What is a Credit Score of 650?

A 650 credit score is deemed as ‘fair’. The FICO score is a number between 300 and 850 that gives a clear picture of an individual’s creditworthiness, and the higher the FICO score, the higher the chances of the individual to pay back their loan on time

650 credit score

With a 650 credit score, you can get approved for certain credit cards, but still be turned down by other lenders. Moreover, you may be compelled to pay more interest for the credit cards you’re approved for.

A good credit score falls in the 700s. However, a 650 score is not deemed poor. Keep in mind that the higher the score, the lower the interest rate will be when borrowing money. But if you have a higher rate, you can manage the amount of interest you pay by paying off the balance on a monthly basis or carrying a low balance.

The good news is that improving your credit score is not difficult. Just practice good financial habits and you’ll improve and maintain a strong credit history that will allow you to qualify for the loan you need.

 

Is a Credit Score of 650 good or bad?

The FICO score is determined based on the information from all the three leading credit bureaus (aka credit reporting agencies) and is created by the Fair Isaac Corporation. The FICO system is used by about 90 percent of lenders when reviewing loan applications and is the scoring module Transunion, Experian and Equifax use to determine their score.

FICO scores fall between 300 and 850. Scores that fall below 580 are considered to be ‘poor’ while scores at 740 or greater are said to be ‘very good’ or ‘excellent’’. Anything over an 800 FICO score is typically deemed to be in the ‘very good’ to ‘excellent’ category.
To obtain perfect or near perfect credit, you have to pay all your bills on time, use a mix of various types of credit wisely (including personal loans, car loans, credit cards, etc), manage your credit utilization ratio and ensure you use less than 30 percent of your credit limit.

Ideal credit is usually built on consistently utilizing wise credit habits. However, there are several factors that can hurt your credit score.
There are different things that can damage your score, including:

  • Missed or late payments
  • Having too many credit cards (or too few credit cards)
  • Keeping a high credit card balance
  • Maintaining high loan balances
  • Applying for multiple credit accounts
  • Opening finance company accounts

The most important thing you can do to improve your credit health is to demonstrate healthy credit habits over an extended period of time.

 

650 credit score mortgage rate

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Can I buy a house with a 650 Credit score?

Yes, it is possible. Several possible loan options are VA Loans, FHA Loans and USDA Loans.
For Federal Housing Administration (FHA) loans, you must have at least a 580 FICO credit score but most financial institutions won’t approve the loan below 620. Conventional loans typically require a score above 650 unless there is a down payment of greater than 5%. So, obtaining a mortgage with a 650credit score is very possible as well as a credit card.
However, your objective should be to improve your credit score. A higher credit score will guarantee more attractive loan terms and rates. This applies to credit cards, mortgages and loans.

How to improve a 650 credit score?

How to improve 650 credit score

Even though it is preferable to have a score in the high 700’s, scores below that don’t exclude the possibility of getting approved for a Mortgage Loan. As we discussed earlier, there are multiple options with a 650 credit score. Although the rates and terms are more attractive with higher scores, there are options available. To find out what you can qualify for and what the options are, please contact us today!

 

Image Creative Commons Attribution-Share Alike 3.0 Author: Vikjam

 

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