If you have a credit score of 687, you have good credit, but there is still room for improvement.
Any score between 670 and 739 is considered “Good” according to the FICO credit scoring model. That model is broken down into five tiers, with “Very Poor” and “Fair” below the “Good” range and “Very Good” and “Exceptional” above it.
You’ll find having good credit is very helpful. It opens up many opportunities and removes various obstacles that stand in the way of those with a lower score. That said, a score of 687 is still on the lower end of the Good range, and steps should be taken to ensure that it goes up rather than down in the future.
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Why Your Credit Score Is 687
If you want to improve an already Good credit score, you need to break down the various elements that go into creating your score in the first place.
By reviewing things like your payment history and credit mix, you can narrow in on what areas of activity have helped you get a score as high as 687. It can also reveal areas where your financial activity may be holding you back from a higher score.
Consider each of the following credit score factors. Which ones are hurting your credit right now? Which ones are helping it?
Derogatory Marks
One of the easiest ways for your score to go down is from a derogatory mark. These come from negative events that are usually associated with a failure to pay back a debt.
When this results in a loan defaulting, a repossession, or other unpleasant events, it is considered a “high risk” event. This can generate a derogatory mark on your credit report.
If you get your free annual copy of your credit report and find a derogatory mark, it’s important to address them as soon as possible. Resolve each issue and then send a goodwill letter to the original lender to see if they are willing to remove the mark.
Hard Inquiries
When a lender officially checks your credit report before issuing a loan, it counts as a hard inquiry. This can temporarily lower your credit score.
It is a normal event and it should only last for up to 12 months. However, if you have several hard inquiries in a short period, they can add up quickly and significantly hurt your score.
Credit Mix and Age
If you only have one or two kinds of credit, it can also hold you back from a higher score. Instead, try to open up multiple kinds of credit, such as a car loan, credit cards, and a mortgage. Responsibly handling multiple variations of credit boosts your score.
When it comes to the age of your credit, the older the average age of your accounts, the better. Resist the urge to open up new accounts unless you have to, as it will lower the average age of your credit and, by extension, your score.
Credit Utilization and Payment History
The percentage of your available credit that you’re using, something referred to as your credit utilization ratio, is also important. If this ratio gets to be over 30% on your accounts, it can begin to negatively impact your score.
Your payment history is also critically important. Your ability (or lack thereof) to make payments consistently, in full, and on time makes up over a third of your entire score.
Total Debt
Finally, consider how much overall debt you have. Pay particular attention to your non-revolving debt.
This includes things like auto loans and student loans. Non-revolving debt is borrowed money that you receive all at once and then pay back in installments. The more total non-revolving debt you have, the worse off your score will be.
Again, as you review this list, consider how each of these factors has specifically impacted your score of 687. What are you doing right? What are you doing wrong? Take notes so that you can strategize ways to boost your score in the future.
What Can You Do With a 687 Credit Score?
While higher scores are preferable, there are many aspects of even a Good credit score that can make your life much easier. For instance, some of the benefits that come with good credit include:
- A better borrowing experience: It’s much easier to get approved for a loan, land an apartment, and even get hired when you have better credit.
- Access to rewards: Good credit can give you lower interest rates, minimal security deposits, higher borrowing limits, and even access to some of the credit card rewards that aren’t available for those with Very Poor and Fair scores.
- More financial power: Having good credit also gives you more power to negotiate with lenders. You aren’t someone with bad credit begging for money on the lender’s terms. You’re a responsible individual asking for a loan with decent terms and a reasonable rate.
There may still be plenty of room for improvement. Nevertheless, having good credit opens the doors to a world of new financial possibilities.
How to Improve a 687 Credit Score
It may be exciting to have access to many of the benefits of good credit. However, a lot of these are going to be restricted as long as your score is so close to the “Fair” range. (Remember, that starts at 669.)
If you want to fully bask in the glory of good credit, it’s important to take steps to solidify the health of your credit going forward. With a score of 687, you likely won’t have a major financial issue like bankruptcy or a foreclosure holding you back.
Nevertheless, there are many small-yet-potent ways that you can quietly improve your financial activity, such as:
- Sticking to your budget: If you find that you wander from your budget regularly, make sure to keep it updated and then stick to it religiously.
- Keep non-revolving debt low: Only take out loans when you need them and pay down the existing non-revolving debt that you already have.
- Stay healthy: In most cases, good health automatically equates to savings and is a foundational healthy habit of those with stellar credit.
- Review your credit report every year: As you do so, make sure to dispute errors and resolve derogatory marks whenever you find them.
With a score of 687, you already have good credit. However, now isn’t the time to rest on your laurels. Instead, build on your already stable credit in the name of a financially healthy future.
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