Fair Credit Score – 5 Best Ways To Improve Your Score
Table of Contents
Fair Credit Score – 5 Best Ways To Improve Your ScoreA fair credit score is a score that belongs to the second lowest range of credit scores. Though you can get approved for credits, it can cost you higher interest rates and unfavorable loan terms. However, you would have hundreds of questions about fair credit scores in your mind. I am Damon DeCrescenzo, an experienced credit professional. With my decades of experience in the Finance niche, I will answer all your burning questions on fair credit scores in this article.
Fair Credit ScoresThe scores between 580 and 669 are generally considered fair credit scores. This range is just a notch higher than the poor credit score that still has to be improved for better credit benefits. Most Americans age between 23 and 29 belong to the fair credit score range. A survey of upgrade points says that their average credit score is 660.
Fair credit score ranges
Anastasia S says her score shot up by 50 points in a month after associating with a credit expert. She was happy that she could buy a new car after signing up with us.
Is your credit score less that 650?
Sign up with The Credit Pros and enhance your credit scores.
What Is a Credit Score and How Does It Work?Before discussing deeper on fair credit scores and their characteristics, we shall quickly brush up on the credit score concepts. A credit score is a three-digit numerical value that represents your creditworthiness. This credit score is estimated by three major credit bureaus by taking a user’s previous credit history into account. These bureaus collect your credit information, like your payment history, credit utilization ratio, and credit type, and present them in a credit report. Loan vendors might approach any credit bureau and ask for your credit report to see if they can approve your credit application.
Fair Credit Score EligibilitiesOne buzzing question in people’s minds would be if they are eligible for a loan or credit card as a fair credit score holder. The simplest answer is yes. Though you belong to a fair credit score range, which isn’t something great in the credit world, you can still get approved for applications. But, the challenges would be bigger. Your chances may be fewer. You would have to pay higher interest rates or get a secured credit. If you have a fear of getting rejected for the loans and credit cards you apply for, you don’t have to be. There is a widely spread myth among people that says it is impossible for a fair credit scorer to have credit. That is not true. The fact is, even a poor credit score holder can have the privilege of owning a credit. The only difference is that these people may not get to enjoy all the same credit benefits as good or excellent credit score ranges. Say like, if a good credit score holder is subjected to pay a 5% interest rate for a personal loan, you will have to pay around 8% or more than that.
Reasons for Fair Credit ScoresA fair credit score is not an impressive score in a loan lender’s eyes. Their perspective would say this category is less reliable in terms of timely loan repayment. But, what are the reasons for these low credit scores?
#1 – Missed PaymentsThe most common reason for low credit scores is missed payments. The payment history without any delay due is the foremost criterion in calculating a credit score. Though you are capable of paying off your loans, you might miss due dates carelessly. This also severely affects your credit score.
#2 – Irresponsible Financial ActivitiesGetting a credit card can actually regularize your credit behaviors and improve your financial responsibilities. Opening credit accounts and putting in all your efforts to attain good credit scores can make you even more responsible for your activities. Otherwise, you would be at risk of failing to have a poor credit score.
#3 – Lack of Credit AwarenessMany may not possess firsthand knowledge of credit scores. Without proper exposure to these terminologies and practices, you might overlook the importance of maintaining a good credit score from the beginning.
#4 – Errors in Your Credit ReportThis is a unique case where you can still fall into the low credit score category due to none of your blunder mistakes. Though you made sure all your credit efforts and results fall in place, your score might reduce due to errors in your credit report. These errors can stop you from reaching higher credit scores.
How To Improve Your Credit Score?Though there are a few alternate options for low credit scores to get approved for credit, it is always better to improve your credit because credit scores are not just loan approval criteria. They are the key factor that determines your creditworthiness. This is a metric that proves how responsible you are in terms of financial activities. Here are a few tips for people with fair credit scores to increase their credit scores.
5 best ways to improve fair credit scores