A credit score of 650 is considered to be fair. You would be classified as a subprime borrower if your score falls below this level. However, it is possible to improve this score over time to enjoy lower rates and more favorable terms on credit cards and loans. To begin improving your credit score, focus on making on-time payments on existing accounts. Also, avoid overusing credit, aiming to use less than 30% of your available credit.
Your credit score is calculated based on a combination of several factors. Your positive payment history is the most important component. You can improve your credit score by reducing your credit utilization, increasing your credit limit and not applying for multiple lines of credit at a time. You should also pay attention to your credit report and correct any errors or inaccuracies you find.
If your credit score is 650, you need to work to improve it. It’s not considered poor, but it doesn’t stand as a solid foundation for future credit scores. Fortunately, 650 credit scores aren’t as low as you may think, and there are many ways to improve them.
The good news is that a credit score of 650 is still a good base for buying a home. You can qualify for a mortgage with this score, but be aware that your interest rate will be higher than you would like. However, you will have the opportunity to improve your credit score and get a more affordable loan.
Depending on your financial situation, a credit score of 650 can be considered a fair score for car loans. While it is important to remember that you should never spend more than you can afford to spend, having a good credit score is vital to your car buying experience. By keeping your score in the high six-seven-digit range, you can improve your financial situation significantly.
Although a credit score of 650 may be adequate for a mortgage, you should make efforts to raise your score as high as possible. A higher credit score will allow you to qualify for lower interest rates, which can save you thousands of dollars over the life of a mortgage. Paying down your debt, especially credit card debt, will also improve your DTI ratio.
If you have a credit score in the 650 to 699 range, you may qualify for credit cards with rewards. A typical credit card offering one percent cash back is worth around $7.50 per month or $90 per year, and the rewards will more than cover the annual fee. Once you reach this credit score, you may even qualify for a credit card with no annual fee.
As long as your income exceeds the median income in your area, you may qualify for a USDA home loan. A USDA loan is much lower interest-rate than conventional loans and is more affordable if you have a 650 credit score. However, you should keep in mind that traditional banks usually follow the guidelines of third-party underwriters. While these companies can sell your loan and get extra insurance in case you default, they generally have very limited flexibility when it comes to the terms of your loan.
