in your credit score. If you’ve been making timely payments, this is likely why you’ve reached or maintained a 740 score. This factor alone carries the most weight, so if you’re still below 740, prioritizing on-time payments is your fastest path to improvement.

Credit Utilization The percentage of available credit you actually use matters significantly. Generally, keeping your utilization below 30% of your total available credit signals to lenders that you’re managing credit responsibly. High utilization—even if you pay it off monthly—can suggest financial strain and make lenders view you as riskier.

Average Account Age Creditors appreciate seeing a long credit history. If your oldest accounts have been open for a decade or more, this longevity works in your favor and boosts your score. This is why keeping older credit cards open, even if unused, can benefit your credit profile.

Credit Mix Having variety in your credit types strengthens your score. Rather than just credit cards, showing experience with installment loans (auto loans, student loans) or mortgage accounts demonstrates you can handle different lending relationships responsibly.

New Credit Inquiries Each time you apply for new credit, your score dips slightly due to a hard inquiry. This temporary decline fades over time and shouldn’t permanently damage your score, but it’s worth considering if you’re planning major purchases soon.

Why 740 Is a Respectable Credit Score

A 740 credit score opens doors that lower scores cannot. With this range, you’ll have access to decent financing options and favorable terms on many products. While it might not qualify you for the absolute best rates available—those typically reserved for scores above 780—you’re in a strong position compared to the average consumer.

Daniel Cohen, Founding Partner of Consumer Attorneys and co-chair of the firm’s Consumer Finance practice, emphasizes the importance of awareness: “If you have a decent credit score like 740, then you’ve already got the basic framework for financial management, so you’re on the right track. I recommend paying attention to your credit score and credit profile using daily or weekly check-ins via banking or credit card apps if you can. It helps build a more nuanced understanding of which activities impact your score.”

Strategic Moves to Strengthen Your Credit Beyond 740

If you want to push your score even higher, several actionable steps can help you achieve that goal.

Prioritize Timely Payments

Payment history remains the most influential factor in your credit score. If you’re below 740, it’s possible you’ve experienced a late payment or two. Make on-time payments non-negotiable going forward. Even if cash flow is tight, set up automatic payments for at least the minimum balance monthly. This removes the risk of accidentally missing a deadline.

Reduce Your Credit Utilization Rate

Beyond payment history, lowering your credit utilization is one of the most effective levers you can pull. If you’re using a large percentage of your available credit, it signals potential financial trouble to creditors and makes you appear riskier.

R.J. Weiss, a Certified Financial Planner and founder of The Ways To Wealth, offers practical advice: “For a quicker increase, consider asking for credit limit increases on your credit cards to improve your credit utilization ratio. However, make sure they won’t pull your credit when asking for an increase, as you also want to avoid hard inquiries.”

He adds an important caveat: “Opening a new line of credit can help in the long term but may hurt in the short term due to the new inquiry and reduced average account age. I’d avoid opening new credit before major purchases like a home. However, if you have a few years to plan, it can be beneficial.”

Minimize New Credit Applications

Each time you apply for new credit, your score experiences a small dip from the hard inquiry. While this impact diminishes over time, it’s worth strategizing if you’re planning a major financial move like applying for a mortgage. Spacing out credit applications strategically can help preserve your score.

Keep Older Accounts Open

Closing old credit accounts—even those you no longer use—can actually hurt your score. Your average account age matters, so that old credit card your parent opened for you might be worth keeping active, especially if it carries no annual fee. While not the biggest factor, it still contributes to your overall profile.

Avoid Carrying a Balance

Many people maintain credit card balances month to month, but this habit works against you. Carrying a balance means accumulating interest charges, which makes payments harder to manage and ultimately drags your score down rather than improving it.

The Bottom Line on 740 Credit Scores

Is 740 a good credit score? Absolutely—it demonstrates you’re managing credit responsibly and opens access to decent financing options. Your score sits in the upper-middle range, which is a respectable place to be.

However, if you want to reach the “Excellent” category and secure the best possible rates and terms, taking additional steps can help. Focus on the fundamentals: make on-time payments consistently, keep your credit utilization low, maintain your account history, and avoid unnecessary credit inquiries. These straightforward actions can help you transition from a good 740 score to an even stronger financial position.

Remember that building excellent credit is a marathon, not a sprint. You’ve already demonstrated the financial discipline needed to reach 740—continuing those habits will naturally lead to further improvement over time.