If you have a credit score of 673, you may be wondering if you have a reasonable score or not. It turns out that you are just a few points over the “good” credit score range according to the FICO credit score model.
Out of a total credit score range of 300 to 850, the “good” range extends from 670 to 739. This puts you right in the middle of the spectrum, which means you have neither terrible nor exceptional credit.
A good credit score is fine, and certainly no cause for alarm. However, if you want to get the most out of your credit, it’s wise to study the factors that are both boosting and weakening your score so that you can take steps to improve it in the future.
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Why Your Credit Score Is 673
No one’s credit score comes from the same set of factors. This is because every credit score is a reflection of an individual’s entire trackable credit history. In other words, it represents an amalgamation of all of the different good and bad financial decisions that each individual has made.
With that said, several categories and activities consistently impact a credit score, regardless of whose score is in question. Review these below and consider which ones are more likely helping or hindering your credit at the moment.
The number one factor that impacts your credit score is your payment history.
FICO reports that this accounts for a whopping 35% of your total score. Your ability or inability to make payments consistently and on time can have a dramatic effect on where your score ends up.
Credit Utilization Ratio
The percentage of credit you use can have a huge impact on your credit score as well.
This is referred to as your credit utilization ratio. For example, if you have $5,000 of available credit and you borrow $1,000, you have a 20% credit utilization ratio. If your ratio gets above 30%, it can hurt your score.
Another factor that can drag down your credit is simply having too much debt.
If you have an enormous quantity of debt, it can be a sign that you have unhealthy spending habits. Paying down existing debt should always be a priority, not just for your credit score but for your overall financial health.
If your credit report has a derogatory mark — or more than one — it can negatively impact your score for years.
You may see derogatory marks on your report for a variety of reasons such as:
- A collection agency made a claim on an unpaid debt;
- You defaulted on a loan;
- You had an item repossessed;
- You went through a foreclosure.
Average Credit Age
The age of your credit makes a big difference in how high your score can get.
Someone in their twenties will likely find it more difficult to raise their credit score than someone in their fifties. This is because the young adult hasn’t had much time to accumulate and pay off debt.
When it comes to credit history, if you take out several new loans close together, they can collectively reduce the average age of your credit as well.
A hard inquiry takes place when a lender formally checks your credit before giving you a loan.
When this happens, it can temporarily reduce your credit score. Fortunately, the negative effects of a hard inquiry typically last for no more than a year.
Varying Kinds of Credit
Finally, if you have limited forms of credit, it can hold back your credit score, as well.
If you want to improve your score, consider diversifying your current credit options. This can include things like an auto loan, a mortgage, a personal loan, student loans, and a credit card.
What Can You Do With a 673 Credit Score?
If you have a credit score of 673, you have a good credit score. While this isn’t in the “very good” or “exceptional” ranges, it does give you access to several financial options that are more difficult to access with a “poor” or even a “fair” score, such as:
- Applying for a loan: From a mortgage to a car loan or even a personal loan, having a good credit score makes it easier to get approved when you need to borrow money. Just be aware that your lower score may mean you end up with a higher interest rate.
- Getting lines of credit: Whether it’s a credit card or a home equity line of credit, if you have a good credit score, you can get approved for a line of credit. Once again, be aware that you may have to pay higher interest rates. In addition, you may not qualify for certain credit card perks and benefits.
- Renting an apartment: Many landlords like to do a credit check to see how your financial history looks. A good credit score shows that you can handle things like paying the rent on time.
You can do many things with a good credit score. However, it’s important to remember that improving your score can open up even greater opportunities.
How to Improve a 673 Credit Score
If you want to gain access to lower interest rates and better perks and benefits, you need to work to raise your credit score. You can do this in a few different ways, such as:
- Always making your payments on time — this is ground zero for good credit.
- Obtaining your free annual credit report from the three credit bureaus and reviewing it for errors that may need to be disputed.
- Paying down existing debt as aggressively as possible.
- Continuing to use your credit — both borrowing from and paying back lenders — in responsible ways.
The good news is, you don’t have to follow any of the above recommendations because you need to fix your credit. Your good credit score means you already have a respectable level of credit.
However, if you want to continue to build toward a more sound financial future — and open the doors to better opportunities, to boot — it’s wise to find the best ways to continue improving your credit score for the foreseeable future.
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