650 Credit Score: Is it Good or Bad?

Irina Tsymbaliuk
650 Credit Score

Do you have a 650 credit score and wonder whether it is enough to get the financial services you want? Your score influences what kind of loan you can get, your chances of approval, your interest rates, and more. According to FICO and VantageScore, 650 falls into a fair range, which means that your choices will be more limited compared to if you were to have a good or excellent score. Still, it largely depends on your lender’s requirements.

Is a 650 credit score good? In this article, you will find out the answer to this question, discover some advantages and disadvantages, and explore tools to improve your creditworthiness.

Сredit Score 650: What It Is and Which Factors Affect It

Сredit Score 650: What It Is and Which Factors Affect It

A credit score, which can range from 300 to 900, serves as a barometer for your creditworthiness. The higher the score, the more trustworthy you appear to lenders.

So, is 650 a good credit score? The answer is quite ambiguous, and it also depends on your lender. Certainly, 650 is not an impressive number that will open all the doors for you, as a good score starts from 690 while an excellent one—from 720. Having a 650 means that you can qualify for numerous financial products (car loan, mortgage, etc.), but you can expect higher interest rates.

Several key factors significantly impact your credit scoring:

  • Your payment history (includes card payments, bills, and any other payments to lenders);
  • Credit mix (refers to a variety of accounts you have);
  • Credit utilization (anything above 30% is considered high credit use);
  • Ages of your open accounts (longer credit history is viewed favorably);
  • New credit (opening a new account triggers a hard inquiry, which can temporarily lower your score).

Your score will be calculated differently depending on the system. Still, all the factors mentioned play a significant role.

Is a 650 Credit Score Good or Bad? Key Pros and Cons

Is a 650 Credit Score Good or Bad?

What can you do with a credit score of 650? It allows you to access numerous financial services. Some of the pros include the following:

  • Access to secured and some unsecured cards;
  • Plenty of lenders consider this score favorable;
  • Possibility to get a mortgage loan;
  • Usually sufficient for apartment renting.

While a credit score 650 has the advantages mentioned above, you should keep in mind that the services you can access will come with some limitations. The cons include:

  • It is impossible to get credit cards with high rewards and cashback;
  • Higher interest rates for loans;
  • Higher auto insurance rates;
  • Higher mortgage rates.

As you can see, you can get numerous types of loans with a credit score of 650, but you have to be prepared that your rates will be higher compared to people with scores of 720 and up.

Best Ways to Improve a Credit Score of 650

Best Ways to Improve a Credit Score of 650

Now that you know the answer to “What is a 650 credit score?” you should know how to improve it most effectively, as it is still far from excellent. By taking a few measures, you will be able to access more favorable conditions for your loans and much more.

Be diligent about your bill payments

This is one of those steps that cannot be skipped. If you aim for a higher rating, timely bill payments are essential. This factor significantly influences both VantageScore and FICO systems, making it critical to stay on top of your payments. If you frequently forget to pay bills on time, consider setting up automatic payments to avoid missing deadlines.

Consider using a secured credit card

Secured cards are ideal for improving credit ratings. When you get a secured card, you need to make a certain minimum deposit that will be used as your credit limit. The responsible use of a secured card improves your score, as your information will be reported to bureaus—TransUnion, Equifax, and Experian.

Get a credit-builder loan

If you don’t know where to begin with loans yet want to use them to improve your score, you should consider a credit-builder loan. This loan differs from the usual one in that a lender deposits the loan amount into a savings account. You can access the money when the loan is repaid. In this way, you save money and work on building your score.

Another crucial part of score improvement is responsible credit management. Here are the best strategies you should stick to.

Minimize your credit usage

Another factor that will inevitably influence your score is your credit utilization ratio. Regardless of what credit you have access to, you should avoid using more than 30% of the available sum. High credit utilization of over 30% is not viewed favorably and will drop your score. If you manage to have a single-digit utilization, you will see your score improve more quickly.

Be on top of your credit reports

Once a year, you can get reports for free from three major credit bureaus. You should use this opportunity, as regular report monitoring allows you to notice errors and misinformation.

Have a good credit mix

Another solution for boosting your score is having a good mix of credit types—loans, mortgages, and cards. The strategy to build credit in this way is only a good idea if you are never behind on your payments.

Final Thought

So, is 650 a bad credit score? No, it is certainly not bad, but there is plenty of room for improvement if you want to get better conditions and lower interest rates. Also, if you want a credit card that will bring you great rewards and cashback, you should start working on your score. Paying your bills on time, lowering your credit usage, and using a secured card can all contribute to significant improvements.