What A Very Poor Credit Score Means For You:
Most of the major banks and lenders will not do business with borrowers in the “very poor” credit score range. You will need to seek out lenders that specialize in offering loans or credit to subprime borrowers andbecause of the risk that lenders take when offering credit to borrowers in this rangeyou can expect low limits, high interest rates, and steep penalties and fees if payments are late or missed.
In this “very poor” credit score range, 30-year mortgages may not even be possible, auto loans can have high interest rates and only a select few credit cards may be made available. A “very poor” credit score could also prevent you from obtaining a rental home or apartment, increase the security deposits required for your utilities, or prevent you from getting a cell phone contract: all which mean additional costs for you in the long run.
Personal Loans For Credit Score Under 687
While it is not guaranteed, one with fair credit may be a potential candidate for a personal loan. Of course, it will be more difficult for one with fair credit to receive a personal loan than for one with good or excellent credit. Fortunately, one with a 687 credit score may still be able to qualify for unsecured loans with affordable rates and payments. Still, those with fair credit will have generally higher interest rates for loans than their good and excellent credit counterparts, but some lenders may provide greater flexibility.
How To Earn A Fair Credit Score:
If you are trying to get your credit score into the “fair” range, pull your credit report and examine your history. If you see missed payments or defaulted loans or lines of credit, do your best to negotiate with the lender directly. You may be able to work out an agreement that allows you to make manageable, on-time payments. Getting back on track with these consistent payments could help improve your credit score over time. As you work through meeting your debt obligations, take care not to close any of your accounts. Open accounts with a long history could be positively contributing to your score and can continue to be used responsibly in the future.
Look at your credit report, create a budget that sets aside money to pay off your debts, and learn more about how credit scores are generated: these are the three fundamental steps in moving your credit score upwards.
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Life With A 687 Credit Score
Unless there are major errors on your credit report that have caused a drop in your credit score, it might take a few months before your score is high enough to qualify you for the best rates and terms on loans and other types of credit. However, you will have a lot more options than someone with bad credit.
Auto Loan Rates For Fair Credit
Theres no single minimum credit score needed for a car loan. But generally speaking, credit scores in the fair range may limit your options to loans with higher rates and less favorable terms.
Building your credit over time is a good way to potentially get access to better terms, but thats not an overnight process. If youre on a shorter time frame, there are a few things you can do to help.
Compare car loans on Credit Karma to see your options.
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How To Build A Good Credit Score
When it comes to monitoring your credit, makes it easy. Itâs free for everyone, not just those who have a Capital One credit card. And checking wonât hurt your scoreâa major plus if youâre working to improve a bad credit scoreâso you can check it as often as you like.
Number Of Americans With No Credit History
According to the Consumer Financial Protection Bureau , approximately 26 million adults are considered to be credit invisible, meaning they have no as theyre without credit cards, loans, and other lines of credit.1
Of course, if you have a credit card, that doesnt necessarily mean you will have a credit score. Around 19 million adults lack a score altogether due to credit reports with minimal credit usage or out-of-date credit history. Nows the time to open a credit card or loan to build your history.
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What Is A Good Credit Score Range
Good credit score = 680 739: Credit scores around 700 are considered the threshold to good credit. Lenders are comfortable with this FICO score range, and the decision to extend credit is much easier. Borrowers in this range will almost always be approved for a loan and will be offered lower interest rates. If you have a 680 credit score and its moving up, youre definitely on the right track.
According to FICO, the median credit score in the U.S. is in this range, at 723. Borrowers with this good credit score are only delinquent 5% of the time.
Keeping Your Credit Card Balance Low
The very act of having credit cards will impact your credit rating. Regardless of whether its positive or negative, it has an impact.
But something else that you want to ensure you do is keep the balance on your credit card low. The balance on your credit cards can influence over one third of your total credit score. The higher your balance is, the lower your score will be.
What you want your credit card history to show is that you have been reducing your balance on an active basis by making your minimum monthly payments on time and using your credit cards responsibly.
A good rule to follow is for your balance on your credit card to be 35% of the total limit on that card. So if you have a limit of $1,000 on your card, you want your balance to be $350 at the very highest. This holds true regardless of whether you have one credit card or multiple cards. In the long run, this will not only prevent your overall credit score from dropping, but it could also cause it to increase.
The reason why this is so important is because most lenders these days want you to stay as far away from the limit as possible in order to have the best credit scores. In fact, most experts would recommend that you never use more than fifty percent of your total available credit. If you use any more than that, or if you max out your limit, your overall credit score will drop.
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Errors In Your Credit Reports
Our credit reports contain valid information about where we live, our mode of paying bills-electronic or cash-, our police records and financial sensitivities like being sued, suing someone or declaring bankruptcy. This information is sold to insurance companies, credit lenders, employers and other businesses that use this data to gauge our insurance, credit, employment and housing applications. It is recommended by experts to review credit reports intermittently, some organizations follow this stringently.
Why is there a need to review our credit reports you ask? Simply because:
- The data in our reports affect our chances of being granted or rejected a loan and how much we are willing to pay for borrowing a loan.
- To verify that the information is accurate and up to date and complete. This will minimize complications when applying for loans or jobs or when purchasing houses or automobiles.
- To help protect us against identity theft which is basically when someone uses our personal information such as our name, Social Security number or credit card number to open up new credit accounts. Unpaid bills under this account get reported as ours on the credit record. Such inaccurate information can greatly minimize our chances of getting a credit.
