650 Credit Score: Is it Good or Bad?

What would you say if I told you my credit score is 650? As someone obsessed with maximizing credit card rewards, that score would make me wince a bit, wondering if I’m leaving rewards on the table. But is a 650 score really that bad? Or is it actually decent?

A 650 credit score sits right on the fence between a good and bad score. While not terrible, a 650 score lands squarely in the ‘fair’ credit range, meaning there’s room for improvement.

In this article, we’ll explore what a 650 score means, how it impacts your ability to secure loans, and most importantly – the steps you can take to boost your score today.

What Does a 650 Credit Score Mean?

First, let’s level-set on what credit scores mean. Scores range from 300 to 850, with higher scores indicating lower credit risk. According to FICO, the most widely used scoring model, a 650 score is considered “fair.”

FICO breaks down credit scores into the following ranges:

• 800-850: Exceptional
• 740-799: Very Good
• 670-739: Good
• 580-669: Fair
• 300-579: Poor

Here are the Key factors that would be considered to calculate the credit score:

• Payment history – Have you paid bills on time?
• Credit utilization – How much of your available credit do you use?
• Credit history length – How long have you handled credit accounts?
• New credit – How often do you open new accounts?

So a 650 lands right on the cusp between fair and good credit. It’s below the national average score of 716, indicating there’s room for improvement.

Also Read: 700 Credit Score: Is It Good or Bad?

The Pros and Cons of a 650 Credit Score

A 650 credit score demonstrates to lenders that you are a reasonable credit risk. While not ideal, a 650 score does have some advantages:

Pros

• You may qualify for credit cards and loans at average interest rates
• Shows you generally make payments on time
• Better than subprime credit (below 620)

Cons

• You won’t get the best terms on loans or credit cards
• Indicates you’ve missed payments in the past
• Limited approval odds for premium cards and loans

So while a 650 score has its positives, the drawbacks make boosting your score beneficial. Even a small increase can make you eligible for better loan rates and terms.

How a 650 Credit Score Impacts Your Loan Approval Odds

Your 650 credit score can impact your ability to qualify for financing, along with the rates and terms you’ll be offered. Here’s a breakdown of typical approval odds based on a 650 score:

• Mortgages – A 650 credit score makes approval challenging but not impossible. You’ll likely need a higher down payment of up to 20% or more. Interest rates will also be higher than for those with excellent credit.
• Auto Loans – You can likely qualify for an auto loan with a 650 score, but may face higher APRs. Interest rates typically range from 5-12% for borrowers with credit scores in the fair range.
• Personal Loans – Online lenders often approve 650 credit scores, but limits may be lower with APRs in the 10-36% range. Approval with major banks will be more challenging.
• Credit Cards – Cards for average credit are attainable with a 650 score. You may also qualify for some rewards cards with limits under $5,000. But premium travel cards will be out of reach.

While a 650 credit score expands your financing options, you’ll get better terms by increasing your score. For example, a score of 700 can reduce mortgage and auto loan interest rates substantially.

Also Read: 670 Credit Score: Is It Good or Bad?

5 Tips to Increase Your 650 Credit Score

The good news is that you can take steps to boost your 650 score to unlock better loan terms and rewards cards. Here are my top 5 tips to improve your credit:

1. Reduce credit card balances – High balances hurt scores. Try to keep balances below 30% of the limits. Pay down balances aggressively to see a quick score bump.
2. Check for errors on your credit reports – Incorrect late payments or other errors can drag down your score. Dispute any inaccuracies with the credit bureaus.
3. Become an authorized user – Ask a friend with great credit to add you as an authorized user. It can quickly boost your score.
4. Pay all bills on time – Payment history is the biggest factor in your score. Set up autopay and calendar reminders to avoid missed payments.
5. Limit hard inquiries – Each application for credit causes a hard inquiry that temporarily lowers your score. Only apply for the credit you need.

With diligence and smart credit habits, I’ve seen clients increase scores from the fair range to 700+ in under a year. Be persistent and your 650 score will rise steadily.

Bottom Line

A 650 credit score is right on the fence – not terrible but with room for improvement. While attainable, a 650 score makes qualifying for the best loans challenging. Even minor improvements can unlock better rates and terms. Use the tips in this article to build positive credit habits and boost your score to unlock your best lending options. With dedication over time, a 650 score can absolutely increase to Good or even Exceptional credit ranges.