A credit score of 653 is part of the “Fair” range in both FICO and Vantage Score models. That means you’re likely to get approved for a variety of loans and credit cards, but you may pay high fees and interest rates.
Luckily, there are plenty of ways to improve your 653 credit score, including by reducing negative marks on your report and adopting better credit-management practices. By taking these steps, you can improve your chances of securing the best loan and credit card options.
Overview of a 653 Credit Score
Your credit score is one of the most important financial numbers that help lenders determine if they should disburse loans to you. It’s calculated based on five types of information.
The biggest factor is your payment history, which reflects details of your financial transactions. It accounts for 35% of the total score.
Amount owed, on the other hand, is a reflection of how much you owe in relation to your credit limit. This is where lenders see if you’re likely to pay your debts on time and in full.
Another important factor is your credit mix, which reflects the kinds of debt you have. You should avoid taking on debt that you don’t need. This includes both revolving and installment debt.
Credit Card Options with a 653 Credit Score
Having a 653 credit score means you’re likely to have access to some types of credit. However, you may find that the options are somewhat limited and the terms and interest rates might not be as favorable.
One way to get around this is by applying for a secured credit card. This type of credit card typically requires you to put down a security deposit, but it can be a great option for those with low credit scores.
The key to using credit cards responsibly is to make your payments on time and never go over your limit. This can improve your overall credit score in a short amount of time.
Auto Loans with a 653 Credit Score
If you have a 653 credit score, it may be hard to find a car loan without high fees and interest rates. Fortunately, there are options available to you.
One way to get approved for an auto loan with a 653 credit score is to build up your credit before applying. By establishing a good payment history and lowering your credit utilization, you can improve your credit score by up to 30%.
Another strategy is to avoid seeking new credit within six months of your auto loan application. Keeping credit card accounts open unless there’s a compelling reason to close them will help you keep your credit utilization low.
Personal Loan Options with a 653 Credit Score
Personal loans are a great way to borrow money for a variety of reasons, including debt consolidation or paying for an unexpected expense. However, if you have a 653 credit score, it can be difficult to find lenders that offer competitive interest rates and terms.
The best personal loan options for people with 653 credit scores are those that have low or no interest fees and offer high approval odds. These include starter credit cards, store credit cards, and secured credit cards.
Those with 653 credit scores can also look into other types of personal loans, such as payday or auto title loans. These types of loans usually have high interest rates and can lead to long-term debt problems.
Mortgages are another good option for people with 653 credit scores. Mortgage lenders offer a wide range of options, including conventional loans, FHA loans, VA loans, USDA loans, and jumbo loans. Many lenders run a soft credit check at the beginning of your application process to pre-qualify you for a mortgage and let you know what you can expect in terms of rates and terms.
Mortgages with a 653 Credit Score
If you have a 653 credit score, you won’t have trouble obtaining a mortgage. There are many lenders that offer conventional, FHA, VA, and USDA loans to borrowers with scores in this range.
With a 653 credit score, you’re also likely to get better interest rates than you would with a lower score. However, you will have to meet certain requirements such as income documentation, and you’ll need a down payment.
You can easily improve your 653 credit score by making timely payments on your existing accounts, paying down non-revolving debt, and not applying for new loans or credit cards. You can also dispute negative items on your report to help boost your credit score.