Is a 687 Credit Score Good? What It Means for You

A credit score numerically represents an individual’s creditworthiness, providing lenders a quick assessment of risk. Common models include FICO and VantageScore, each using distinct methodologies. This article clarifies what a 687 credit score signifies and its impact on financial opportunities.

Interpreting a 687 Credit Score

A 687 credit score typically falls into the “Fair” or “Good” category, depending on the scoring model. FICO classifies scores from 670-739 as “Good,” and VantageScore places scores in this range within its “Good” or “Fair” tiers. While not “Excellent” or “Very Good,” a 687 score demonstrates reasonable financial obligation management.

This score suggests responsible credit handling, though your profile could be strengthened. Lenders view a 687 score as an acceptable risk, making you eligible for various credit products. However, terms and conditions offered may not be the most advantageous.

Implications of a 687 Score for Borrowing

With a 687 credit score, obtaining various forms of credit is achievable, though terms may not be as competitive as for higher scores. For mortgages, a 687 score can qualify you for financing, but interest rates may be moderately higher, potentially adding thousands to the total cost. For an auto loan, expect an annual percentage rate (APR) in the 6-10% range, above rates for top-tier borrowers.

Accessing personal loans and credit cards is common with a 687 score. Credit card approvals might come with lower initial limits, possibly $500-$2,000. Personal loan interest rates could be in the double digits, often 15-25%. These higher rates reflect a slightly elevated risk compared to individuals with “Very Good” or “Excellent” scores.

Key Factors Determining Your Credit Score

Your credit score is derived from several components that illustrate your past credit behavior. Payment history is the most influential factor, accounting for 35% of your overall score. This component assesses whether you consistently make your payments on time across all your credit accounts. Credit utilization, representing the amount of credit you are currently using compared to your total available credit, is another significant contributor, making up 30% of the score.

The length of your credit history, including the age of your oldest account and the average age of all your accounts, also plays a role, influencing 15% of the score. A longer history of responsible credit management benefits your score. The types of credit you use, or your credit mix, such as a combination of installment loans and revolving credit, contributes 10%. New credit inquiries, which occur when you apply for new credit, account for 10%, as numerous recent applications can temporarily impact your score.

Steps to Enhance Your Credit Score

Improving a 687 credit score involves implementing disciplined financial practices that directly address the factors influencing the score calculation. Consistently making all your payments on time is the most impactful action. Establishing automatic payments for your bills can help ensure that due dates are never missed.

Reducing your credit utilization is another effective strategy; aim to keep the total amount of debt across your revolving credit accounts below 30% of your combined credit limits. Regularly obtaining and reviewing your credit reports from Equifax, Experian, and TransUnion allows you to identify and dispute any errors. Avoid opening multiple new credit accounts within a short timeframe, as each new application can slightly lower your score.