If you’ve recently checked your credit score, you may have some questions. With a range spanning from 300 to 850, there’s no clear and obvious answer for what a particular credit score means — at least not on the surface.
Fortunately, there are guidelines that can help to shed some light on what each score represents. If your score is at 671, your credit is in decent shape.
A FICO credit score of 671 is officially classified as “Good,” though just barely, as the good credit score range stretches from 670 to 739. While you don’t have a poor or very poor score, you also don’t have a very good or exceptional score, either.
It can be helpful to unpack why your score is at 671. This will reveal what financial activities are holding your score back, what you’re doing that is positively impacting your score, and what new habits you can cultivate to improve your score in the future.
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Why Your Credit Score Is 671
There isn’t usually a consistent reason for a credit score. Each person’s score is an amalgam of years of financial activity. Negative marks can sometimes last for years, and so too can positive trends.
If you’re curious why your score is currently at 671, here are a few of the primary factors that could be involved:
Payment History
One of the biggest influencers of your credit score is your payment history. The FICO credit score model attributes 35% of your score to your payment history.
If you make all your payments on time, there’s a good chance that this is boosting your score. However, if you miss payments, fixing that habit can help to take your score from good to great.
Derogatory Marks
If your score is being held back by something, which is certainly possible at 671, there’s a chance it’s a derogatory mark (or even more than one.) A variety of different events can lead to a derogatory mark, such as:
- Defaulting on a loan.
- Collection agency claims.
- Repossessions and foreclosures.
When negative events like these take place, they tend to drag down your score for a very long time. For instance, foreclosures and collections accounts remain on your credit report for seven years, even if the situation is amicably resolved well before that point.
If you have a derogatory mark on your credit report, it’s important to try to remove it. Start by paying off the debt or otherwise resolving the scenario. Then send a goodwill letter to try to have the mark removed ahead of schedule.
Total Debt and Credit Utilization Ratio
Another major factor that can influence your score is your credit utilization. This is the amount of available credit that you’re using. For instance, if you have $10,000 of credit available and you’ve borrowed $3,000, your ratio is 30%.
Anything over this 30% mark is considered less than ideal. If that’s the case, you may want to either increase your credit limit or pay down your existing debt to improve your utilization ratio.
Length of Credit History
The average length of your credit history can significantly impact your score. For instance, if you’re young, you may not have enough history to warrant a higher score, even if you make all of your payments on time.
New Credit and Hard Inquiries
Finally, if you’ve opened up multiple lines of credit recently, it may have pushed your score lower. The flood of young credit onto your account can reduce the average length of your credit history.
In addition, you may have made more than one hard inquiry in opening up those lines of credit. Hard inquiries can negatively impact your score, though the effect only lasts for a year or less.
What Can You Do With a 671 Credit Score?
There are many ways to use a good credit score. However, the lack of a very good or excellent score can hold you back from certain perks as well. Here are some pros and cons of having a 671 credit score or a “good” score between 670 and 739:
- Credit cards: A good credit score should allow you to open up a wide variety of credit cards from major lenders. However, you are less likely to qualify for many of the bonuses and rewards that those cards often offer.
- An apartment: Having a good credit score can also help you get an apartment, as a landlord will want to see good credit and payment history. Once again, though, if your score is lower due to something like a history of making late payments, this may deter a landlord from letting you rent an apartment.
- A mortgage: When it comes to a mortgage, you’ll likely be able to obtain a loan, but you may not get a great interest rate.
- An auto loan: The same goes for an auto loan as it does for a mortgage. If you have a good score, you’ll likely qualify, but it may not be at a desirable interest rate.
While you can do many things with a 671 credit score, the world isn’t quite your oyster yet.
How to Improve a 671 Credit Score
If you have a 671 credit score, you’re in good shape. Literally, as your credit is officially “good.” However, there is a lot of room for improvement. Here are a few suggestions for ways to boost your score as you look to take your finances from respectable to incredible.
- Make your payments: Consistent and on-time payments are critical for excellent credit. If you’re failing to make every payment on time, make it a goal to do so from now on.
- Use credit more often: If you tend to avoid credit options, consider opening up new lines of credit. Then use them and pay them off to increase your credit history. Just ensure that you avoid overborrowing and make your payments on time.
- Pay down your debt: Along with increasing your available credit, it’s always helpful to pay down existing debt, as well.
- Review your credit report: Often, credit reports will have errors that can be disputed. In addition, you may find a collection agency or some other derogatory mark for which you can request forgiveness.
Fortunately, you’re starting from a solid foundation. Many people who have a score under 670 find themselves working to repair damaged credit.
In this case, you’re simply beginning to work on your existing score in the hopes that it will eventually become “very good” and then “excellent.” If you can do that, you’ll have a firm credit foundation to help you maintain your financial independence.
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