686 Credit Score: Good or Bad?

A 686 credit score is classified as good by some credit bureaus but poor by others, highlighting the variability in how scores are interpreted. While Experian, Equifax, and CRIF High Mark categorise it as good, TransUnion CIBIL views it as poor. This inconsistency underlines the importance of understanding your credit score’s context and how to improve it. A 686 CIBIL score signals the need for improvements to access better financial opportunities.

Here’s how a 686 credit score is categorised across India’s credit bureaus:

A 686 credit score has the following implications:

1. Moderate Loan Approvals

A 686 CIBIL score may lead to loan approvals with higher interest rates or stricter terms, especially with lenders relying on TransUnion CIBIL.

2. Limited Premium Credit Card Access

You might qualify for basic credit cards, but premium options offering cashback, rewards, or travel perks may be out of reach with a 686 credit score

3. Higher Insurance Premiums

Some insurers might consider a 686 CIBIL score when determining your premium, leading to higher costs

4. More Documentation

Lenders may require additional documentation, such as income verification or collateral, to mitigate the perceived risk associated with a 686 credit score

5. Financial Growth Potential

While a 686 credit score signals average financial health, targeted improvements can enhance your creditworthiness significantly

Enhancing a 686 CIBIL score is achievable with consistent efforts and disciplined financial management. 

Here’s how:

1. Pay Bills on Time

Late payments are a major factor in poor credit scores. Ensure all EMIs, credit card bills, and utilities are paid before the due date to maintain your credit score.

2. Monitor Your Credit Report Regularly

Check your credit report for errors or inaccuracies that could affect your CIBIL score. Dispute discrepancies promptly.

3. Keep Credit Utilisation Below 30%

Avoid exceeding 30% of your total credit limit. For instance, if your credit limit is ₹1 Lakh, spend no more than ₹30,000 to maintain a healthy credit utilisation ratio.

4. Avoid Frequent Credit Applications

Multiple credit applications in a short period can lower your 686 credit score. Apply for credit only when necessary.

5. Diversify Your Credit Portfolio

Maintaining a mix of secured (e.g., home loans) and unsecured (e.g., personal loans) credit accounts reflects responsible borrowing and helps improve your 686 CIBIL score

6. Pay Down Existing Debt

Reducing your outstanding debt improves your debt-to-income ratio, positively impacting your 686 credit score

7. Retain Old Accounts

Older accounts with a positive repayment history enhance your credit age, which contributes positively to your 686 CIBIL score

A 686 credit score offers a foundation for financial growth, with its classification ranging from poor to good depending on the bureau. Strengthening your financial habits, including timely payments and low credit utilisation, can significantly improve your 686 CIBIL score. Progressing to higher credit score brackets ensures access to better loan terms, lower interest rates, and premium financial products.