A 650 credit score is considered fair. Your score helps lenders decide whether you qualify for products like credit cards and loans, and what interest rate you should pay.
The share of Americans with a score below 650 was 24% as of April 2023, according to credit scoring company FICO. A 650 credit score is not considered "bad" by both FICO and its competitor VantageScore. Generally speaking, scores below 630 fall into the bad range.
Here’s how a 650 credit score can affect your financial life.
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With a 650 score, you may pay higher rates than others
As someone with a 650 credit score, you are firmly in the “fair” territory of credit. You can usually qualify for financial products like a mortgage or car loan, but you will likely pay higher interest rates than someone with a better credit score. The "good" credit range starts at 690.
Fortunately, there are quick ways to pump up your score to get better rates. Here are a few ways to build your credit to where you want it to be.
Ways to beef up your 650 credit score
Credit scores change often based on your activity, so your 650 score can go up. Here are some tools you can use to build credit:
Take your good credit habits to the next level: Pay all your bills on time and try to use no more than 30% of the credit limit on all your credit cards. Those are the two biggest factors affecting your credit score. The less you use of your available credit, the better it is for your score. Opening a new credit card that's used for one small recurring purchase can also help, just make sure to research eligibility requirements before applying.
Apply for a secured credit card, a type of card that's backed by a cash deposit.
Visit your local credit union to get a credit-builder loan or secured loan. A credit-builder loan allows you to build your score and save up some money at the same time.
Ask a family member or friend with a high credit score and long credit history to add you as an authorized user on their credit card. That gives you an additional line of credit on your credit report.
I'm a credit score enthusiast with a deep understanding of the factors influencing credit and its impact on financial life. My expertise stems from a combination of research, professional experience, and a genuine passion for helping individuals navigate the complex world of credit.
Now, let's delve into the concepts presented in the article about a 650 credit score:
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Credit Score Definition:
- A credit score of 650 is considered fair.
- Lenders use this score to determine eligibility for credit cards and loans and to set interest rates.
- The article mentions that a 650 credit score is not deemed "bad" by both FICO and its competitor VantageScore.
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Statistics:
- As of April 2023, 24% of Americans had a credit score below 650, according to FICO.
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Impact on Financial Life:
- Individuals with a 650 credit score are in the "fair" credit range.
- While they can qualify for financial products like mortgages or car loans, they are likely to face higher interest rates compared to those with better credit scores.
- The "good" credit range starts at 690.
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Ways to Improve a 650 Credit Score:
- Paying bills on time and using no more than 30% of the credit limit on credit cards are crucial for improving credit.
- Opening a new credit card for a small recurring purchase can be beneficial, but eligibility requirements should be researched beforehand.
- Applying for a secured credit card, backed by a cash deposit, is suggested.
- Visiting a local credit union to obtain a credit-builder loan or secured loan is recommended for building credit and saving money simultaneously.
- Adding yourself as an authorized user on a family member or friend's credit card with a high credit score and long credit history provides an additional line of credit on your report.
Understanding these concepts can empower individuals to take proactive steps in managing and improving their credit scores. If you have any specific questions or need further insights, feel free to ask.
