Is a Credit Score of 673 Good? What It Means for You

A credit score is a numerical summary of an individual’s creditworthiness, playing a significant role in personal finance. This three-digit number influences financial opportunities, from securing loans to renting a home. Understanding your credit score is important for managing your financial future, as it provides lenders with an assessment of your past financial behavior and indicates the likelihood of repaying new debts.

Understanding Credit Score Ranges

Credit scores are generated by two models: FICO and VantageScore. While both evaluate similar financial data, their scoring ranges and emphasis on certain factors differ. FICO scores range from 300 to 850, categorizing scores into tiers: Excellent (800-850), Very Good (740-799), Good (670-739), Fair (580-669), and Poor (300-579). VantageScore also uses a 300-850 scale, with comparable ranges for its categories.

A credit score of 673 falls within the “Good” range for both FICO and VantageScore models. This indicates responsible debt management, including a reliable payment history and reasonable credit utilization. While not in the highest tier, a 673 score positions an individual favorably for many lending products, providing access to a broader range of credit options than lower scores.

Implications of a 673 Credit Score

A 673 credit score opens doors to various financial products, including credit cards, auto loans, and mortgages, though often not with the most preferential terms. For credit cards, individuals with this score can qualify for cards with reasonable annual percentage rates (APRs) and some rewards programs. However, premium cards offering extensive benefits or the lowest introductory rates might still be out of reach. Lenders view a 673 score as acceptable risk, allowing for standard approvals.

Regarding auto loans, a 673 score qualifies borrowers for competitive interest rates. An annual percentage rate on a new car loan for someone with a 673 score might range from around 5% to 8%, depending on market conditions and the specific lender. For mortgages, a 673 score is sufficient to qualify for conventional loans, including those backed by government agencies. While a higher score could yield a lower interest rate, a 673 score allows for homeownership with manageable terms. Loan origination fees might be slightly higher than for borrowers with very good credit.

Beyond traditional lending, a 673 credit score also influences other aspects of personal finance. Landlords frequently review credit scores as part of rental applications, and a 673 score is seen as positive, indicating reliability in financial commitments. Similarly, insurance companies may use credit-based insurance scores, derived from credit report data, to determine premiums for auto and home insurance policies. A good score can help secure more favorable rates, potentially leading to lower monthly payments.

Factors Influencing Your Credit Score

Components contribute to the calculation of a credit score, each carrying a different weight. Payment history is the most significant factor, accounting for about 35% of a FICO score. This category evaluates whether payments have been made on time, with late payments having a negative impact on the score. Even a single payment that is 30 days past due can significantly reduce a score.

Amounts owed, also known as credit utilization, is another major factor, making up about 30% of a FICO score. This refers to the amount of credit you are using compared to your total available credit. Maintaining a low credit utilization ratio, ideally below 30% of your available credit, demonstrates responsible credit management. A high utilization ratio suggests a greater reliance on credit and can lower your score.

The length of your credit history accounts for about 15% of your score. This factor considers how long your credit accounts have been open and the average age of all your accounts. Longer credit histories with consistent positive activity result in higher scores. New credit, including recent applications and newly opened accounts, makes up about 10% of the score. Frequent applications for new credit in a short period can signal higher risk to lenders. Finally, your credit mix, representing different types of credit accounts (e.g., installment loans, revolving credit), contributes about 10% to your score, showing your ability to manage various forms of debt.

Steps to Improve Your Credit Score

Improving a credit score involves consistent financial discipline focused on the factors that influence it. Making all payments on time is the most impactful action, as payment history carries the most weight in score calculations. Setting up automatic payments for all outstanding debts can help ensure that minimum payments are never missed. This consistent positive behavior builds a foundation for a higher score over time.

Reducing your credit utilization ratio is another effective strategy. This means paying down revolving credit balances, such as credit card debt, to keep the amount owed well below your credit limits. Aiming for a utilization rate under 30% on each card and overall across all cards is a recommended practice. For example, if you have a credit limit of $1,000, try to keep your balance below $300.

Avoiding new credit applications also helps improve your score by limiting hard inquiries on your credit report and allowing your average account age to increase. Each hard inquiry can temporarily lower your score by a few points, although the impact is minor and short-lived. Regularly checking your credit reports from all three major credit bureaus—Equifax, TransUnion, and Experian—through AnnualCreditReport.com is important. This allows you to identify and dispute any errors, such as incorrect late payments or fraudulent accounts, that could be negatively affecting your score.