Is 650 a Good Credit Score?

Although you are typically regarded as a subprime consumer if your credit score is 650, this won’t always stop you from borrowing money. As of 2021, the average FICO credit score in the US is 714; scores between 580 and 669 are regarded as “fair” credit scores.

This post will explain what your 650 credit score indicates, whether you can get a particular kind of loan, and what you can do to raise your credit score.

Navigating the World of Credit Scores: A Comprehensive Guide for the 650-Range

So, you’ve checked your credit score and it’s sitting at 650. Now what? Is that a good score, a bad score, or somewhere in between?

The Short Answer:

A 650 credit score falls within the “fair” range, according to both Experian and Upstart. While not considered excellent it’s not terrible either. It’s a solid foundation to build upon and with some effort, you can boost it into the good or even excellent range.

The Long Answer:

Understanding Credit Scores:

Before diving into the specifics of a 650 score, let’s take a step back and understand what credit scores are and why they matter.

Your credit score is a numerical representation of your creditworthiness, based on your financial history. It’s like a report card for your financial behavior, reflecting how responsibly you manage debt and payments. Lenders use this score to assess your credit risk and determine whether to approve you for loans and credit cards, and at what interest rates.

The Credit Score Spectrum:

Credit scores range from 300 to 850, with higher scores indicating better creditworthiness. The general breakdown is as follows:

300-579: Poor
580-669: Fair
670-739: Good
740-850: Excellent

Decoding Your 650 Score:

With a 650 score, you’re considered a subprime borrower. In comparison to borrowers with higher scores, this implies that you’ll probably have to deal with stricter lending terms and higher interest rates. However, it doesn’t mean you’re completely shut out of the financial world.

Loan Options with a 650 Score:

Mortgages:

You can qualify for an FHA loan with a 3.5% down payment.
Conventional mortgages are also possible, but with higher interest rates and stricter requirements.

Auto Loans:

Expect higher interest rates compared to borrowers with good or excellent credit.

Personal Loans:

You’ll likely qualify, but again, interest rates will be higher than those offered to borrowers with better credit.

Credit Cards:

You might qualify for basic credit cards or store cards, but premium cards with rewards and perks will likely be out of reach.

Boosting Your Credit Score:

The good news is that your credit score isn’t set in stone. You can actively improve it by taking the following steps:

Pay bills on time: This is the single most impactful factor affecting your score.
Reduce credit utilization: Aim to keep your credit card balances below 30% of your credit limit.
Check for errors: Your credit reports might contain inaccurate information, so review them regularly and dispute any errors.
Build positive credit history: Open a secured credit card or become an authorized user on a responsible family member’s account.

Remember: Improving your credit score takes time and effort. Be patient, consistent, and financially responsible, and you’ll see your score climb steadily.

Additional Resources:

Experian’s Credit Education Center: https://www.experian.com/blogs/ask-experian/
Upstart’s Credit Score Guide: https://www.upstart.com/credit-score/
NerdWallet’s Credit Score Guide: https://www.nerdwallet.com/article/finance/credit-score

Final Thoughts:

A 650 credit score is a starting point, not a dead end. By understanding your score, its impact on your financial life, and the steps you can take to improve it, you can unlock better loan terms, lower interest rates, and a brighter financial future.

What does an 650 credit score mean?

As mentioned, credit scores within the 580-669 range are considered to be fair credit. Even though your credit score is below average, it isn’t considered “bad credit,” so you shouldn’t be prevented from applying for certain loans because of it.

With your 650 credit score, lenders will generally consider you to be a higher-risk borrower. This implies that in order to have your loan approved, you’ll probably need to meet strict requirements regarding your employment, income, and other debts. Additionally, your loan interest rate will probably be higher than that of borrowers with excellent credit.

Can I get a mortgage with an 650 credit score?

Yes, your 650 credit score can qualify you for a mortgage. And you have a couple of main options.

If your credit score is 580 or higher, you can get an FHA loan with just a 3 percent down payment to purchase a home. 5%. Although these Federal Housing Administration-guaranteed loans have drawbacks (like the need for FHA mortgage insurance), they can be a fantastic choice for people who wish to buy a home.

To get a conventional mortgage, the minimum credit score requirement is 620 per Fannie Mae’s lending standards. However, a credit score on the lower end of the spectrum comes with certain caveats. For instance, in order to obtain a conventional loan with a percentage of 20620, you will need to have a maximum debt-to-income ratio of 2036% and be ready to make a down payment of 2025%. You can obtain a conventional loan with as little as 5% down payment (or even 3% in certain cases), but the minimum credit score needed to qualify for this loan is 660 based on the most recent Fannie Mae underwriting guidelines.

Is a credit score of 650 good?

FAQ

What can a 650 credit score get you?

Type of Credit	Do You Qualify?
Store Credit Card	YES
Unsecured Credit Card with No Annual Fee	YES
Unsecured Credit Card with Rewards	YES
Home Loan	YES

Can I get a house with a 650 credit score?

The major credit bureaus have different credit scoring categories, and a good credit score is between 670 and 739. A 650 is on the high end of the fair credit score category, which ranges from 580 to 669. A 650 credit score will help you qualify for most home loans, but you may end up with a higher interest rate.

Is 650 a good credit score to buy a car?

Is 650 a good credit score to buy a car? It’s possible to get approved for a car loan with a 650 credit score. If you are approved for a car loan, having a lower credit score may mean you’re offered less favorable loan terms, like a higher interest rate.