Is a 687 Credit Score Good? What You Can Qualify For
Understand your 687 credit score. Learn what it represents and how it affects your financial product eligibility.
A credit score is a numerical representation of an individual’s creditworthiness. This three-digit number, typically ranging from 300 to 850, is used by lenders to evaluate the likelihood of an applicant fulfilling financial obligations. The score influences the availability of credit and the specific terms, such as interest rates, that lenders might offer.
Understanding Credit Score Ranges
Credit scores are organized into several distinct categories, each reflecting a different level of credit risk. For FICO Scores, which are widely used by lenders, these ranges typically include “Poor” (300-579), “Fair” (580-669), “Good” (670-739), “Very Good” (740-799), and “Exceptional” (800-850). A credit score of 687 generally falls within the “Good” category.
While a 687 score is considered good, it is at the lower end of that range. This means many lending opportunities are available, but better terms, such as lower interest rates, are often reserved for “Very Good” or “Exceptional” scores. Different scoring models, such as VantageScore, may have varied ranges, but a 687 score typically remains in a favorable category across models.
Components of a Credit Score
A credit score is derived from several factors within an individual’s credit report, each carrying a specific weight. Payment history holds the most weight, accounting for approximately 35% of a FICO Score. This factor assesses whether past credit accounts have been paid on time, with late or missed payments potentially impacting the score.
The amount owed, also known as credit utilization, is another significant factor, making up about 30% of a FICO Score. This metric compares the amount of credit used against the total available credit. Maintaining a low credit utilization ratio, ideally below 30% of available credit, generally contributes positively to a score.
The length of credit history accounts for approximately 15% of a FICO Score. This factor considers how long credit accounts have been established, including the age of the oldest and newest accounts, and the average age of all accounts. A longer history of responsible credit management often indicates greater stability to lenders.
New credit and credit mix each contribute about 10% to a FICO Score. New credit refers to recent applications for credit, which result in hard inquiries on a credit report. While a single inquiry usually has a small impact, multiple inquiries in a short period can suggest greater risk. Credit mix evaluates the variety of credit accounts an individual manages, such as both revolving credit (like credit cards) and installment loans (like mortgages or auto loans).
What a 687 Score Means for Financial Products
A 687 credit score generally allows qualification for a range of financial products, though terms may not always be the most competitive. For credit cards, individuals with a 687 score are likely to be approved for many standard products. While premium cards may require higher scores, options with reasonable terms and credit limits are accessible.
When seeking auto or personal loans, a 687 score usually allows for approval. However, the interest rates offered might be higher compared to those with “Very Good” or “Exceptional” credit scores. For instance, average interest rates for new car loans with a 661-780 score range (which includes 687) can be around 6.70%, while those with 781 or above might see rates closer to 5.18%. This difference can lead to higher total costs over the loan’s term.
For mortgages, a 687 score can qualify an applicant for a home loan, including conventional mortgages. Government-backed loan programs, such as those from the Federal Housing Administration (FHA) or Department of Veterans Affairs (VA), can be more accessible with this score, as they often have more flexible credit requirements. Despite approval being possible, borrowers with a 687 score may face higher interest rates and potentially less favorable loan terms than those with higher scores, leading to increased monthly payments and overall costs.
Beyond traditional lending, a 687 credit score is generally viewed positively by landlords and utility providers. This score often meets or exceeds the minimum requirements for renting an apartment or establishing utility services, reducing the likelihood of larger security deposits.