What a 650 Credit Score Means for You

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The importance of your credit score in managing your finances cannot be overstated. A 650 credit score can have a significant influence on the financial choices available to you, but is it considered good or bad? This blog aims to thoroughly examine the factors that contribute to a 650 credit score and its impact on individuals. It will also offer valuable suggestions on improving your score and effectively dealing with high fees and interest rates. Additionally, we will delve into the concept of a fair credit score and its implications for different generations.

Key Takeaways:

  • A 650 credit score falls in the “fair” range, often leading to higher rates and stricter loan conditions.
  • Key influencers of a 650 credit score include your payment history, credit use, and the age of your credit accounts.
  • Fair scores generally incur higher costs and offer fewer rewards than good credit scores.
  • Enhance your 650 score by regularly checking your credit, paying on time, and maintaining low credit use.
  • While a 650 score presents challenges, strategic financial behavior can unlock credit opportunities and improvements.
what is a 650 credit score

Is a 650 Credit Score Good or Bad?

What does it mean to have a 650 credit score? Well, first of all, it’s important to remember that you don’t just have one credit score. While a 650 credit score is considered subprime, it doesn’t necessarily mean you can’t borrow money. In fact, with a 650 credit score, you fall within the range of “FAIR” credit according to FICO Score 8. So, is a 650 credit score good or bad? It’s definitely not the lowest possible score. Having a credit score of 650 typically categorizes you as a borrower with higher risk according to lenders, although it does not necessarily imply that you have “bad credit.”

Defining a Fair Credit Score

A fair credit score, as defined by FICO, falls within the range of 580 to 669. VantageScore considers a slightly higher range of 601 to 669 as fair. Individuals with fair credit scores may face less favorable terms and higher interest rates when seeking loans or credit. This could result in increased costs and less flexibility in financial products.

650 (Fair)
Credit Score Ranges based on FICO Score 8 Model

Generational Credit Score Statistics

Credit scores can vary across different generations, with Baby Boomers generally having higher average credit scores compared to other age groups. Here is a breakdown of generational credit score statistics:

Average FICO Credit Scores by Generation

Gen Z: 630
Millennials: 650
Gen X: 670
Baby Boomers: 690
  • Baby Boomers: The average credit score for Baby Boomers is the highest among all generations, with an average score of 710.
  • Gen X: Generation X, with individuals born between 1965 and 1980, has an average credit score of 655.
  • Millennials: The average credit score for Millennials, born between 1981 and 1996, is 638.
  • Gen Z: Generation Z, the youngest generation, has an average credit score of 634.

In the United States, credit scores can range from 300 to 850, with higher scores indicating better creditworthiness. According to credit scoring company FICO, as of April 2023, 24% of Americans had a credit score below 650. These statistics highlight the importance of understanding credit scores and working to improve them, regardless of your generational affiliation. Having an excellent credit score, like the range of 800-850, represents the pinnacle of creditworthiness. Individuals with scores in this range have access to the most competitive interest rates and the most favorable loan terms, as well as the highest credit limits.

Factors Affecting Your 650 Credit Score

Several factors influence your credit score, with each factor carrying a varying level of importance in determining your overall score. Here are a few key factors that have the potential to impact your credit score of 650:

  • Credit history: Your credit history is a record of how you have managed credit over time. It includes information about your credit cards, loans, and payment history.
  • Payment history: Paying bills on time is crucial for a good credit score. Late payments can have a negative impact and lower your score.
  • Credit utilization: Credit utilization refers to the amount of credit you are using compared to your total available credit. Keeping your credit utilization low can positively impact your score.
  • Length of credit history: The length of your credit history shows lenders how long you have been managing credit. A longer credit history can contribute to a higher score.

Role of Payment History

It is important to ensure that payments are made on time in order to improve a credit score of 650, as this is a key factor in determining the credit score. Late or missed payments can have a significant negative impact on your credit score and affect your creditworthiness. According to credit reports, 41% of Americans with a FICO® Score of 650 have payments that are 30 days overdue. Unfortunately, late payments can remain on credit reports for up to seven years, which can have an impact on your credit. Payment history also includes bankruptcies, collections, and foreclosures, all of which can have long-term consequences for your credit. Therefore, it is crucial to manage your payment history in order to maintain a positive credit score.

