686 Credit Score: Is It 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.

A 686 CIBIL score in India is generally viewed as a fair to moderately good credit rating, falling just above the fair range (580-669) and approaching the good category (670-739). Lenders typically consider this score as a sign of reasonable credit responsibility, though some risk remains. It reflects consistent but not flawless credit management, indicating potential for better terms with improvement. While many banks and financial institutions are willing to extend credit at this level, interest rates may be higher and credit limits lower. This is as compared to those offered to borrowers with scores above 700. 

 

Therefore, a 686 score provides access to credit but may limit eligibility for premium products and optimal loan conditions.

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

A 686 CIBIL score is generally classified as fair in India. While it’s not in the high or “excellent” category, this score is sufficient for many lenders, especially NBFCs and digital lending platforms, to consider your personal loan application. Traditional banks may use stricter eligibility standards, potentially offering smaller loan amounts or attaching higher interest rates, but approval is still possible if you demonstrate overall financial stability. 

 

Factors such as consistent income, length of employment, and clean repayment record play a significant role in influencing your loan terms. Enhancing your application with supporting documentation or other reassurances can help unlock more favourable rates and improve your chances of approval.

Tips to Improve Loan Approval Chances

Here are proven approaches that can help strengthen your financial profile and secure more favourable loan terms, despite a credit score in a lower range:

• Add a co-applicant: Partnering with a co-borrower who has a solid credit profile or reliable income can enhance your combined eligibility. Lenders see shared responsibility as a lower risk, which may increase your approved loan amount and help secure more attractive terms.

• Provide collateral: Securing your loan against assets like a fixed deposit, gold, or property reduces the lender’s risk. This can drive down interest rates and improve your approval odds, even with a mid-range credit score.

• Present strong income documentation: Submitting proof of stable monthly income, such as salary slips, tax returns, and employment letters, assures lenders of your repayment capability. Demonstrating financial consistency and employment stability creates confidence in your ability to manage loan repayments responsibly.

• Make timely payments on existing credit: Maintaining a perfect repayment record across all current loans and credit cards signals reliability and improves your creditworthiness in the eyes of lenders. Every on-time payment builds trust and can positively influence your loan application outcome.

• Keep credit utilisation low: Using less than 30% of your total available credit limit indicates prudent credit management. Low utilisation demonstrates discipline and increases your eligibility for larger loans or better interest rates.

Obtaining a credit card with a 686 CIBIL score in India is achievable, though your selection may be narrower compared to those with higher scores. Most banks and major card issuers prioritise applicants with scores in the “good” or “excellent” range for unsecured cards. However, individuals with a 686 score can still access credit cards by considering alternative options. Secured cards, as well as cards from regional banks and retailers that specifically serve customers with fair credit, offer accessible avenues. Applying where you already have an established relationship, such as your primary bank, can also boost your likelihood of approval.

Credit Card Types for Fair Scores

Here are the types of credit cards that make it possible to obtain credit even with a fair score, while also helping you establish a strong credit history through responsible usage:

• Secured Credit Cards: These cards require you to place a fixed deposit as collateral, with the credit limit usually based on the deposit amount. Since approval depends more on the deposit than on your credit history, they are an effective way to build or rebuild your CIBIL score through careful use and punctual repayments.

• Low-limit Retail and Store Cards: Offered by retail chains or certain banks, these cards typically feature easier eligibility criteria and modest credit limits. They present a practical option for individuals whose credit scores aren’t yet in the premium range.

• Credit-Builder Cards: Designed for people aiming to improve or establish their credit standing, these cards often offer basic perks and lower limits. Their main focus is on helping you establish a positive credit history, even if that means accepting higher interest rates or fewer benefits.

What to Expect: Limits, Charges & Conditions

With a 686 CIBIL score, your initial credit card experience may include some restrictions, but it’s also an opportunity to prove your financial dependability and set the stage for future upgrades:

• Expect starting credit limits to be lower than those on high-tier cards.

• Annual or membership fees may be higher relative to the card’s features.

• Rewards, cashback, and special perks are likely to be limited or basic.

• Card issuers may closely monitor your payment punctuality and overall usage patterns.

 

Demonstrating responsible use within these terms can help you access better cards and higher limits over time.

How to Improve Eligibility

To maximise your eligibility for a credit card with a 686 score, consider these approaches:

• Apply with familiar banks: Choose banks where you maintain accounts, fixed deposits, or loans, as they may be more willing to approve your application based on your history with them.

• Supply comprehensive income and employment documentation: Submit clear proof of a steady income and long-term employment to reinforce your repayment capability.

• Begin with modest limits: Start with cards offering lower credit limits and ensure consistent, on-time payments to gradually build trust.

• Limit application frequency: Avoid applying for multiple cards within a short period, as excessive credit inquiries can hurt your score and raise concerns for lenders.

