Is a 690 Credit Score Bad? What It Means for You

Credit scores are a foundational tool in personal finance, reflecting an individual’s financial reliability. Lenders use these three-digit numbers to assess repayment likelihood. They influence access to financial products and their terms. Understanding them is key to managing financial health.

Categorizing a 690 Credit Score

A credit score of 690 generally falls within the “Good” category. FICO Scores (300-850) consider 670-739 good. VantageScore models classify 661-780 as good. This places a 690 score within an acceptable range for lenders.

The average U.S. FICO Score was 715 in late 2024, placing 690 slightly below average but still good. A 690 score suggests responsible credit behavior. Lenders view borrowers with scores in this range as acceptable or lower-risk.

This implies reliability, though not necessarily an exceptional risk. While a 690 score reflects a positive credit history, it does not represent the highest tier of creditworthiness. There is room for improvement to reach “Very Good” or “Excellent” score ranges.

Implications of a 690 Score

A 690 credit score carries implications across financial products. For credit cards, individuals can typically qualify for standard credit cards. While they might not access premium rewards cards or the lowest interest rates, they generally receive competitive terms. Credit limits offered are often reasonable, reflecting a lender’s confidence in the borrower’s repayment ability.

For personal and auto loans, a 690 score usually leads to approval. Borrowers can expect better interest rates than those with fair or poor credit, though not as low as those extended to applicants with excellent scores. Loan terms might be favorable, but securing the best rates typically requires a higher credit score. Lenders assess overall risk, and a 690 score suggests a manageable risk profile.

For mortgages, a 690 credit score is generally considered good enough for qualification. Many conventional mortgage programs may require a minimum credit score around 620, placing a 690 score comfortably above this threshold. However, the lowest mortgage rates are often reserved for borrowers with scores of 740 or higher. This means a 690 score will likely result in a higher interest rate, impacting the total cost of the loan.

Lenders also consider other factors for mortgages, such as income, debt-to-income ratio, and down payment amount. A solid 690 score, combined with other strong financial indicators, can help secure a home loan. Utility providers and landlords also consider credit scores for new applications. A 690 score is generally viewed positively, reducing the likelihood of requiring large security deposits for services or rental agreements.

Foundational Elements of a Credit Score

Credit scores are calculated from factors in an individual’s credit report. Payment history is the most significant component, reflecting whether bills are paid on time. Consistent on-time payments contribute positively to a score, while late or missed payments can have a negative impact.

Amounts owed, also known as credit utilization, is another important factor. This measures credit used compared to total available credit. Maintaining low balances relative to credit limits is viewed favorably by scoring models. A high utilization ratio can indicate greater default risk.

Length of credit history considers how long credit accounts have been open. A longer history of responsible credit use results in a higher score. This factor highlights the importance of established accounts. New credit activity, like opening multiple new accounts, can temporarily lower a score. Lenders may view frequent new credit applications as an increased risk.

Finally, the credit mix and types of credit used contribute to the score. A diverse mix of credit, such as revolving accounts (credit cards) and installment loans (mortgages, auto loans), can demonstrate responsible management of different credit types. This variety showcases a broader financial management capability.

Actionable Steps to Improve Your Score

Improving a 690 score involves consistent financial habits. Making all payments on time is the most impactful step. Payment history holds significant weight, and even a single missed payment can negatively affect a score. Setting up automatic payments ensures punctuality.

Reducing credit utilization is an effective strategy. This involves keeping credit card balances low, ideally below 30% of the available limit on each card and across all accounts. Paying down existing debt rather than just moving it significantly improves this ratio. A lower utilization ratio signals to lenders that an individual is not overly reliant on credit.

Avoiding unnecessary new credit inquiries benefits a score. Each hard inquiry for new credit can cause a small, temporary dip. Only apply for new credit when needed. New credit activity has a short-term negative effect on a score.

Maintaining a long credit history is valuable; keep older, paid-off accounts open. The age of accounts contributes to credit history length, positively impacting the score. Closing old accounts can shorten this history and lower a score. Diversifying credit types responsibly can be beneficial.

Regularly checking credit reports for errors is practical. Individuals are entitled to a free credit report from each of the three major bureaus annually. Reviewing these reports allows for identification and dispute of inaccuracies that could negatively impact a score. Correcting errors can improve the score.