It is a good idea to understand your 688 credit score in order to keep up with your future financial opportunities. If you ever want to buy a house or a
new car, being smart about your credit score can prove to be highly beneficial.
By focusing on how you can improve your credit score, you may be able to move into the 'Very Good range' (740-799) with a few steps.
On-time paymentsThe first step to keep up your credit score is to make your payments on time. On-time payments account for up to 35% of your credit score which makes it a very substantial portion of your credit score. With a 688 credit score, a late or missed payment can put you at risk of falling into the next range down. Your payment schedule also has the potential to improve your score, so it is crucial you keep up with your due dates.
Credit utilizationYour
credit utilization is another very important aspect of your 688 credit score, making up 30% of your overall score. Credit utilization is a percentage calculated by dividing how much you’ve used of your total available credit lines. For example, if you had a credit availability of $500 and you spent $300, your utilization percentage would be calculated by $300/$500 or 60%.
In order to maintain or improve your score, it is recommended that you keep your utilization at or below 30%.
Length of credit historyThe next aspect of your 688 credit score is how long you have had credit. 15% of your total score is determined by the length of your credit score. A longer credit history is more likely to have a higher score. This shows how you maintain your credit over time including things like timely payments and credit utilization.
New accounts and applicationsIf you open a new account like a credit card or a loan for a car, your 688 credit score will experience an automatic temporary decrease. New accounts and applications account for 10% of your total credit score. It is important to only apply for, and open new accounts that you are sure of. With a 688 credit score, it may be a good idea to wait on opening any new accounts to ensure that you won’t fall into the Fair range.
Types of CreditCredit is either considered revolving credit or an installment loan. Revolving credit has a set limit and a payment schedule that can vary. The most common type of revolving credit is a credit card. An installment loan is a credit line that has a set repayment schedule and fixed payments. A
mortgage and car loans are installment loans. 10% of your credit score comes from having a mixed type of credit. You should aim to have both revolving credit and installment loans in order to have a balances credit score.
Public RecordsLastly, public records contribute to your 688 credit score. While public records do not always show up on credit reports, they still can make you ineligible for some lines of credit. An example of a public record is bankruptcy. A public record shows up on your credit report for 10 years and accounts for 10% of your total score. If you have a 688 credit score, you should be mindful as you’re at risk of falling into the Fair range.