Is 650 a good credit score?

Understanding your credit score is important for making financial decisions.

A credit score is a measure of how reliable you are when it comes to paying off your debts. It can also determine the terms of the loan you can take out and even the rates you will pay.

So, is 650 a good credit score? In this article, we will look at what a fair credit score is, the average credit score in the US, the factors that affect a credit score, the risks associated with a fair credit score, which credit cards you can qualify for with a fair credit. score and how to improve your credit score.

Is 650 a good credit score?

A credit score of 650 falls within the “fair” FICO range of 580 to 669. Thus, on this measure, a credit score is not considered “good” until it reaches 670.

People in the “fair” range are considered subprime borrowers, which means that their creditworthiness is lower than desired. As a result, loan applicants with a satisfactory credit score are often required to pay a fee or deposit for certain types of loans and may not be approved for a loan at all.

In addition, lenders may offer high interest rates to those with low credit scores. This can lead to additional expenses and debt over time. In addition, rewards and credit card transactions may be less favorable for people with low credit scores.

A low credit score also means that you are more likely to have a lower credit limit, and this can make it difficult to get your house or apartment approved for rent.

What is the average credit score in the US?

In August 2022, FICO reported that the average FICO credit score is 716. So if your score is 650, it is well below average. The good news is that 650 is only a few points away from the upper end of the “good” range (from 670 to 739).

What factors affect my credit score?

As you work to improve your score, it’s helpful to understand the factors that affect it.

FICO scores take into account five main factors:

• Payment history (35 percent)A: This critical evaluation factor takes into account whether you regularly pay bills and other obligations on time. This can significantly impact your score, especially if you’ve been late or missed payments in the past.
• Credit use (30 percent)A: Your credit utilization ratio refers to amounts owed in relation to available credit. If you have credit cards with large balances relative to your borrowing limit, this can hurt your account. Experts recommend maintaining a credit utilization ratio of 30 percent or less, but the lower the better.
• Length of credit history (15 percent): This factor takes into account the average age of all your credit accounts, in addition to the age of your oldest and newest accounts. The longer your credit history, the better your score will be.
• Credit structure (10 percent): The credit balance is calculated based on the types of credit you have, such as installment accounts and credit cards. A healthy mix of loan types is good for your account, although it’s not as important as paying on time and keeping your card balance low.
• New loan (10 percent)A: The length of time since you applied for a new loan also affects your score, and any application that raises serious questions about your credit can lower your score by several points. However, the impact of new requests is small (about five points or less) and temporary.

What credit cards can I get with a credit score of 650?

You might think it’s impossible to get a credit card if you have a fair or average credit score, but there are plenty of cards designed for consumers with a 650 credit score.

Lenders know that not everyone starts out in the same financial position and they are willing to work with consumers who don’t have a long credit history or who have made some mistakes along the way. Here are a few cards you can qualify for:

Credit card Visa® Petal® 2 “Cash back without commission”

This card has no annual fees, late fees, over limit fees, foreign transaction fees, and chargeback fees. Applicants may need to link their bank accounts to determine eligibility. However, this does not require a credit check.

The Visa® Petal® 2 Cash Back, No Fees Credit Card offers 2% to 10% cashback at participating stores, 1% cashback on all other purchases, and up to 1.5% cashback on qualifying purchases when paid by shoppers. their account on time for up to 12 months. Earned funds are redeemed in the form of statement credits.

Capital One QuicksilverOne Cash Rewards Credit Card

The Capital One QuicksilverOne Cash Rewards Credit Card is a great option for consumers with an average or average credit score.

It offers a 1.5 percent cash back on all purchases, as well as a 5 percent cash back on hotel and rental car bookings made through Capital One Travel, with no cap on the amount of cash back that can be earned. The cashback reward can be redeemed in the form of a credit statement, check or gift card. The card does not require annual maintenance.

Capital One Platinum credit card

The Capital One Platinum credit card is another option for consumers with a fair credit history. It does not charge annual fees, foreign transaction fees, and balance transfer fees.

Capital One Platinum offers no rewards or minimum privileges, but you automatically receive a higher credit limit after six timely monthly payments.

Deserve® EDU Mastercard for Students

The Deserve® EDU Mastercard for Students is a good option for students who want to increase their credit and get rewarded for their spending. It provides up to 1% cash back on all purchases and does not charge an annual fee or commission for foreign transactions.

How can I improve my credit score?

It takes time to rebuild your credit score, but it’s possible with a little work. Identify the factors that affect your credit score, then take the following steps to improve your score:

• Make sure you don’t miss payments and catch up.
• Pay off your revolving account balances and limit the number of times you apply for new accounts.
• Check your credit reports from Experian, TransUnion and Equifax to make sure there are no errors in your credit file that could lower your score. You can get your credit report for free every week until 2023 through AnnualCreditReport.com. If you find errors in your credit reports, the three major credit bureaus are required by law to investigate your claims.
• If you have someone you trust who has a credit card in good standing, you can ask if they can add you to the account as an authorized user. It may help your account if your authorized user account information is shared with credit reference agencies. Just remember to use it responsibly because the primary account holder is responsible for reimbursing any charges you put on the card.
• A secure card can be a good way to improve a thin or troubled credit history. This requires you to make a deposit, which becomes your credit limit. You can use the card just like any other credit card and you will be charged interest on any balances you hold. Your payments will be reported to the credit bureaus and your deposit will be returned when you close your account.
• Get a loan for rent and utility bills. If you pay your rent or utilities on time, you can improve your credit score. Several services are available, including Experian Boost, RentTrack, and RentalKharma.
• If you only have one type of credit account (credit cards or loans), consider opening another one.

bottom line

A credit score of 650 is considered “fair” and can help you qualify for many credit cards. But you don’t have to agree. With a little patience and consistently using credits responsibly, you can eventually move into the “Good” or even “Excellent” range, opening up opportunities for cards with more generous rewards and better perks.

CreditCards.com Team This article was created using automation technology and carefully edited and reviewed by our editorial staff.