Significance of Credit Utilization Rate

The Credit Utilization Ratio is the second most important factor after Payment History. For example, if you have $4,000 in credit card debt and a total credit limit of $10,000, your credit utilization rate would be 40%. On average, consumers with a FICO ® Score of 650 have a credit card debt of $13,429. To maintain a good score, experts at Pyramid Credit Repair recommend keeping your credit utilization rate below 30%. You can lower your credit utilization rate by paying off debt or increasing your credit limit. This highlights the significant impact that being mindful of your credit utilization ratio can have on your credit score and overall savings.

Fair vs. Good Credit Score

Aspect Fair (650) Good
Loan and Credit Card Approval Higher chances of rejection or less favorable terms. Generally better approval rates and terms.
Interest Rates Typically higher rates due to perceived risk. Lower rates due to better creditworthiness.
Rewards and Benefits Fewer rewards and benefits with credit products. Access to more lucrative rewards and benefits.
Insurance Premiums May face higher premiums. Often qualifies for lower premiums.
Security Deposits Higher deposits for utilities and rentals may be required. Lower or no deposits generally required.
Credit Building Opportunities to improve through responsible use. Continue good habits to maintain or improve score.

Importance of Length of Credit History

The duration of your credit history is the third most significant element that affects your FICO® Score, with a potential impact of 15%. A lengthier credit history demonstrates to lenders that you have a proven record of handling credit responsibly. To maintain a favorable credit history duration, it is important not to close old accounts, as doing so can diminish your credit history and adversely affect your score. Furthermore, make payments on time and avoid opening excessive new accounts.

How to Improve Your 650 Credit Score

If your credit score is 650, it may not be considered as “good”, but there is still room for improvement. It is recommended to aim for a score of at least 700, as this can provide more opportunities and help save money. It is worth noting that around 70% of U.S. consumers have FICO ® Scores higher than 650, so there is potential to raise your credit standing. Individuals with FICO ® Scores in the good range (670-739) or higher typically receive more favorable borrowing terms. The good news is that a score of 650 is just 20 points away from the low end of the “good” score range (670 to 739), indicating that with some effort, you can reach a favorable credit score.

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Steps to Enhance Your 650 Credit Score

  • Review your credit report: Regularly review your credit reports for accuracy and potential improvement areas to maintain a healthy credit status.
  • Make timely payments: Pay your bills on time and in full to establish a positive payment history.
  • Keep credit utilization low: Aim to use no more than 30% of your available credit to maintain a healthy credit utilization rate.
  • Consider opening new credit: Opening a new credit card or loan can help diversify your credit mix, but be cautious and only take on what you can manage responsibly.
  • Monitor your score: Stay informed about changes in your credit score by regularly monitoring it.
  • Consider credit counseling: Working with a credit counselor can provide personalized guidance and strategies for improving your credit score.

Checking for Credit Report Errors

Regularly reviewing your credit reports is a crucial step in managing your credit score. By checking your credit report, you can spot any errors or inaccuracies that may be negatively impacting your credit score. Here are some steps to take when checking your credit report for errors:

  • Obtain a copy of your credit report: Request a free copy of your credit report from each of the major credit bureaus, including Experian, Equifax, and TransUnion.
  • Carefully review the report: Take the time to go through your credit report line by line, checking for any discrepancies or inaccuracies.
  • Dispute errors: If you find any errors, contact the credit bureau to dispute them. The credit bureau is required to investigate and correct any inaccuracies within a reasonable period of time.
  • Keep documentation: Keep records of all correspondence with the credit bureaus, including copies of letters, emails, or any other communication related to the dispute.

