A credit score assumes a lot of importance in a multitude of financial benefits you would have access to. In fact, it can have a bearing on the rate of interest you would be paying or even decide whether you would be able to get a loan or not. Good news is you can have a loan with 650 credit score. I can walk you through all of the types of loans you may be curious about. While a credit score of 650 could get you loans at an attractive rate of interest, the current scenario may not be that easy and hinder your ability to get a good loan.
First, let me pat you on the back for taking the right steps, you are wise in seeking out information, and you are on the right path!
second, use this site to inform yourself about the options you currently have for mortgages, auto loans, and credit cards with a credit score of 650.
What is fico score?
The FICO scores stand a base on which the banks and financial institutions let you avail a loan, and the credit score system was created by Fair Isaac Corporation.
The FICO scores are offered in a range from 300 to 850. Here is the breakdown of what these scores mean –
|Where You stand||FICO Score|
|Excellent||800 to 900|
|Good||720 to 799|
|Fair||680 to 719|
|Average||600 to 679|
|Bad||300 to 599|
When we speak of 650 credit score in 2019, only around 15 percent of the US citizens possess that credit score. A mere 27 percent have a credit score of 649 or lower. In fact, it should be worthwhile to note that over 58 percent of the Americans have a credit score of 700 or more.
What can I get with a 650 credit score?
Ideally, a credit score of 650 is considered bad to average by many banks and lenders. You may not be able to get a worthy loan with such a credit performance. Even if you get one, you may be charged a higher down payment or a higher rate of interest.
Here is what you get with a 650 credit score –
|Any high-end credit card||No|
|A credit card that offers no annual fee||Yes|
|Rental apartments||May or may not be|
|Initial credit card bonus options||No|
|Credit card with no foreign transaction fees||Yes|
|Loyalty credit cards with hotels or airlines||No|
|Personal loans||May or may not be|
|Best rates of interests||No|
|Auto loans with better interest||No|
|Auto insurance premiums||Higher|
That is just a peek into what a credit score of 650 can offer you. However, you can opt for whichever options are available at your disposal and attempt improving your credit score further. More on that later.
What is a 650 credit score interest rate?
Depending upon whether the bank you have approached considers your 650 credit score average or fair, your rate of interest will change. In any case, you will end up paying more than what actually is being paid by those with a higher credit score.
Ideally speaking, you should get an interest of around 5 to 6 percent rate on a mortgage loan that spans around 30 years or so. In fact, the customers with a credit score of 350 lie in the medium risk segment in the financial lending scenario, and many of the lenders may not be willing to offer you loans as such. It will also be dependent on what type of loan you are trying to get. It may be a good idea to get in touch with your financial institution to discuss the possibility of getting a loan.
As for the car loans, for instance, lower rates of interest are limited and reserved for the new models of cars and for those with a credit score of 700 or higher. If you are looking to a 650 credit score loan on cars, it would be a great idea to get an interest rate of about 6 percent.
How to Improve your 650 Credit score?
Are you feeling reeling under the limitations of the credit score of 650 or below? You need not to worry. It should be quite easy to improve your credit score in just six months!
Here are a few tips that should be helpful in improving your 650 Credit score –
- Card Correction – If you think there are some negative information that pertains to your repayment history on your card, you can check if it can be corrected or removed. There are a few agencies that can help you achieve it.
- Opt for Available credit cards – The below 650 credit score can let you have access to a few credit cards with no annual fees. You can check out the 650 credit score credit card options available to you. This can help you use the card and make regular payments to help you improve your credit score.
- Lower Utilisation – Always make sure that you are utilizing less than 30 percent of your credit limit. A credit card may be tempting for overspending, but ensure that you are not falling prey to the habit. Lower utilization will help you make payments in time and let you improve your credit score of 650.
- Always Pay on Time – Make sure you are paying off all your dues on time. Whether credit card bills, loans or any other instruments, ensure that you have been making payments on a regular basis and in full. Payment history plays a major role in improving your credit score. It will establish you as a reliable borrower and thus lets you enhance your credit score further ahead.
- Have a mix of credits – It may be helpful to opt for a mix and match of credits in the form of both loans and other credits.
If you have a credit score of 650, you are not indeed far from the fair credit score of 700. Given the fact that it has been considered to be the industry average and aiming for a score like that would definitely help you achieve the best financial gains. If you follow the tips shared above carefully, you can definitely look ahead for an improved credit score quite soon.
– How To Get My Credit Score Above 700
– Is 700 a Good Credit Score?
– What kind of interest rate can I get with a 650 credit score?
– What is a good credit score to buy a house?
– Can I get a loan with a credit score of 650?
– 650 credit score car loan – Can you get a car loan with a credit score of 650?
How to raise your credit score In 6 months