650 Credit Score

650 Credit Score

Today we’re going to look at the 650 credit score.  FICO Credit scores vary between 300 to 850. While the exact methods of credit scoring are covered in secrecy, we are aware that the lowest FICO score possible is 300, while an 850 FICO score would mean you’ve got perfect credit.

650 Credit Score

If you have recently obtained your report and found that your credit score is 650, you may feel uncertain about what that really means. Should you be rejoicing or frowning? With the correct range in place, we can start to scrutinize the 650 credit score to be able to conclude if it’s good or bad.

A 650 credit score would generally fall below average, or on the low side of average. We also know that most lenders consider 620 as the bottom cut off for prime loans, which is the dividing line between fair and bad credit. That being said, a 650 score is a little better than being in the “subprime.”

Simply put, a 650 credit score would probably be best described as a “fair” score. If your credit score is in the neighborhood of 650, it means you have probably made a few financial mistakes, but nothing really serious.

Maybe it’s due to the missed payments you have once in a while, or a few credit card balances that are slightly higher than they should be. There’s nothing to be frantic about, though, but there sure is room for improvement.

Improving Your 650 Credit Score

Raising your credit score from to 650 and beyond is very doable. Here are the factors that the credit scores are based on:

1. Payment History

Being late on payments, even just for days, negatively affects your credit score. Payments received more than 30 days after the due date are considered late. Most lenders report all payments that are late and report them in different batches. Meaning, even if you are late only by a day, your account could be reported along with accounts that are more than 59 days late.

2. Credit Balances

Your credit balance gives an idea to the creditors of how much cash you keep and whether you are a wise borrower. Higher balances on credit accounts cause a negative impact on your credit score.

3. Recent Credit

People who open more than one separate credit card account at a time could be viewed with concern. The effort to open several new accounts will cause multiple credit inquiries.  This may imply that you could be strapped for cash, which will possibly lower your credit score.

4. Utilization of Available Credit

If you are maxed out on your existing credit cards, your rating will surely suffer. So keep those balances down to less than 35% of the available credit. I hear you, it can be pretty agonizing, but certainly doable.

5. Length of Credit History

The further back your credit history goes, the better it is for your score. Maintain an assorted mix of credit accounts, and don’t close old accounts.  Together, these practices will help boost your credit score.

Keep in mind that you want to be in the driver’s seat of your credit rating.  Your 650 credit score is OK, but as you work to improve it you will discover greater spending power.