A comprehensive CIBIL credit report provides a clear snapshot of your entire credit profile, which is crucial when you have a 686 score. Here are the core sections you’ll find in your report:

Accounts

The accounts section of a CIBIL report lists all your active and closed credit lines, including personal loans, home loans, auto loans, and credit cards. Each account entry details the type of credit, the sanctioned limit, outstanding balance, and the dates the account was opened or closed. 

Repayment History

This section provides a month-by-month record of your payment activity across loans and credit cards over recent years, showing whether payments were made on time, late, or missed. It is a key factor influencing your credit score. 

Credit Inquiries

Credit inquiries record the number and timing of recent requests by lenders or financial institutions to check your credit report, usually triggered by loan or credit card applications. Multiple inquiries within a short timeframe can signal increased credit seeking and may negatively impact your score. 

Credit Utilisation Ratio

The credit utilisation ratio shows the percentage of your total available credit that you are currently using across all credit cards. Keeping this ratio below 30% is widely recognised as a sign of responsible credit use. 

Personal Details

Personal details in the credit report include fundamental identification information such as your full name, date of birth, address, and official identification numbers like PAN or Aadhaar. 

A 686 CIBIL score is generally considered fair, which means while you may not qualify for the most premium loan offers, a variety of loan options remain accessible on Bajaj Markets. However, lenders often apply stricter eligibility criteria, higher interest rates, or reduced loan amounts compared to borrowers with higher scores. Have a closer look at the types of loans that you can obtain:

Home and Auto Loans

With a 686 credit score, you can apply for home and auto loans through Bajaj Markets, though lenders may view this score as moderate risk. This typically results in approvals with higher interest rates and lower loan-to-value (LTV) ratios. Strengthening your application by including a co-borrower with a better credit profile or showing consistent income and employment stability can enhance eligibility and loan terms.

Consumer Loans and Buy Now Pay Later (BNPL)

Consumer durable loans and BNPL options are available to those with a 686 credit score, but expect more stringent documentation requirements and eligibility screening. Lenders may limit loan amounts or require proof of steady income before approval. BNPL services may also restrict the number of transactions or credit limits based on your fair credit score, but select offers remain within reach.

Insurance Premium Financing

Though less common, insurance premium financing may be accessible on Bajaj Markets even with a 686 score. Lenders often scrutinise your credit behavior closely and may offer financing at higher interest rates or ask for additional income proof. Such financing options help you spread insurance premium payments but usually come with more conservative lending terms.

Steadily raising a 686 credit score depends on building reliable financial habits and maintaining disciplined money management. Consider these practical ways to help boost your score:

Stay Composed as Scores Can Be Recitified

A 686 credit score offers a reasonable foundation and can definitely be improved over time. The key is to stay patient and maintain consistent financial habits. By making timely repayments, lowering outstanding balances, and avoiding impulsive credit decisions, you can gradually boost your credit rating.

Monitor Your Progress with No-cost Tools

Take advantage of free credit monitoring platforms and mobile apps to keep an eye on your credit report and score updates regularly. These tools help you identify discrepancies, track your payment behavior, monitor credit utilisation, and observe any recent credit inquiries.

Consult Credit Experts As Necessary

If you’re uncertain about the best strategies to enhance your score, seeking guidance from credit counselors or financial advisors can be beneficial. They can assess your specific credit situation, pinpoint issues like errors or excessive debt, and help effectively raise your creditworthiness.

Pay All Bills on Time

Timely payments for credit card dues, EMIs, and other financial obligations are crucial. Even a single missed payment can negatively affect your score.

Reduce Credit Utilisation

Aim to keep your credit utilisation ratio below 30%. For example, if your total credit limit is ₹1 Lakh, use less than ₹30,000.

Avoid Frequent Credit Applications

Multiple hard inquiries from frequent credit applications can lower your score. Apply for credit only when necessary.

Monitor Your Credit Report Regularly

Review your credit report for inaccuracies or errors. Dispute incorrect entries promptly to avoid unnecessary score reductions.

Pay Down Existing Debts

Systematically reduce outstanding balances to improve your debt-to-income ratio and demonstrate better creditworthiness.

Maintain a Healthy Credit Mix

Having a mix of secured loans (e.g., home loans) and unsecured loans (e.g., personal loans) reflects balanced credit usage and positively impacts your score.

Retain Older Credit Accounts

Long-standing accounts with positive payment histories contribute to your credit age, which is a crucial factor in your credit score.

Avoid Closing Credit Cards

Closing credit cards, especially those with high credit limits, can reduce your overall credit limit and increase your utilisation ratio.

A 686 credit score indicates room for improvement. By adopting responsible financial habits, making timely payments, keeping credit utilisation low, and monitoring your credit report, you can gradually boost your score. Improving a 686 credit score can open the door to better loan terms, lower interest rates, and premium financial products, ensuring greater financial flexibility in the long run.