Understanding a 690 Credit Score: Good or Bad?

Is 690 a good credit score? It’s a question many people ask when they first see their credit report. In this blog, we will explore whether a 690 credit score is considered good, how it stacks up against the U.S. average, and what it means for your financial future. Let's dive in!

690 Credit Score

A 690 credit score can have significant implications for your financial health and opportunities. Let's break it down.

• Definition and Classification

A credit score of 690 falls into a range that is generally considered good. Credit scores typically range from 300 to 850. A 690 score places you in a favorable position, but there's always room for improvement.

• Score Range: 670 to 739 (FICO Good) | 690 to 719 (General Good)

In the FICO scoring model, a score between 670 and 739 is considered good. More specifically, a score of 690 falls within the range of 690 to 719, which is also classified as good. This means you are seen as a reliable borrower.

• Comparison with U.S. Average Score: 714

The average credit score in the U.S. is 714. This puts a 690 credit score slightly below the average, but still within the range that most lenders find acceptable.

• 21% of U.S. Consumers Have a 690 Credit Score

Did you know that about 21% of U.S. consumers have a credit score of 690? This highlights that while it's a common score, there’s a significant percentage of the population that might be in a similar financial situation as you.

Benefits and Limitations of a 690 Credit Score

A 690 credit score opens doors but also comes with certain limitations. Here’s what you need to know.

• Eligibility for Loans and Credit Cards

Having a 690 credit score means you're likely eligible for most loans and credit cards. However, the terms may not be as favorable as those offered to individuals with higher scores.

• Potential for Higher Interest Rates Compared to Higher Scores

One downside is that you might face higher interest rates compared to those with excellent credit scores. This can impact the overall cost of loans, such as mortgages or car loans.

• How Lenders View a 690 Score: Acceptable but Not Ideal

Lenders view a 690 credit score as acceptable, but not ideal. You’re seen as a moderate risk, which may influence their decision when setting interest rates and loan terms.

• Comparison of Interest Rates for Higher Scores

For instance, a person with a credit score above 750 might get a significantly lower interest rate on a car loan compared to someone with a 690 credit score. This difference can add up to thousands of dollars over the life of the loan.

Factors Influencing a 690 Credit Score

‍

‍

Several factors contribute to your 690 credit score. Understanding these can help you maintain or improve it.

1. Payment History

• Importance and Impact (35% of the Score): Payment history is the most critical factor, accounting for 35% of your credit score. Timely payments boost your score, while late payments can have a detrimental effect.
• Consequences of Late Payments: Late payments can significantly lower your score. Even a single missed payment can drop your score by several points.
• Strategies for On-Time Payments: Setting up automatic payments and reminders can help ensure you never miss a payment.
  ‍

2. Credit Utilization Rate

• Definition and Significance: Credit utilization rate is the ratio of your credit card balances to your credit limits. It's a significant factor in your credit score.
• Optimal Utilization: Below 30%: Keeping your credit utilization below 30% is ideal. This means if your credit limit is $10,000, you should keep your balance under $3,000.
• Calculation Examples: For example, if you have a credit limit of $5,000 and a balance of $1,000, your utilization rate is 20%.
  ‍

3. Length of Credit History

• Role in Credit Scoring (15% of the Score): The length of your credit history accounts for 15% of your score. Longer credit histories generally result in higher scores.
• Importance of Long-Standing Accounts: Keeping old accounts open can positively impact your score, even if you don't use them frequently.
  ‍

4. New Credit Activity

• Impact of Hard Inquiries: Applying for new credit results in hard inquiries, which can temporarily lower your score.
• Recommended Rest Period Between Applications: It's advisable to space out credit applications to minimize the impact on your score.
• Contribution to the Score (10%): New credit activity contributes to 10% of your overall credit score.
  ‍

5. Credit Mix

• Definition: Diversity of Credit Accounts: Having a variety of credit types, such as credit cards, mortgages, and installment loans, can positively affect your score.
• Impact on Score (10%): Credit mix accounts for 10% of your score.
• Examples: Revolving Credit and Installment Loans: A good mix might include a mortgage (installment loan) and a credit card (revolving credit).
  ‍

6. Public Records

• Impact of Negative Records Like Bankruptcies: Negative public records, such as bankruptcies, can severely damage your credit score.
• Duration on Credit Report: Such records can remain on your credit report for up to 10 years.

Strategies to Improve a 690 Credit Score

Improving your credit score from 690 can open up better financial opportunities. Here’s how you can do it.

1. Regular Score Monitoring: Keep an eye on your credit score to catch any discrepancies early.
2. Maintaining Low Credit Utilization Rates (Below 30%): Keep your balances low relative to your credit limits.
3. Seeking a Solid Credit Mix: Diversify your credit types to improve your score.
4. Making Consistent On-Time Payments: Ensure all your payments are made on time.
5. Disputing Inaccurate Entries: Regularly check your credit report for errors and dispute any inaccuracies.
6. Paying Off Collections Accounts: Settling collections accounts can improve your score over time.

Impact of Late Payments on a 690 Credit Score

Late payments can have a profound impact on your credit score. Understanding this can help you avoid common pitfalls.

• Short-Term Late Payments and Their Effects

Even short-term late payments can have a noticeable impact on your credit score. Timely payments are crucial to maintaining and improving your score.

• Missed Payments (30+ Days) Can Drop the Score by Up to 100 Points

Missed payments over 30 days can cause your credit score to drop by up to 100 points. This can move you from a good to a fair or even poor credit category.

Potential Financial Products with a 690 Credit Score

With a 690 credit score, you have several financial products available to you, though terms may vary.

• Auto Loans: Interest Rates and Approval Odds

With a 690 credit score, you can likely qualify for an auto loan, but expect higher interest rates compared to those with higher scores.

• Home Loans: Qualification and Terms

You might qualify for a home loan with a 690 credit score, but again, the terms might not be as favorable. Working to improve your score can help you secure better rates.

• Credit Cards: Types of Cards Suitable for a 690 Score

Credit cards designed for good credit are within reach with a 690 score. These may include rewards cards, but with higher interest rates.

• Personal Loans: Options and Higher Interest Rates

Personal loans are available, but expect to pay more in interest compared to borrowers with higher scores.

Managing a 690 Credit Score

Managing your credit score effectively can lead to better financial health. Here are some tips.

1. Paying Bills on Time: This is crucial for maintaining and improving your credit score.
2. Sticking to a Budget: A budget helps you manage your finances and avoid missed payments.
3. Protecting Personal Information to Prevent Fraud: Guarding your personal information helps prevent identity theft, which can damage your credit.
4. Monitoring Credit Report for Accuracy: Regular checks ensure there are no errors or fraudulent activities affecting your score.

Is 690 a good credit score?

So, is 690 a good credit score? Absolutely. It opens many doors but also has room for improvement. By understanding the factors that influence your score and implementing strategies to boost it, you can work towards securing better financial products and terms. Remember, improving your credit score is a marathon, not a sprint. Stay diligent, make informed decisions, and watch your score rise.

For expert guidance on managing and improving your credit score, consider consulting with South District Group. They offer personalized advice to help you achieve your financial goals. 

Contact South District Group today and take the first step towards a better financial future!