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What Can You Do With a 650 Credit Score?

A 650 credit score is considered “fair.” It offers access to credit, but certainly leaves room for improvement.

October 21, 2022

Your credit score determines how likely lenders are to loan you money. It can also affect your ability to rent an apartment, get approved for a credit card and more. 

A good score makes your financial life easier, while a bad credit score can make it more difficult to navigate the world of personal finance. 

But what is a “good” score, exactly? Is 650 a good credit score? 

What does a 650 credit score mean?

A 650 credit score means “fair” credit. The FICO scoring model considers scores between 630 and 689 to be “fair.” 

Fair credit is better than bad credit (any score under 629), but it still leaves plenty of room for improvement. For context, the average credit score was 714 in 2021. Scores can range from 300 to 850. 

Wondering how your score stacks up? Check out the average credit score by state, and the average credit score by age

Your credit score measures your creditworthiness. Scores are determined by looking at your past use of credit, your current debt and other factors. 

When you apply for a loan or credit card, lenders will access your credit report and credit score. Scores of around 650 tell lenders that you have fair credit, which may make them hesitant to lend you money. 

A lower score can also mean higher interest rates. If a lender is willing to lend you money, they will likely charge you more in interest if you have fair credit. 

Benefits of a 650 credit score

A 650 credit score shows lenders that you have a reasonable credit history, but they may still be hesitant to lend you money. With that said, there are certainly still benefits of fair credit, compared to bad credit. 

Access to loans: 650 is a good enough score that you should be able to start accessing loans — although you may pay higher interest rates. Auto loans, payday loans and other types of financing are often available at this credit score level. 

Access to credit cards: At a score of around 650, credit cards become an option for some borrowers. Scores lower than 650 may require the use of a secured credit card, which requires a deposit. Unsecured credit cards for a 650 credit score allow you to utilize credit cards without having to put down a deposit. Some of the best credit cards for a 650 credit score might even offer rewards. 

A good base to build credit: Having a score in the 650 range means that you have a fair baseline of credit history to build from. A 650 score expands your access to credit products, which can make it easier to continue building credit and improving your score. 

How to get a 650 credit score

Working on improving your credit score is always a good idea. A bad credit score can make your financial life more difficult, while a better score can save you stress and money in the long run. 

A 650 score is considered “fair,” and is a decent mid-term target to aim for if your score is currently lower. With that said, it’s wise to aim for an even higher score eventually — ideally a score of 700+.

To improve your credit score, you must practice good credit habits. These include:

The specific strategy to get to 650+ will look different for everyone. 

If you have years of credit history and have a low score due to missed payments, collections, etc., then your strategy will mostly involve repairing your credit. This means paying off accounts in collections, fixing any errors on your report and continuing to make on-time payments. 

If you have limited credit history, you must take steps to build a positive credit profile. This might mean opening a secured credit card or a credit builder loan. These products are designed to help you build credit and are available to those with limited to no credit history. They do require a deposit to be made upfront, however. 

It’s also possible that your score is low due to your debt level being too high. It’s best to keep your credit utilization to under 30%. This means that if you have $10,000 in combined credit limits, you should aim to keep your debt to less than $3,000 (30% of $10,000). 

If your credit utilization is too high, paying off debt may help to improve your credit score. If credit card debt is holding you back, Tally† may be able to help. Tally is an app that helps qualifying Americans consolidate credit card balances into a lower interest line of credit. Learn how Tally works here

How to go beyond 650

650 is a reasonable stepping stone towards good credit, but it’s best to aim higher. 

Credit scores can range all the way up to 850, but anything over 740 is considered “very good.” 

Improving your credit score beyond 650 will require you to take a look at what is holding you back from a better score. Using a tool like Credit Sesame or Credit Karma can help you understand your credit history, making it easier to make informed decisions about what factors to focus on. 

There are five credit scoring factors that contribute to your score:

  • Payment history - 35% of your score

  • Amounts owed - 30%

  • Length of credit history - 15%

  • Credit mix - 10%

  • New credit - 10%

As you can see, the two biggest factors are payment history and amounts owed. If you can optimize these two factors, you’ll be well on your way to a better credit score. 

Payment history can be improved by continuing to make on-time payments, even if you can only afford to make the minimum payments. It’s a good idea to set up autopay on your accounts so you don’t accidentally miss a payment. 

Amounts owed can be improved by reducing your debt or by increasing your credit limit. Increasing your limit might have a temporary negative impact, but over the long run, it should help to improve your credit utilization ratio and your credit score. 

The remaining factors — length of credit history, credit mix, and new credit — are also important, but you should focus on the biggest factors first. 

Bottom line

A 650 credit score is considered “fair.” At this level, you may be able to get approved for a loan or a credit card, but it may be difficult to find one with good terms and interest rates. 

If you’re on a credit-building mission, explore the rest of the Tally blog to learn much more about all things personal finance. 

†To get the benefits of a Tally line of credit, you must qualify for and accept a Tally line of credit. Based on your credit history, the APR (which is the same as your interest rate) will be between 7.90% - 29.99% per year. The APR will vary with the market based on the Prime Rate. Annual fees range from $0 - $300.