An Ultimate Guide on 650 Credit Score [2023 Updated]

Is 650 a Good Credit Score?

No! It’s a fair credit score according to the credit scoring model FICO. Although it’s better than poor and less than good, it still needs considerable improvement. 

According to statistics, 17% of Americans fall within the FICO score fair range (580-669). Of course, this range is below the US national average of 716. 

Furthermore, 28% of people with a fair credit score tend to become delinquent in the future. This explains why some lenders consider people with a fair credit range as having greater credit risks and won’t approve their loan request. Some lenders may even take advantage of your subprime credit situation to offer you higher interest rates.

Can I Get a Credit Card With a 650 Credit Score?

Yes! But may not be able to get the best credit cards and lowest interest rates as they are for people with excellent credit scores.  

It’s better to build your current credit score before applying for a credit card. Even if credit card issuers are willing to grant your credit card request, you may pay higher rates than others.  

And this prone you to more debt and further hurt your credit score. 

What Kind of Credit Card is Suitable for a 650 Credit Score?

Although your options are limited to a 650 score, you can still get a credit card. Here is the kind of credit cards you can get with a fair score.

1. No Annual Fee Credit Card: Several card issuers approve cards without annual fees for people with 650 scores.  

2. 0% Intro APR credit Card: With a fair credit score, you can qualify for a 0% introductory APR credit card. But the introductory period might be shorter. 

3. No Foreign Fee Credit Card: You can get credit cards with no foreign transaction fees. They can also serve as travel cards. 

4. Favorite Store’s Credit Card: With a 650 score, you can get your favorite store’s credit card. In most cases, store credit cards have a $0 annual fee. And you can easily use them to build your credit at a low cost. Some store cards may even offer you first-purchase discounts and ongoing rewards.  

So, you have several credit card options with a fair credit score. But try to conduct research, read reviews online, and weigh your options carefully before getting one. 

Can I Get a Reward Credit Card With a 650 Credit Score?

Generally, the most rewarding credit cards are reserved for people with good or excellent credit scores. But with enough research, you can get cash back or travel reward credit cards with a 650 score. 

CreditYelp can help you get rewarding credit cards even with your 650 credit score. 

CreditYelp is an online broker that helps you find a good credit card deal based on your financial reality. We have a network of credit card issuers that set eligibility criteria for potential applicants based on their scores. 

CreditYelp offers you convenience, so you don’t need to fill out multiple forms for different credit card issuers. All you need is to fill out one, and you will receive offers through CreditYelp. We believe that regardless of your score, there’s always a credit card for you. 

Steps to Get a Lower Interest Credit Card With CreditYelp 

It’s easy to get a lower-interest credit card with CreditYelp. All you have to do is to follow these steps; 

1. Fill Out a Form. The first step is to fill out a form. After which, we will send your credit card request to several credit card issuers. 

2. Accept Your Offer. Several credit card issuers will send you a customized offer after seeing your credit card request. And you have the option to compare and evaluate their offers and make an informed decision. 

3. Get Your Card. After you choose the credit card issuer you prefer; you will get an email notification on when and how to get your credit card. 

Why You Should Consider CreditYelp

• CreditYelp works with a network of credit card issuers who set eligibility criteria based on applicants' peculiar financial situations.

• You can get lower interest rate credit cards. 

• It takes less than 10 minutes to handle your request, and CreditYelp will connect you with several card issuers for your selection.

• You can easily get credit cards with juicy rewards/perks.

• Any credit card you choose will have an irresistible intro/welcome offer.

• You can enjoy credit cards with higher credit limits with the help of CreditYelp.

Can I get a Loan With a 650 Credit Score?

Yes, you can get a loan with a 650 credit score. But is it rational to apply for a loan with a fair credit score? No! Lenders could charge you higher interest rates and more fees than those with good or excellent scores. And this higher interest rate and exorbitant fees might make the whole essence of the loan counterproductive. 

For instance, if you need a personal loan to consolidate a credit card debt, the interest on the new loan may be too high. This could affect your ability to save money in the long run. 

