is 668 credit score good

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A 668 credit score places you in the fair range as per the FICO model. This could statistically increase your chances of becoming delinquent in the future! Most lenders avoid those odds, and if they extend credit to borrowers with a 668-credit score, they do so at high-interest rates and fees.

According to the FICO model, a good credit score ranges from 670-739. Though not most lenders cup of tea, borrowers with a 668-credit are likely to become financially stable in the future. Most lenders hesitate to work with individuals with a 668-credit score is 668, fearing they may not be financially stable to pay debts.

668 credit score comes under fair credit score
Source: Experian

Don’t be scared if you have this credit score range; this article will help you know the factors affecting your credit score and how you can improve them.

What Constitutes a Credit Score?

Your credit score is dictated by debt management history, as seen in your credit file. The score shows potential lenders how you have bill payment and credit. Erratic and poor credit habits will negatively affect your score, while good borrowing habits will raise your credit scores.

We breakdown factors influencing your 668 credit Score as follows:

1. Public Information

Your credit report contains public records and information about your credit history. If your public credit record has a bankruptcy, it can immensely lower your credit score; thus, affecting your access to future credit.

2. Payment history

Most lenders are hesitant to work with individuals with delinquent accounts or accounts with a record of late payments. Payment history is the most important factor in credit score, accounting for 35% of the score. This shows the value of building a good bill payment history.

3. Credit Usage Rate

Your FICO score is determined by how well you utilize credit. Most lenders encourage their clients to keep their utilization ratio below 30% to avoid lowering their credit scores. You can know your credit utilization ratio by adding up all the balances on your credit accounts and dividing the result by your total credit limit.

4. Length of Credit History

A longer credit history reflects well on your credit score. Although creating a long history takes time, new credit users do well to avoid bad credit habits by paying their debts on time to help them establish a good track record. You should strive hard to make good credit decisions since the length of your credit history constitutes 15% of your FICO score.

5. Total Debt and Credit

Most creditors check your credit score to determine your outstanding debt and the types of credit you have. A 668-credit score is likely to land you a mixed credit since it influences up to 10% of your FICO score.

You could have access to installment loans (mortgage and car loans) and revolving credit (credit cards), which, when paid promptly, can reflect well on your credit score.

6. Recent Application

If you make a recent credit application, it often accounts for up to 10% of your FICO score. It is standard practice for lenders to request a borrower’s credit report to confirm their credit score when applying for a credit facility like a mortgage or a credit. This process is called a hard inquiry.

Frequent hard inquiries can negatively affect your credit score. However, if you regularly pay your debts on time, the hard inquiry will negatively impact your credit score.

How to Improve your 668 Credit Score

Although it’s impossible to change your 668-credit score overnight, allowing time to pass can help you repair the negative effects that contributed to you having such a score. With lots of patience, you can work steadily to improve how you handle credit, thus upgrading your credit score to a better range.

1. Get a Secured Credit Card

Since your credit score is still in the fair range, getting a secured credit card would be wise. A secured credit card is protected by a cash deposit which is the credit limit for your credit card.

Most creditors are reluctant to work with subprime borrowers. Still, a secured credit card allows them to take the risk since the deposit made on the account acts as collateral if the cardholder delays payments.

Every time you use the card and make prompt payments, your creditor reports your activity to the national credit bureaus, which record your credit files for future use. That being the case, ensure always to make timely payments and avoid maxing out the card to improve your credit score.

2. Consider a Credit-Builder Loan

Various credit unions offer these loans to improve a borrower’s credit history. The credit union often places the borrowed money in a savings account, earning interest that the borrower can access upon successfully paying the loan in full.

Although the union uses this method to save, they often report your payments to national credit bureaus. Consequently, the best way to improve your 668-credit score is to ensure that you make payments on time to have a good credit report.

3. Consider a Debt-Management Plan

As the world faces hard economic times due to the Covid-19 Pandemic, keeping up with debts payments can get challenging. Therefore, get a qualified credit counseling agency to help you set up a realistic debt management plan (DMP and negotiate with your creditors for a workable repayment plan. Your goal is to build your credit report steadily to enhance your 668 credit score.

4. Pay your Bills on Time

If you need to avoid something at all costs, it is missed and late payments since they often lower your credit score. You can take advantage of automated tools, calendar alarms, sticky notes, and automatic payments to help you remember your payment due date. Most lenders want to work with borrowers who pay responsibly and on time to improve their credit scores.

5. Avoid High Credit Utilization

FICO scores determine your credit score by calculating the percentage of your credit limit that you are using. When you keep your credit card utilization under 30%, you are more likely to improve your credit score and qualify for credit.

If lenders discover that you have a high credit utilization rate, they are reluctant to lend you money because it indicates you will have problems paying your bills on time. So, go slow on the loan application; borrow friends instead.

Final Thought

Is a 668-credit score good? It falls in the fair range, meaning you may not qualify for some credit facilities, especially skeptical lenders. Some creditors may lend credit to you but at a higher interest rate and fees.

Nevertheless, you can improve your credit habits to help you raise your FICO score from fair to good or even to excellent. It takes time and discipline to see your credit score go up; therefore, be patient and work towards improving it.

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I am full-time financial writer working with various institutions around the globe. With years of experience writing editorial pieces for Business Daily, a publication of Nation Media Group Kenya, I deliver insightful pieces for start-ups and established businesses. I have a degree in commerce and accounting from Kenyatta University, with decades of experience in writing educative and unbiased articles on finance, business, and health. I am currently living in Nairobi, Kenya with my wife and baby girl.

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