Credit Repair Services

If you find it difficult to enhance your credit score by yourself, you may want to think about seeking assistance from a trustworthy credit repair service. These services can offer their expertise and guidance in the process of improving your credit score with a little bit of work. Here are some important factors to keep in mind when searching for credit repair services:

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  • Research and compare: Take the time to research and compare different credit repair companies. Look for reputable companies with a track record of success.
  • Understand the process: Familiarize yourself with the credit repair process and what you can expect from a credit repair service.
  • Negotiation with creditors: Many credit repair services can negotiate with creditors on your behalf to resolve outstanding debts or errors on your credit report.

The Reality of a 650 Credit Score

Securing favorable credit terms with a 650 credit score can be a challenge. This score often signals to lenders a moderate level of risk, which might affect the conditions under which they offer loans. For those aiming to get a conventional home mortgage, the journey may be even more demanding. Lenders could ask for additional security like a co-signer or collateral from applicants with a 650 score. Despite these hurdles, it’s not impossible to obtain a mortgage; the minimum credit score for a conventional mortgage according to Fannie Mae is 620. So, while a 650 score may qualify, it could come with specific requirements such as a maximum 36% debt-to-income ratio and a 25% down payment.

Challenges and Opportunities with a 650 Fair Credit Score

Having a fair credit score of 650 can present both challenges and opportunities. Let’s explore some of the potential challenges and opportunities you may encounter with a 650 credit score:

  • Challenges with 650 Credit Score: With a fair credit score, you may face challenges securing loans or credit cards with favorable interest rates, higher credit limits, or better terms.
  • Opportunities with 650 Credit Score: Despite the challenges, there are still credit products available to individuals with a 650 credit score. For example, you might be able to obtain a student loan, as more than 60% of them are given to applicants with a credit score below 700. You could also be eligible for a traditional credit card with a fair credit score.

Dealing with High Fees and Interest Rates

One of the challenges with a 650 credit score is the potential for higher fees, annual fees, and high interest rates. Lenders may charge higher interest rates or annual fees for credit products such as credit cards, personal loans, or mortgages. Here are a few points to keep in mind when dealing with high fees and interest rates:

  • Compare offers: It is important to shop around and compare offers from multiple lenders to find the best rates and terms for your financial situation.
  • Be cautious of predatory lenders: Some lenders may take advantage of individuals with lower credit scores by offering loans or credit products with excessively high fees or interest rates. Be cautious of such predatory lending practices and do thorough research before committing to any financial products.

Is a 650 Credit Score Really Fair?

According to the credit score ranges provided by the Fair Isaac Corporation, a 650 credit score is considered fair. The Fair Isaac Corporation is the company responsible for the FICO credit scoring model. Falling within the range of scores that are generally accepted as fair, a credit score of 650 is neither excellent nor poor. It’s important to note that credit score ranges may differ slightly depending on the specific credit scoring model employed. A FICO 650 credit score places you within the range of people whose credit is considered a fair score. However, your 650 credit score is almost inside the range of 670-739, which is considered good.

Frequently Asked Questions

Can you buy a house with 650 credit score?

While there is no specific credit score requirement to purchase a house, it is generally expected that conventional loans will necessitate a minimum credit score requirement of 620 or above. Nonetheless, having a higher credit score can result in more favorable interest rates and loan conditions. In some cases, it may be necessary to provide a larger down payment or enlist the help of a co-signer with good credit.

What’s the best way of getting your credit score from 650 to 700?

To raise your credit score from 650 to 700, you need to tackle the issues mentioned in your credit report and develop habits that encourage positive credit. Lowering credit card balances can be beneficial in decreasing your credit utilization ratio.

Is a 650 credit score considered good or bad?

Typically, a credit score of approximately 650 is considered to be fair. However, it is important to note that this score is below the current average credit score in the US for the year 2024.


To sum up, a credit score of 650 is regarded as fair and comes with its own set of benefits and drawbacks. It might restrict your ability to obtain loans or credit cards with lower fees and interest rates. Nonetheless, there are measures you can implement to improve your credit score, including maintaining a positive payment record, keeping your credit utilization rate low, and reviewing your credit report for any inaccuracies. If you require assistance in boosting your credit score, we recommend scheduling a complimentary consultation with our knowledgeable credit professionals. They will offer customized guidance and support to help you achieve a higher credit score.