Credit Score Credit Cards
Unfortunately, one with fair 687 credit score will not qualify for just any credit card, such as ones that offer big initial bonuses. The general approval process will also be more difficult for those with less than good credit. However, individuals within this credit range typically qualify for the following cards: ones with zero financing, no foreign fee, or no annual fees airline/hotel cards and store cards. Based on this, there are several credit card options available for those with average credit to turn to, but most come with annual fees and only allow a low credit limit.
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Percent Of Americans Who Have A Credit Score Of 800 Or Higher
Another report from The Ascent reveals that only 22 percent of Americans have a credit score of 800 or greater7.
Those who have a credit score of 800 to 850 are considered to have exceptional credit, and it appears that older individuals as well as those with incomes ranging from $101,000 to $150,000 have much higher credit scores within the perfect range.
What Is A Fair Credit Score Range
Fair credit score = 620- 679: Individuals with scores over 620 are considered less risky and are even more likely to be approved for credit.
In the mid-600s range, consumers become prime borrowers. This means they may qualify for higher loan amounts, higher credit limits, lower down payments and better negotiating power with loan and credit card terms. Only 15-30% of borrowers in this range become delinquent.
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A 687 Credit Score Is Generally A Fair Score While A Lot Of People Have Fair Scores You May Still Find It Difficult To Get Approved For Credit Without High Fees And Interest Rates With A Score In This Range
|Percentage of generation with 640699 credit scores|
Fair score range identified based on 2021 Credit Karma data.
Fair credit does open the door to some possibilities. With fair credit scores, you might qualify for loans with better terms than you would if you were building credit from scratch. You may also be approved for an unsecured credit card with decent interest rates and fees and maybe even some modest rewards and cash back.
To understand what fair credit means, its helpful to first understand exactly what a credit score is. A credit score is a three-digit number that gives potential lenders a sense of your credit health. In other words, it helps lenders understand how likely you are to pay back money if they decide to lend to you. Credit scores arent the be-all, end-all of lending decisions, but they can be an important aspect.
Of course, it gets a bit trickier from there.
You can have many different credit scores based on different credit-scoring models created by companies like FICO and VantageScore. These models might weigh certain aspects of your credit history differently, so one of your credit scores may end up different from another. And even if the scores are calculated using exactly the same factors and weighting, the information in them may be different, since credit-scoring models may rely on data from different credit bureaus.
Lets explore a bit more about what it means to have fair credit, and where you can go from here.
Chief Factors That Affect Your Credit Score
The following factors may make or break your credit score:
- Payment history: learn from this history, repeat it. Timely payments go a long way. Payments are considered late when theyre 30-60 days past the due date. Timely payments go a long way. This might just be the best thing you can do for your credit score.
- the runner-up to payment history. This is the second most important factor to keeping an envious credit score. This is basically the amount of credit available that is being used by you. Financial advisors commend that each card you own should have a balance of below 30% according to your credit limit. Say if your limit $7000, the balance should be under or equal to $2100.
- Length of credit history: patience is a virtue and time is money. Both these things are the MVPs when it comes to building a rock-hard credit score. The longer the mean age of our account, the better.
- The type of credit in use: An assortment of different credit account types donates to a healthy credit score. A blend of debt and credit cards with a pinch of installment debt i.e. loans on automobiles or mortgages keep the credit score running in a smooth way.
- New credit: new credits or loans you apply for. This may simple but isnt so. Each new credit will help in eventually racketing up a good score, but the duration of our credit length is key here. The longer the length of our credit history, the less the new credit applications will harm our score.
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Is My Credit Score Good Enough For A Mortgage
Your , the number that lenders use to estimate the risk of extending you credit or lending you money, is a key factor in determining whether you will be approved for a mortgage. The score isnt a fixed number but fluctuates periodically in response to changes in your credit activity . What number is good enough, and how do scores influence the interest rate you are offered? Read on to find out.
Is 687 A Good Credit Score
- Standard Definition: Yes A lot of people think good credit starts at a score of 660 and ends at a score of 719.
- WalletHubs Rating: No Based on the rate at which people with 687 credit scores get approved for credit cards that require “good credit” or better, we believe you actually need a credit score of 700-749 to have good credit.
Of course, lenders always have the last word. And they neither define good credit the same way, nor disclose exactly what they consider it to be. So even if your 687 credit score does count as good credit by in some cases, it wont in others. And thats reason enough to improve your credit score so as to erase all doubt.
Below, you can learn more about what your 687 credit score means as well as what you can do to take it to the next level.
What Credit Card Can I Get With A 687 Credit Score
As someone with fair credit, you may have access to a number of unsecured credit cards. Unlike secured cards, an unsecured card doesnt require you to put down a security deposit.
Thats a plus, but there are other factors to consider. For example, many unsecured cards available to applicants with fair credit may charge an annual fee. These cards may also come with a high variable APR on purchases, which can translate to high interest charges if you carry a balance instead of paying off at least your statement balance each month.
With fair credit, you might be approved for a credit card with a relatively low credit limit though some issuers will automatically review your credit limit after several months of on-time payments. Your credit limit is important, because its directly correlated with your credit utilization rate.
Getting Auto Loans With A 687 Credit Score
There is no credit score too low to get an auto loan, and youll be able to get one when your credit score is 687. However, if you want the best interest rates on the market, youll probably need to wait until you get your score a bit higher.
According to a 2020 quarterly report by Experian, people with credit scores of 661780 had average interest rates of 5.59% on their used car loans and 3.69% on new car loans, whereas people with credit scores of 781850 received average rates of 3.80% and 2.65%. 9 Although this is a relatively small difference, waiting until your score improves could still potentially save you hundreds of dollars on a car loan.
If youre set on getting an auto loan right now, then pay as large of a down payment as you can afford and consider getting prequalified or applying for a preapproval from your bank or credit union to increase your bargaining power.
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