Your credit score is an important factor in determining your financial health. It is a numerical representation of your creditworthiness and reflects how likely you are to repay your debts.
For busy moms juggling multiple responsibilities, understanding your credit score can feel overwhelming, but it’s crucial for your financial journey.
A credit score of 678 falls in the fair to good range, but whether it is considered good or bad depends on your financial goals and the lending criteria of lenders you are seeking credit from.
Let’s break it down in a way that makes sense for you as a mom navigating finances.
In this blog, we will discuss what a credit score of 678 means, factors that affect your credit score, and how it can impact your ability to obtain credit.
Is 678 A Good Credit Score?
When it comes to the question of whether 678 is a good credit score, the short answer is: it depends. On the one hand, according to the thresholds set by credit bureaus like Equifax and Experian, 678 is considered a good credit score.
But let’s face it—life as a mom means you often have to think about what’s best for your family’s future.
However, a 678 credit score is still lower than the national average credit score of 698.
This could affect your plans for big purchases, like a new family car or a home.
Additionally, it really depends on the credit and the type of credit you’re applying for. Some lenders may find a credit score of 678 to be high enough to qualify for a loan or credit card, while others would decline your application.
What Is A Good Credit Score?
Let’s back up a few steps and talk about what really makes a good credit score. First, credit scores range from 300 to 850, with 300 being the worst possible score and 850 being the best. Generally speaking, credit scores fall into the following categories:
- 300-579: Poor
- 580-669: Fair
- 670-739: Good
- 740-799: Very Good
- 800-850: Excellent
Best Websites To Check And Build Your Credit Score
Factors That Affect Your Credit Score
There are many factors that can affect your credit score, but they each fall into five different categories:
1) Payment history (35%)
The most important factor that affects your credit score is your payment history. Moms, this is where your on-time payments shine!
Each month, your creditors report to the three credit bureaus when you make your monthly payments. A history of on-time payments can boost your credit score, while late or missed payments can harm your credit score. Additionally, the longer your positive payment history is, the better it is for your credit score.
2) Credit utilization (30%)
Your credit utilization is the percentage of your revolving credit that you’re currently using. Aim for that 30% or lower—every little bit helps!
For example, if you have a credit limit of $1,000 and a $500 balance, you have a 50% credit utilization ratio. The lower your credit utilization, the better. Lenders generally like to see a utilization of 30% or lower.
3) Credit history length (15%)
Another important factor that affects your credit score is the length of your credit history. The longer your history, the better!
Credit bureaus look at your average credit length, the length or your oldest credit account, and the age of your newest credit account. The longer your credit history length, the better it is for your score.
4) Credit mix (10%)
Your credit mix refers to the different types of accounts on your credit report. A healthy mix can give your score a nice boost!
Having a diverse mix of credit types on your report can help boost your credit score. That’s not to say you need one of every type of credit on your report, but having at least a few different types can help. New credit (10%): When you apply for new credit, it appears on your credit report as a hard inquiry. Applying for too much credit in too short a time can be a bad sign to lenders and make you look like a riskier borrower.
5) New credit (10%)
When you apply for new credit, it appears on your credit report as a hard inquiry. Be mindful of applying for too many cards at once!
Applying for too much credit in too short a time can be a bad sign to lenders and make you look like a riskier borrower.
What Can I Do With A 678 Credit Score?
Do you have a credit score of 678 and are wondering what you can do with it? The good news is you have plenty of options, and there’s a good chance you can qualify for the type of credit you need.
Let’s start by talking about the biggest loan that most people apply for in their lives: their mortgage. To qualify for a conventional loan, you must have a credit score of at least 620. Of course, some lenders may require higher credit scores, but 678 definitely meets (or rather, exceeds) the requirements.
A 678 credit score is also enough to qualify for other types of loans, including auto loans and personal loans. Just remember, every lender has different standards, so it’s worth shopping around! While these loans don’t necessarily have a universal minimum requirement like mortgages do, you’ll still generally need at least a fair or good score to qualify.
Finally, there are plenty of credit cards you can qualify for with a 678 credit score. You might miss out on the premium options, but there are still solid choices out there. But it’s worth noting that, while you may qualify for many basic or rewards credit cards, you probably won’t qualify for most of the premium credit cards on the market. Those cards — which offer higher rewards or sign-up bonuses than your standard credit card — usually require excellent credit.
