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How does your score compare with others?
You’re within the “good” score range (690 to 719), but just barely — any drop could land you in the “fair” category.
The average FICO 8 credit score was 718 as of April 2023, two points higher than a year before, according to FICO. The average VantageScore 3.0 was 700 as of October 2023, six points higher than a year before. So if you have a 690 credit score you are slightly below these average scores but are still in the same “good” range.
What a 690 credit score can get you
Lenders use credit scores to help determine your eligibility for financial products like loans and credit cards. Lenders also use your credit score when determining interest rates and things like whether you pay deposits for utilities.
While you’re barely in the “good” credit range with a 690 score, you’re likely to be eligible for cheaper rates on financial products like loans and credit cards than people with lower scores. The higher your score, the more products you might qualify for.
However, it’s important to note that your credit score may be only one of the factors lenders consider, alongside things like your debt-to-income ratio.
When it comes to car buying, the higher your credit score, the lower your interest rate. In the third quarter of 2023, buyers with a 690 credit score received an average interest rate of 6.88% for a new car and 9.33% for a used car, according to data from Experian’s State of the Automotive Finance Market report.
Those with higher credit scores — above 780 — are the most likely to land interest rates around 5.61% for a new car or 7.43% for a used car.
Credit scores are an essential piece of your home loan application. Your credit score might even determine whether or not you get approved for a loan at all. A 690 credit score puts you in a good position to qualify for a conventional loan, but lenders consider many other factors.
Your credit score also influences your mortgage rate. The lowest rates typically go to borrowers who have a credit score of 740 or higher. With a 690 score, you will likely have a higher interest rate than borrowers in the “excellent” (720 to 850) category. Other factors outside of your control — things like inflation, job growth and the state of the overall economy — also impact mortgage rates.
Before applying for a credit card, research its credit score requirements before proceeding. Applying for a credit card can temporarily ding your score, so you want to be sure it’s the right card for you and that you’ll most likely be approved by meeting the criteria.
Just like with credit cards, do your research before applying for a personal loan and find out any minimum credit score requirements. Higher credit scores tend to lead to lower interest rates, but you will likely have a lot of options for personal loans with a 690 score.
Strategies to keep building your 690 credit score
While a 690 credit score lands you in the “good” range, there is room to build your credit and achieve an “excellent” rating of 720 or higher. Creditors set their standards, so there is some variance in what constitutes “excellent.” However, a few manageable tips and tricks can help you polish your score, leading to lower rates and more opportunities down the road.
Before making changes, you need to know what components make up your credit score.
Your credit score is a mix of:
Payment history: a record of your bill-paying history, with on-time payments giving you a big boost. Being late on your payments can harm your score, so consider setting up autopay if deadlines aren’t your thing.
Credit utilization: the portion of your credit limits you’re using. Keeping your utilization under 30% is a good guideline, although 10% or less is even better. Making smaller payments throughout the month can help keep your utilization low.
Length of credit history: Keeping your oldest account open is smart, as potential lenders look at the length of your credit history (the “older” your accounts, the better). So even if you don’t use the credit card you got when you were 18, think twice about closing the account. It might be better to keep in the rotation for small purchases you can pay off right away to keep it active.
The mix of credit types: The best scenario is having a combination of credit accounts rather than only one kind of credit. For example, such a mix could include installment accounts that have set payments like a car loan or mortgage payment, as well as credit cards.
Recent applications: Every time you apply for a line of credit or a loan it temporarily dings your credit score. Wait about six months between applications so that they don’t drop your score unnecessarily.
There are some other things you can do to build your credit score, including asking for a higher credit limit (which will drop that credit utilization ratio if you keep spending the same); becoming an authorized user on the card of someone with stellar credit; and make sure to regularly review your credit report and dispute any errors that are bringing your score down.
What happens to a 690 score with a late payment?
Making a payment a few days late won’t sink your credit score, but it could cost you money on late fees or potentially a raised interest rate from your lender.
However, a missed payment or payment made later than 30 days can really do some damage to your credit score. A missed payment could drop a good credit score as much as 100 points. That kind of misstep can suddenly take someone with a 690 score from the “good” range into “bad” territory.