So, if you have a fair credit score and your needs aren’t urgent, avoid  personal loans. Build your credit score first, and you can get a personal loan with lower interest within a short time. 

However, if you urgently need a personal loan with a fair credit score, here’s how to apply:

• Start by looking for potential lenders. Narrow your search to lenders in your states that offer loans to people with a 650 credit score. 

• Review each lender’s loan amount requirements to ensure you can get the loan you need without increasing your credit utilization ratio.

• Consider the interest rates and fees each of these lenders charges. 

• Also, check whether the lender you opt for charges a prepayment penalty for paying off your loan in advance. 

• Prequalify for the loan you are applying for and decide whether it’s worth incurring a hard credit inquiry for. 

• Lastly, choose a lender with good terms such as low interest rates.  

How Long Does it Take to Fix a 650 Credit Score? 

How long it takes you to fix a 650 credit score depends on several factors. For instance, if you have accurate negative items on your credit report, they can stay on your reports for about seven years.

These negative items include late payments on loans and credit cards, delinquent accounts, charge-offs, accounts that have been sent to collections, bankruptcies, deeds in lieu of foreclosures, and foreclosures. 

And until these items are no longer reflected on your credit report, it may take a while to see a significant increase in your credit score. However, if there are no negative items on your report, a few months of prompt payment and a responsible financial pattern can easily boost your credit score. 

What Factors Affect Your FICO Score?

The first step to improving your credit score is to check your FICOScore. Your credit report usually provides suggestions on how to fix your score.

If you pay close attention to the issues highlighted in the report and avoid habits that could hurt your score, your credit score will improve within a few months. And this will give you more access to low-interest loans and credit cards.

So, here are some of the factors that can affect your FICOscore:

#1 Payment History 

Your payment history is one of the most critical factors that affect your credit score. It accounts for 35% of your credit score. It shows how often you pay your debt on time, your missed payments, the number of past due dates you pay your bills, and how you recently missed payments.  

To improve your credit score, you need to pay bills on time, stay current on missed payments, and possibly have a conversation with your creditor. 

#2 Credit Usage Rate 

Credit usage rate is the amount of available credit you are currently using. The higher your credit usage rate, the lower your credit score.  

If your credit usage rate is 15%, it means that you are using 15% of the credit limit available to you. So, if you have a $12000 credit limit, a credit usage rate of 15% is $1800. 

Your credit usage rate accounts for 30% of your credit score. So, if you want to build good credit or work towards having an excellent credit score, you need to keep your credit usage rate as low as possible.

Ideally, try keeping your credit usage rate below 30%. That means your credit usage rate of a $12,000 credit limit shouldn’t be more than $3,600.

#3 Length of Credit History 

Your length of credit history accounts for 15% of your FICO score.  For instance, you can quickly build an excellent credit score if you have long history managing loans and credit cards, especially when you consistently make prompt payments.

Whenever you request loans, lenders review your credit history to determine whether you are a credit risk or not. So, ensure you keep an excellent credit history with track records of prompt payment. 

#4 Credit Mix 

Your credit mix determines the number of revolving and installment credits (like installment loans, revolving debts, mortgages, etc.) you have. It accounts for 10% of your FICO score.

Maintaining a credit mix gives lenders the impression that you can handle multiple loan types. Improving your credit mix alongside other factors discussed above can go a long way to boost your score. 

So, a good way to improve your credit score is to have a diverse mix of credit. I am not saying you should open a credit account you don’t need. But avoid closing a paid-off account as it may negatively impact your credit score. 

#5 Recent Applications 

Your recent credit applications can negatively impact your credit score. It accounts for 10% of your FICO score. Whenever you apply for new credit, the lender makes a hard inquiry into your credit history. And this hard inquiry can lower your credit score by a few points. 

But you can reduce the number of hard inquiries by checking out prequalification forms. With prequalification forms, you can always check the chances of getting a product like a credit card before applying. With this approach, your credit score will have little or no damage. 

#6 Public Records

Public records could negatively affect your credit score. It doesn’t matter whether you repay the money you owe; public records like tax liens, civil judgments, and bankruptcies may remain in your report for over seven to ten years.  

