What Does It Mean If Your Credit Score Is 696?

Your credit score is one of the most important numbers in your financial life. Lenders use credit scores to evaluate how risky it is to lend money to you—whether for a credit card, car loan, mortgage, or other type of credit. Specifically, a credit score of 696 falls in the “good” credit range. But what does that mean for your finances and access to credit? Let’s take a closer look.

Before we dive into the specifics of a 696 credit score let’s review what credit scores are and how they work.

Your credit score is a three-digit number that gives lenders a snapshot of your creditworthiness. The most widely used credit scores are FICO scores, which range from 300 to 850 The higher your score, the lower the risk you pose to lenders.

Credit scores are calculated based on the information in your credit reports from the three major credit bureaus (Experian, Equifax, and TransUnion). Key factors that influence your score include:

• Payment history – Whether you pay your bills on time. This makes up 35% of your FICO score.

• Credit utilization – The ratio of credit you’re using compared to your total available credit. This accounts for 30% of your score.

• Length of credit history – How long you’ve had credit. This is 15% of your score.

• Credit mix refers to the different kinds of credit accounts you have, like home loans, credit cards, and so on. This is 10% of your score.

• New credit applications – Credit inquiries and new accounts opened. This makes up 10% of your FICO score.

Your credit scores can fluctuate as these factors change over time. Checking your credit scores regularly allows you to monitor your credit health. Many credit cards and personal finance sites like Credit Karma allow you to access your credit scores for free.

What a 696 Credit Score Means

A 696 credit score is considered “good” by FICO standards. Here’s a breakdown of the credit score ranges:

• 800-850: Exceptional
• 740-799: Very Good
• 670-739: Good
• 580-669: Fair
• 300-579: Bad

As you can see, a score of 696 puts you on the lower end of the good credit range. 21% of consumers have credit scores between 670 and 739, so a 696 score is fairly common.

The Positives of a 696 Credit Score

The good news is that a 696 credit score makes you an acceptable borrower in the eyes of most lenders. With a good score, you should be able to qualify for:

• Credit cards, likely with reasonable interest rates
• Personal loans and lines of credit
• Auto loans, though probably not the very best rates
• Mortgages, though your interest rate may be higher than with excellent credit

You’ll have access to more credit products than if you had fair, poor, or bad credit. Lenders see you as an acceptable risk.

Potential Downsides of a 696 Score

While lenders will likely approve you, a 696 credit score isn’t high enough to get you the very best terms on credit and loans. Here are some potential drawbacks:

• You may not qualify for the lowest interest rates
• Credit card issuers may offer you lower credit limits
• You may not get approved for top rewards credit cards
• You could get rejected from credit products or loans that require excellent credit

In other words, while you can access credit, you won’t get the absolute best rates and terms available. You’re still considered riskier than consumers with very good or exceptional credit.

What a 696 Credit Score Means for Loan Approval

Here’s a look at how a 696 credit score could impact your chances of getting approved for different types of credit and loans:

Credit Cards

A 696 FICO score makes approval likely for most credit cards. You can probably qualify for rewards cards and even cards for good credit from major issuers like Chase and American Express. However, your credit limit may be lower than with excellent scores. And you may not qualify for the most premium cards with lucrative rewards and benefits.

Personal Loans

Your 696 credit score makes approval very possible for a personal loan. Most online lenders will lend to you with a score in this range. However, you’ll likely pay a higher interest rate than borrowers with excellent credit. So shop around for the best rate. Avoid payday loans or loans with excessive fees.

Mortgages

FHA loans only require a minimum credit score of 580. But for conventional mortgages, a 696 credit score may not be high enough for the very lowest rates and terms. Different lenders have varying credit requirements, so shop around. Improving your score before applying could help your chances.

Auto Loans

You can probably qualify for an auto loan with your 696 credit score. But you may not get approved for 0% financing offers or the very best rates. Shopping around among lenders and having a good down payment will help your chances.

How to Improve a 696 Credit Score

While a 696 credit score provides access to credit, there’s room for improvement. Here are some tips to raise your score over time:

• Pay all bills on time. Payment history is the biggest factor in your scores. Set up autopay or reminders to avoid late payments.

• Lower credit utilization. Try to keep balances low on credit cards and loans. Experts recommend using less than 30% of your total available credit.

• Monitor your credit. Keep tabs on your credit reports and FICO scores so you can address any errors or downward trends quickly.

• Limit new credit applications. Too many new accounts and hard inquiries can lower your score temporarily. Apply conservatively.

• Ask for credit limit increases. Higher limits help lower your overall credit utilization. Just don’t spend more as a result.

• Build credit history. Letting accounts age and making timely payments over many years will boost your scores. Be patient.

With diligent credit management over time, you can achieve very good or exceptional credit. That will qualify you for the top rates from lenders when you need financing.

The Takeaway

A credit score of 696 is considered good by FICO standards. It shows lenders you are an acceptable borrower and opens doors to more credit than bad or fair scores. However, a 696 score likely won’t get you the absolute lowest rates or most rewards. With responsible credit habits over time, you can improve your score and unlock better loan terms. Monitoring your credit is key so you can catch any downward trends early.

Overall, a 696 credit score puts you in a reasonably good place when it comes to access to financing. But maximizing your scores can potentially save you thousands on interest costs over your lifetime. Know where you stand by checking your latest scores. Then implement healthy credit habits to build an exceptional score over time.