What does a 670 credit score really mean? Is it a good score or a bad one? What consequences does it have when you try to get approved for new loans or credit cards?
I know these questions crossed my mind the first time I checked my credit score years ago. Seeing those three numbers in the 600s felt confusing. Was I supposed to feel happy or worried?
If this experience sounds familiar, you’re not alone. Many people have credit scores in the fair range and want to comprehend the implications. Let’s explore this together to gain clarity.
Fair Credit Score: How Lenders Perceive It
Among the major credit bureaus, a FICO score of 670 generally falls into the ‘fair’ credit tier. This means lenders see it as an acceptable, if unspectacular, score.
Think of it like getting a C on an important test. You passed but didn’t excel. This indicates to lenders that you may occasionally struggle to make payments on time or have existing debts nearing your limits.
While not a negative score per se, a 670 credit score signals moderately higher risk to lenders than borrowers boasting ‘good’ or ‘excellent’ scores above 700. You can likely still get approved for credit, but expect less favorable terms.
What Makes Up This Credit Score?
FICO and VantageScore credit scores both rely on five core factors, though they weigh them differently:
- Payment history (35% for FICO)- Track record of on-time payments
- Credit utilization (30% for FICO) – Percentage of available credit being used
- Credit age – Length of credit history
- Credit mix – Variety of credit types
- New credit – Frequency of new applications
Scores are fluid and updated based on your behaviors affecting these categories. So while 670 reflects your creditworthiness today, diligent financial habits can boost your score over time.
Impact on New Credit Card and Loan Approval Odds
With a 670 credit score, getting approved for new financing without high fees or rates will likely prove challenging. Why? Because lenders interpret this middling score to mean you potentially struggle to make payments regularly, they view you as riskier.
For credit cards, you may see interest rates around 18% or higher, sometimes with variable APRs exceeding 20%. That’s well above average. Personal loans will also probably come with elevated rates and annoying fees.
I remember applying for my first rewards credit card with a 660 score. I had to plead my case on the reconsideration line before they reluctantly approved me, but with a disappointingly low limit.
Getting approved for significant new credit lines will be an uphill battle. However, being persistent and willing to accept less favorable terms can still land you some financing to build your credit further.
Auto Loans and Mortgages: Securing the Best Rates Will Be Tough
When financing large purchases requiring substantial loans, a 670 credit score limits your options. You’ll find fewer lenders willing to work with you and far less bargaining power versus buyers boasting 700+ scores.
Most auto lenders told me flat out I didn’t qualify for their best-discounted loan rates with my 670 score. I had to finance through a credit union at a much higher interest rate to buy my car.
Mortgages follow a similar story. Government-backed loans like FHA, VA, and USDA products may be more accessible with fair credit than conventional loans. However, you’ll still pay markedly higher interest costs and fees than those with excellent scores.
Bringing a sizable down payment to the table can help counteract the higher rates tied to mid-level credit. But buying a home or car solely on credit alone will be very expensive with a score under 700.
Can I Get Low Rates or High Loan Amounts with a 670 Score?
The short answer is you may get approved for reasonably low rates, but loan amounts and terms will be restricted. Lenders will craft stringent loan structures to limit their risk exposure.
For instance, my auto loan amount was capped at 60% of the car’s value because of my 670 credit score. And my initial credit card line was only $3,000, despite requesting more.
The key takeaway? Shop vigorously and compare offers when seeking financing. You want to identify and select the most competitive terms available from lenders willing to work with your 670 score. Being an informed borrower helps offset having just fair credit.
Strategies to Improve Your Credit Score
The positive news? You can actively strengthen your credit if armed with the right tactics. I managed to climb from 670 to over 750 within a year by doing these:
- Reviewing my credit reports and disputing errors dragging down my score. Fixing mistakes can give a nice boost.
- Paying down balances on my credit cards to lower my overall utilization. This factor is huge!
- Never missing a payment due date. Payment history is very influential.
- Spacing out new credit applications over time rather than bunching them together.
- Calling credit card companies to request higher limits after making on-time payments.
Stay disciplined for about 12 months and you can graduate from the world of fair credit to excellent credit. Then you’ll qualify for the lowest rates and most flexible loan terms lenders have to offer.
In summary, a 670 credit score represents fair credit – not amazing, but not terrible either. See it as a baseline to build upon. With prudent financial behaviors and patience, you can achieve excellent credit and unlock better loan rates and terms over time.
Frequently Asked Questions about 670 Credit Scores
How does a 670 credit score affect my chances of renting an apartment?
Many landlords require credit scores of at least 670 to 700 to approve rental applications. So a 670 score puts you in an acceptable credit range to rent in most cases. However, landlords may request you put down a larger security deposit.
Will a 670 credit score get me rejected for jobs?
Most employers only check credit when hiring for financial or government roles. For other jobs, they likely won’t deny you solely for having fair credit. However, aim to improve your score since excellent credit does look attractive to employers.
Is a 670 credit score good enough to get a cell phone plan?
People with credit scores as low as 650 often still get approved for phone payment plans. So you can likely qualify for cell phone service with 670 credit, though carriers may require a down payment. Shop around for the best offers.
How long will it take to raise my 670 score?
With diligent credit management, you can potentially raise your credit score by 50 points or more within 6 to 12 months. Keep balances low, make payments on time, limit new applications, and review your reports. Developing consistently healthy money habits takes time, but pays dividends.