Most people first learn about credit scores when looking to take out a loan or open up a line of credit. A 695 credit score may be an ideal place to land, but it depends on the person’s specific situation.
Generally speaking, 695 is a good credit score. It’s right in the middle of the Fair Credit range (640-699), so lenders generally accept it. Those with 695 credit scores will likely be approved for new credit and receive competitive interest rates on loans.
Nonetheless, there are always scenarios where the rules don’t apply — those with higher scores often get offered better terms. People with a 695 score may find that they cannot get approved for the best credit cards or loans with the lowest interest rates.
What Can You Do With a 695 Credit Score?
With a 695 credit score, you can qualify for many financial products and services. You can take out a loan for a car, get approved for a mortgage, or open up a new line of credit with attractive terms.
You should be able to find quality credit cards that offer good rewards programs and features like cash back or points. Depending on the lender, you may even qualify for low-interest rates and other favorable terms on certain loans.
Things That Can Impact Your Score
Several factors can influence your credit score. Think about your payment history, the amount of debt you owe, the types of credit accounts and loans, new credit accounts, and the length of your credit history.
Paying bills on time is one of the biggest influences on your score. Even a single late payment could drop by more than 100 points, depending on your other factors. Your payment history has a staggering 35% influence on your score.
How much debt you owe, also known as your credit utilization, is the second most influential factor, with a 30% influence. Try to keep your debt-to-credit ratio at around 30%. This means if you have a $1,000 credit limit, try to keep your balance below $300.
New credit accounts refer to recently opened lines of credit. These can have a 10% influence on your score. Try to limit the number of new accounts you open in a short period.
The length of your credit history also matters. The longer your record, the more influence it has on your score. This factor affects up to 15% of your score.
Lastly, your credit mix refers to the mix of different credit types you have, such as credit cards, student loans, and car loans. This has a 10% influence on your score. Try to have various credit accounts and loans to help you build your history.
Other Reasons To Aim for a Better Credit Score
Think you only need a good credit score to land better loan deals and interest rates? Then think again. Your credit score can influence other parts of your life, too.
For one, many employers now check credit histories as part of their background checks. A low score could affect your chances of getting hired for a job.
Your credit score can also influence what type of rent you can get. Many landlords check credit histories before deciding to approve the tenant.
Even insurance companies check credit scores when setting rates. Having a higher score could mean lower premiums.
Improving a 695 Credit Score
If you have a 695 credit score, here’s how to improve your chances of approval and better terms.
Keep Your Payments up to Date
This is the single most important factor affecting your score. Late payments will significantly lower it while making your bill payments on time every month can help you increase your score.
Set up automatic bill payments so you never miss a due date. This will help ensure your bills are paid on time, and you won’t have to worry about it.
Manage Your Debt
Your debt-to-credit ratio is another significant factor influencing your score. Keep an eye on your balances, especially when multiple credit accounts are open. Pay off or transfer any high balances to help keep your ratio low.
You should also consider paying down or consolidating any outstanding debt. This can lower your overall debt-to-credit ratio and improve your score.
Be Mindful of How Much Debt You’re Carrying
Your total debt can influence your score, even if it is spread across multiple accounts. Try to keep your overall debt low and pay off any balances as soon as possible.
Check for Errors
It’s also important to check your credit report for any inaccuracies. Errors can hurt your score. Report these as soon as possible.
Final Thoughts
This shows that having a high credit score can impact not only your financial life but your personal life as well. Aiming to have a 695 credit score or higher can put you in a better position in many aspects of life. Taking the time to focus on your credit score can be well worth it in the end.
