A credit score of 692 officially falls in the “Good” credit range of the FICO credit scoring model. This model is broken into five different tiers:
- Very Poor: 300 to 579.
- Fair: 580 to 669.
- Good: 670 to 739.
- Very Good: 740 to 799.
- Exceptional: 800 to 850.
While Good credit is a great start, there is still a long way to go before you can reach “Very Good” and “Exceptional” credit. These higher ratings give you access to ever-better financial incentives and benefits.
Additionally, it’s important that you take steps to keep your credit score from sliding back into the “Fair” range, as this would mean you no longer have good credit. This can severely hamper your financial activity and even exclude you from certain rewards and benefits.
Below is a breakdown of how you got to a 692 credit score, what benefits a score of this nature includes, and how you can continue to increase your score in the future.
Table of Contents
Why Your Credit Score Is 692
While having Good credit is helpful, it’s important to dig into what specifically is locking your score in at 692.
Understanding what activities have led to your current score can help you weed out bad behavior and reinforce good financial habits as you look to take your score from good to great.
With that in mind, read through the following factors. Each one uniquely impacts your score in its own ways. Consider how each item has specifically added or detracted to your modestly healthy credit score of 692.
Your Payment History and Derogatory Marks
Your payment history is the most important factor to consider. Your ability or lack of ability to make your payments consistently contributes to over a third of your total credit score.
Derogatory marks are another critical factor to look out for. These typically show up on your credit report due to a chronic failure to make payments. A derogatory mark can come from:
- A claim from a collection agency.
- A delinquent account.
- A repossession or foreclosure.
With a score of 692, you likely aren’t dealing with a larger derogatory mark, such as a bankruptcy or foreclosure. Nevertheless, if you have even a smaller derogatory mark on your credit report, it can stay there, hurting your score, for up to seven years.
If you find a derogatory mark, do your best to resolve it. After that has been done, send a forgiveness letter to the original lender asking them to proactively remove the mark.
As a side note, you may also find a hard inquiry on your report. While this can hurt your score, it is a normal activity that takes place when a lender checks your credit before giving you a loan. A hard inquiry should only lower your score for up to 12 months.
Credit Age, Mix, and Utilization Ratio
Three other major factors that go into your credit score focus on the age, variety, and utilization of your credit. These are:
- Your credit utilization ratio: This is the percentage of your available credit that you’ve actively borrowed. If it gets too high, it can negatively impact your score.
- Your credit mix: The greater the variety of different forms of credit you use, the more it can boost your score.
- Your credit age: The older your credit is, the better. This is referring to the average age of all of your credit, which means you should only open up new lines of credit when necessary.
The way that you use your credit, along with its age and differentiation, are all important factors to consider.
Your Total Debt
The last factor to review is your total debt. This is referring to your total non-revolving debt, which consists of money that you borrowed all at once and are paying back in installments. Auto loans are a good example of a non-revolving form of debt.
If you have too much debt like this, it can scare away lenders, who will see it as a sign that you already can’t pay back past debts. It can also hurt your credit score.
What Can You Do With a 692 Credit Score?
Before considering how you can improve your score, it’s worth stating that it is always a good thing to have good credit. Even if you’re on the lower end of the spectrum, good credit can still allow you to:
- Be approved for an apartment;
- Get lower interest rates, smaller security deposits, and higher credit limits;
- Gain access to various credit card rewards and benefits;
- Refinance existing loans;
- Have more negotiating power;
- Get a job.
With a score of 692, you’re already starting to gain access to these financial perks. However, if you can get your score even higher, it will only enhance their impact on your financial health.
How to Improve a 692 Credit Score
At this point, you already have Good credit. This means it’s unlikely you need to make any sweeping changes to the way you’re handling your finances. Even so, there is a reason — or very likely multiple reasons — that your score isn’t higher at this point.
Consider what you learned when reviewing the factors that make up your credit score. Use this knowledge to start building a long-term plan to improve your score. Look for ways to change your existing financial habits to line up with what is best for your credit.
Here are a few suggestions for ways to get started:
- Set up autopay and put reminders in your phone to ensure that you’re making all of your payments on time.
- Pay down as much of your non-revolving debt as possible.
- Continue to use your revolving debt responsibly to build up a positive credit history.
- Avoid opening up new lines of credit unless you have to.
- Get a copy of your credit report every year and then dispute errors and resolve derogatory marks.
- Stick to your budget and keep it up to date at all times.
- Create long-term goals and a financial plan to help you stay motivated and on target.
If you can incorporate new ways to handle your finances even better than you already are, it can help you slowly improve your credit score.
Don’t expect a change overnight. Nevertheless, with patience, focus, and determination, it’s possible to slowly inch your score upward until you eventually reach the Very Good and even Exceptional credit ranges.
Image Source: https://depositphotos.com/
Want a FREE Credit Evaluation from Credit Saint?
A $19.95 Value, FREE!