A FICO® score of 686 is in the range of scores that are considered good, which is 670 to 739. The average U. S. FICO® Score, 714, falls within the Good range. A large number of U. S. Good FICO® Score customers are regarded by lenders as “acceptable” borrowers, which means you can apply for a wide range of credit products, but you might not be offered the best interest rates or the most exclusive products.
Approximately 9% of consumers with Good FICO® Scores are likely to become seriously delinquent in the future.
A credit score of 686, which is between 670 and 739, is regarded as “fair.” While it’s not the worst score, it’s not the best either. This implies that your chances of being accepted for loans with advantageous terms and rates may be limited.
But don’t fret! There are still plenty of options available to you. Now let’s examine the various loan programs that a 686 credit score could make you eligible for:
Unsecured Credit Cards with Rewards
The good news is that you can likely get approved for an unsecured credit card with rewards even with a fair credit score. These cards don’t require a security deposit unlike secured cards. However, be prepared for potentially higher annual fees and variable APRs on purchases.
Home Loans
Yes, you can still get a home loan with a 686 credit score. However, you might face higher interest rates and less favorable terms compared to borrowers with good or excellent credit. Consider exploring government-backed loans like FHA, VA, or USDA loans, which might be easier to qualify for with a lower down payment.
Auto Loans
Similar to home loans, you can get an auto loan with a 686 credit score. However expect higher interest rates and potentially stricter terms. To improve your chances of getting a better deal consider making a larger down payment or finding a co-signer with good credit.
Personal Loans
Getting a personal loan with a 686 credit score is possible but you might face higher interest rates and fees compared to borrowers with better credit. Carefully consider whether the loan is worth it, especially if you’re using it to consolidate debt with high-interest rates.
Tips for Improving Your Credit Score
While a 686 credit score opens doors to various loan options, it’s always a good idea to strive for a better score. Here are some tips to help you improve your credit health:
- Make on-time payments: This is the single most important factor affecting your credit score. Set up reminders or use autopay to avoid missing payments.
- Keep your credit utilization low: Aim to use less than 30% of your available credit at any given time. This shows lenders you’re responsible with credit.
- Build a longer credit history: Keep your oldest credit accounts open and avoid closing them prematurely.
- Apply for new credit sparingly: Hard inquiries from credit applications can temporarily lower your score.
- Consider a secured credit card: If you’re new to credit, a secured card can help you build a positive credit history.
A 686 credit score isn’t ideal, but it doesn’t mean you’re limited in your loan options. By understanding your credit score and exploring different loan types, you can find the right financing solution for your needs. Remember, building credit is a journey, and with consistent effort, you can improve your score and unlock even better loan opportunities in the future.
Understand the benefits of a good credit score
A short credit history with sound credit management practices may be reflected in a good credit score. Additionally, it could indicate a longer credit history tainted by a few errors along the way, like sporadic missed or late payments, or a propensity for relatively high credit usage rates.
Lenders see people with scores like yours as solid business prospects. With a good credit score, most lenders will give credit to borrowers; however, they might not give their best interest rates, and card issuers might not give you their most alluring rewards and loyalty bonuses.
Maintaining your Good credit score
You fall firmly into the middle class of American consumer credit profiles with your 690 credit score, but with a little more time and work, you can move your score up into the Very Good (740–799) or even Exceptional (800–850) range. Avoid actions that can reduce your credit score in order to maintain your progress and not fall behind.
Factors that affect your credit score include:
Payment history. Delinquent accounts and late or missed payments can harm your credit score. A history of paying your bills on time will help your credit score. It’s quite simple and the single factor that has the biggest impact on your credit score, making up as much as 30.5 percent of your FICO%C2%AE%20Score.
Credit usage rate. Add up the balances on all of your revolving credit accounts (credit cards, for example) and divide the total by your credit limit to find your credit utilization ratio. For example, if your credit utilization rate is 2040% and you owe $4,000 on your credit cards with a $10,000 total credit limit. You are probably aware that your credit score will decline if you push your utilization ratio beyond the limit and into 20100%, but you might not be aware that the majority of experts advise maintaining this ratio below 200% to prevent your credit scores from falling. Credit usage is responsible for about 30% of your FICO® Score.
Length of credit history. Credit scores generally benefit from longer credit histories. There’s not much that recently opened credit can do about it other than to stay away from bad habits and try to build a history of prompt payments and wise credit decisions. Length of credit history can constitute up to 15% of your FICO® Score.
Total debt and credit. Credit scores reflect your total amount of outstanding debt you have, and the types of credit you use. The FICO® Score tends to favor a variety of credit, including both installment loans (i. e. , fixed-rate loans (like mortgages and auto loans) with predetermined payback periods, and revolving credit (i.e. e. accounts (like credit cards, which allow you to borrow money up to a certain credit limit and pay it back with variable payments) Credit mix can influence up to 10% of your FICO® Score.
Recent applications. A hard inquiry occurs when you apply for a loan or credit card; during this process, the lender requests your credit score and, frequently, your credit report. A hard inquiry typically has a short-term negative effect on your credit score. Hard inquiries usually have a short-term negative impact on your credit score, provided you continue to make your payments on time. (Checking your own credit is a soft inquiry and does not impact your credit score. ) Recent credit activity can account for up to 10% of your FICO® Score.
How Much of a Home Loan Can I Get with a 650 Credit Score
FAQ
How much of a loan can I get with a 686 credit score?
Can I get a loan with 686 credit score?
How much of a personal loan can I get with a 680 credit score?
|
Lender
|
Loan Amounts
|
Credit Score Requirement
|
|
SoFi
|
$5,000 – $100,000
|
680
|
|
Wells Fargo
|
$3,000 – $100,000
|
660
|
|
USAA
|
$1,000 – $100,000
|
Not disclosed
|
|
Discover
|
$2,500 – $40,000
|
660
|
What credit score do I need for a $3000 loan?
What credit score do you need for a personal loan?
Credit score requirements for personal loans vary across lenders. Many give preference to borrowers with good or excellent credit scores (690 and above), but some lenders accept borrowers with bad credit (a score below 630). The typical minimum credit score to qualify for a personal loan is 560 to 660, according to lenders surveyed by NerdWallet.
Can you get a home loan with a good credit score?
Applicants with fair credit scores — generally from 630 to 689 — may have a harder time qualifying for a loan than those with good or excellent credit. But it’s still possible. Many lenders consider additional factors on an application, such as employment, whether you rent or own your home, income and outstanding debts.
What are average personal loan rates by credit score?
Here are average personal loan rates by credit score: 720-850. 690-719. 630-689. 18.69%. 300-629. 21.74%. Source: Average rates are based on aggregate, anonymized offer data from users who pre-qualified through NerdWallet from March 1, 2024, through March 31, 2024. Rates are estimates only and not specific to any lender.