A credit score reflects an individual’s financial reliability and creditworthiness. Lenders use this measure to gauge the potential risk involved with lending money to a person. Essentially, a higher score often equates to lower risk, leading to more favorable lending terms, such as lower interest rates and higher loan amounts.
Credit scores range from 300 to 850, with the following categories often used to describe creditworthiness:
- Excellent: 800 to 850
- Very Good: 740 to 799
- Good: 670 to 739
- Fair: 580 to 669
- Poor: 300 to 579
Erroneous information on a credit report can also significantly affect your credit score. The Phenix Group is one of the best credit repair services to rectify this situation. We adopt a comprehensive approach by engaging with all parties involved–credit reporting agencies, creditors, and third-party collection agencies–to help fix issues with your credit.
What Loans Can You Get with a 690 Score?
A credit score of 690 typically falls in the good-risk category. This score is not bad by any means and can provide access to various loan products.
Mortgages
The minimum credit score needed for most conventional mortgages is around 620. While a credit score of 690 is above this threshold, it might not qualify you for the best interest rates available.
If you’re looking at how to refinance a house with a 690 credit score, it is possible. Taking out a new mortgage to replace your current one might be a good way to secure a lower interest rate or change your loan term.
For individuals with less than stellar credit scores, Federal Housing Administration (FHA) loans could be an option because they often have more lenient credit requirements. They’re government-backed, which makes lenders more willing to loan to people with lower credit scores or who might not otherwise qualify for conventional loans.
If you’re eligible for a conventional loan but don’t have a 20% down payment, you’ll typically have to pay for private mortgage insurance (PMI), which will add to your monthly payment. Lenders will also consider other factors such as income, job stability, and debt-to-income ratio. Make consistent and timely payments, maintain a low credit utilization ratio, and regularly check your credit report for inaccuracies to improve your credit score.
Personal Loans
A credit score of 690 can often qualify you for a personal loan. It can be used for various purposes, such as consolidating debt, making home improvements, or covering unexpected expenses.
Personal loans are typically unsecured, which means that they do not require collateral. The interest rates and loan amounts you’re eligible for depend on the lender. However, you will likely face higher interest rates than those with excellent credit–higher rates mean you’ll pay more interest over the life of the loan.
Stay away from payday loans and high-interest personal loans as much as possible. The exorbitantly high-interest rates and fees can lead to an escalating debt cycle. If you miss payments, this can further negatively impact your credit score.
Auto Loans
With a credit score of 690, you should qualify for an auto loan. However, the interest rates offered may not be the best on the market. Often, less-than-perfect credit scores limit the length of the loan term offered by the lender. Shorter loan terms mean higher monthly payments.
The age and type of vehicle can also impact your loan. Lenders may have stricter criteria for used cars or certain makes and models. Getting pre-approved for a loan can give you a better idea of what rates and terms you qualify for; it also puts you in a stronger position when negotiating a vehicle purchase.
Enhance Your Loan Approval Prospects
Here are a few ways to improve your prospects of getting more favorable loan terms:
Consider a Cosigner
If you’re having trouble getting approved for a loan due to your credit score, you might consider asking a trusted family member with a higher credit score to cosign the loan. Their stronger credit profile could help you get approved and secure a lower interest rate.
Shop Around
Different lenders have different requirements and offer different terms. It pays to shop around and compare loan offerings from multiple lenders before making a decision. Online lenders, credit unions, and traditional banks should all be considered.
Demonstrate a Stable Income
Lenders want to see that you can afford to repay the loan. If you can demonstrate a stable income and a low debt-to-income ratio, lenders may be more willing to approve your application, even with a 690 credit score.
Getting Help to Improve Your Credit Score
Are you striving to raise your credit score but finding the process overwhelming? The Phenix Group specializes in rectifying credit inaccuracies and discrepancies. Our dedicated team understands the system and can help you correct inaccuracies leading to a substantial increase in your credit score.
Worried about identity theft and wondering how to lock your credit? We’ve got your back–take a look at our recent post!