It’s worth noting that just because you qualify for a loan or credit card with a 678 doesn’t necessarily mean you’ll have access to the best interest rates. Generally speaking, the best interest rates are available to those borrowers with credit scores of 740 or higher. As a result, a credit score of 678 will probably result in you paying a bit more over the course of your loan.
How To Improve A 678 Credit Score?
If you’re not happy with your 678 credit score or want to boost it so you can get a better interest rate on a loan, we have good news: there are many steps you can take to boost your credit score. Here are just a few options:
- Pay your bills on time: The simplest way to boost your credit score is to pay your bills and debt payments on time each month. Over time, your positive credit report will grow and you’ll slowly boost your credit score.
- Pay off any past-due bills: Having past-due bills or debts in collections can hurt your credit score and prevent it from growing. When you pay off your debt, the late payments will remain on your credit score for a while, but you’ll get a boost from having them show as paid.
- Pay off debt: As we mentioned, your credit utilization is one of the most important factors that affect your credit score. One of the easiest ways to reduce your credit utilization — and, therefore, increase your credit score — is to pay down your revolving debt.
- Increase your credit limits: Your credit limit is the other piece of the credit utilization puzzle. In addition to paying off debt, you can also improve your credit utilization by calling your credit card companies and asking them to increase your credit limits.
- Dispute inaccurate information on your credit report: Having an inaccurate note on your credit report — especially a negative one — can erroneously keep your credit score low. Check your credit report to make sure there’s no false information. And if there is, dispute it with the credit bureaus.
- Open a new credit account: It may sound counterintuitive to open a new account to boost your credit score. But sometimes, the problem is that your credit history is simply too thin. You may be able to boost it over time by opening a new credit card. With a 678 credit score, you should be able to qualify for a normal credit card. But if not, you can start with a secured credit card.
Key Things To Know About A 678 Credit Score
It falls in the fair to good range: A credit score of 678 falls within the range of 670-739, which is considered fair to good. While it is not a bad credit score, it may limit your ability to obtain credit at favorable terms.
It can affect your ability to get approved for credit: Lenders use credit scores to assess the risk of lending money to borrowers. A credit score of 678 may not meet the minimum credit score requirements of some lenders, which can limit your ability to obtain credit or lead to higher interest rates and fees.
It is affected by various factors: Your credit score is influenced by several factors, including your payment history, credit utilization, length of credit history, types of credit, and new credit inquiries. Understanding these factors can help you improve your credit score over time.
It may impact your insurance premiums: Insurance companies may use credit scores to determine insurance premiums for auto, home, and life insurance. A lower credit score can lead to higher premiums.
It is important to monitor and improve: Your credit score can have a significant impact on your financial health. It is essential to monitor your credit report regularly for errors and take steps to improve your credit score over time, such as making timely payments, reducing your credit utilization, and avoiding new credit inquiries.
What Does A 678 Credit Score Get You?
A credit score of 678 can qualify you for various credit products, but the terms and interest rates offered may not be as favorable as those offered to borrowers with higher credit scores. Here are some examples of what a 678 credit score may get you:
(1) Credit Cards: With a credit score of 678, you may qualify for credit cards with moderate credit limits and standard interest rates. However, you may not be eligible for credit cards with rewards or low-interest rates.
(2) Personal Loans: You may qualify for personal loans from lenders, but interest rates and fees may be higher compared to borrowers with excellent credit scores.
(3) Auto Loans: You may qualify for auto loans with moderate interest rates, but the loan terms may not be as favorable as those offered to borrowers with higher credit scores.
(4) Mortgages: With a credit score of 678, you may qualify for a mortgage, but the interest rates may be higher, and you may be required to make a larger down payment.
(5) Insurance: Insurance companies may consider a credit score of 678 as average or fair, which may result in higher premiums for auto, home, or life insurance.
Conclusion
In conclusion, For moms looking to secure their family’s financial future, understanding and improving this score is key!
A credit score of 678 is generally considered fair to good and falls within the average range of credit scores in the United States. However, whether it is considered good or bad depends on various factors, such as the lending criteria of lenders and your financial goals. If you are looking to improve your credit score, there are several steps you can take, including making timely payments, reducing your credit utilization, and monitoring your credit report for errors. Overall, having a credit score of 678 may not necessarily prevent you from obtaining credit, but it is important to work on improving it to increase your chances of getting better terms and rates on loans and credit products.