But if you think there are errors in your Experian and Equifax credit reports, you can dispute such errors directly on their website. 

How to Improve Your 650 Credit Score 

Pay Your Bills On Time 

The first step to improving your 650 credit score is to avoid late and missed payments. They seriously hurt your FICO score. You can avoid missed and late fees by setting up automatic payments, calendar alarms, or sticky notes.

Just do anything that will help you remember to pay your bills on time. Although instant results aren’t likely, with prompt payment, it’s possible to move your credit score into a new range in less than 12 months.

Consider Obtaining a Secured Credit Card 

Secured credit cards are more like traditional credit cards. Just that, with a secured card, you pay a cash deposit upfront to guarantee your credit line.  

Depending on the credit card issuer, it could be a few hundred dollars. And as you use the card and pay your balance regularly, the lender will report your activities to the National Credit Bureaus. And this will reflect in your file and improve your credit score in the long run. 

Consider a Credit-builder Loan 

Credit-builder loans are designed to improve personal credit histories. They are available in different forms, and you can get one from a credit union. Here’s how it works; the credit union places the loan in a savings account where it earns interest.

But you can’t access it until you pay off the loan in full. Immediately after you offset the loan, you can access the fund and the accumulated interest. 

The credit union reports your payment to national credit bureaus. And regular payment on your report can improve your score. It’s also a smart saving tool. 

Consider Consolidating Your Debt 

Debt consolidation involves combining multiple debt balances into one new loan. This approach can potentially improve your credit score in the long run if you use it specifically to pay off your debt. 

Sometimes, you may initially experience a drop in your credit score. Don’t fret; just make prompt payments and avoid racking more debts. Within a few months, you will see a remarkable improvement in your score. That is because your report will have an improved payment history and a lower credit utilization ratio.  

FAQs

1. Is It Possible to Get an Auto Loan With a 650 Credit Score?

Yes! And there are no minimum credit score requirements to get an auto loan. But it may limit your ability to negotiate for lower interest rates and more favorable terms. 

If you have a fair credit score and need an auto loan, here are a few things you should do:

Make More Down Payments 

If you have a 650 credit score, ensure you have enough money to make a down payment before you apply for an auto loan. Most times, the only option available for people with a fair credit score comes with a high-interest rate. And if you make a big down payment, it will help you save in the long run. 

Consider a Co-Signer 

A co-signer is a person who agrees to be legally responsible for paying your debt if you don’t pay back the loan as agreed. A co-signer enables you to make large purchases, such as a car, if you aren’t qualified for the loan due to your credit score.  

Understand Your Option 

If you have a 650 credit score, it’s important to compare rates and terms across several lenders when looking for an auto loan. The more options you have, the higher your chances of getting a better deal. But the good thing is shopping around won’t necessarily hurt your credit scores. 

Most times, hard inquiries about your credit report that takes place within a particular time period may only count as a single inquiry. But it depends on your credit scoring model. 

2. What will be the Mortgage Rates for a 650 Credit Score?

You need a minimum of 620 credit score to qualify for a conventional mortgage loan. So, with a 650 score, you can get a mortgage loan of $300,000 with an average interest rate of between 4.293 percent and 3.317 percent. 

But those with good or excellent credit scores can get the same mortgage loan at about 2.704 percent average interest rate. 

Nevertheless, if you aren’t approved for a conventional mortgage, you can get alternative lending options like an FHA loan, a VA loan, or a USDA loan. 

3. What Are the Alternative to Personal Loans When You Have a 650 credit Score? 

• Peer-to-Peer Loans: You can apply for this type of loan via a lending website. They don’t have a minimum credit score requirement. All they need is evidence of income and other assets. You can get up to $5000 through peer-to-peer loans. 

• Borrow from Family and Friends: Regardless of how poor your credit score is, you can get cash from your friends or family members. Ensure that you pay back the loan as agreed. Otherwise, it may affect your relationship with these people. 

• Low-Interest Credit Card: Most times, you may not be qualified for a low-interest credit card. But when you eventually get a high-interest credit card, it will still be lower than payday loans. When you work with CreditYelp, you can potentially get credit cards with great interest rates.