Understand the meaning of having a credit score above 650, how it's calculated, what loans you can get, and how to improve your score
A credit score is needed for you to be able to get a loan or credit. The reason behind this is because it will help financial institutions to determine your creditworthiness. They will also see every loan that you made and the payment history that you have. Find out more about it by reading the information below.
Credit scores are calculated based on the proprietary algorithm. This will include the person's outstanding debts, payment history, and the length of the individual's credit history.
Credit scores can range from 300 to 850. The higher the individual's score, the lower the risk. People who have lower credit scores are considered high risk, which will make lending companies ask for more requirements.
About Fico scores
Fair Isaac Corporation is the one who established FICO, and it is one of the most commonly used credit scoring systems today.
According to FICO, 90% of the most reputable and respected lenders today are making decisions according to this kind of credit scoring system. Get to know more about Fico scores by reading the information below.
How are credit scores calculated?
The weight of each of the five categories are; 30% of amount owned, 10% is for the new credit, 15% accounts for the length of credit history, 10% is the credit mix and the last 35% accounts for the person's payment history.
The FICO score takes into consideration positive as well as negative aspects of the credit report. The percentage or the weight of any of the categories mentioned above may differ from a person to another depending upon the information available in the credit report.
The FICO score takes all of the information from your credit report. However, the banks or any other lending institution might look at your income, type of credit and employment history when you apply for a loan or mortgage.
Once a certain lender asks for a client's credit report, they can also ask for the Fico score. Other sources say that your Fico score will include 35% of your payment history, 30% of your credit utilization, and 15% as to how long have you been borrowing.
Explanation of credit score ranges
It is important to know the category that you fall into when it comes to credit score for you to be aware. The range of a credit score can go from 300 to 850. Always remember that the higher your score, the higher the chances of you to qualify for a loan. There will also be instances where a financing company is okay with 650 scores, while the other is fine with a 750 score. It will all depend on the lender itself.
A lender or a bank will check your credit score if you qualify for the application that you are requesting. Here are some of the credit score ranges that you should know.
Bad credit score
People with a credit score below 579 is known as high risks. Foreclosures, poor payment history, and bankruptcies are the reasons why people fall into this category.
Good credit score
A good credit score ranges from 680 to 719. People with this credit score can expect approvals and interest rates that are better.
Very Good
A very good credit score ranges from 720 to 799. People with this credit score is known to be small risks, and they often get loan amounts that are higher than usual.
Excellent
An excellent score ranges from 800 and above. Financial freedom is expected to people with this score.
What does it mean to have a credit score over 650
Find out what does it mean to have a credit score over 650 but under 700 by reading the information below.
People are wondering on What does it mean to have a credit score over 650 but under 700. The good news is, having this score is pretty decent since this is considered as a good credit score. If you are applying for a loan, then you can expect these things below.
Easier to Get Higher Score
Once you have reached 650 but under 700, you can now easily increase your score to more than 700. Of course, you need to make sure that you are paying your bills on time to avoid lowering down your credit score.
Financial Success
The rate of your financial success is high since your score is already considered as a good one. Just make sure that when deciding on your financial matters, you're doing it right.
Credit cards with a credit score over 650
People with a credit score over 650 but under 700 can be easier because of the good score that they have.
Credit card companies are giving considerations to individuals with a fair to good credit score. The reason behind this is because they are giving them a chance to improve their scores. If you are looking for a credit card for yourself, then reading the information below is essential.
Capital One Spark Classic
Capital One Spark Classic is best for people with business, due to the benefits that it has. They have an APR of 23.24%, but they don't give fees for any foreign transactions, which is useful especially when traveling.
Capital One Journey
Capital One Journey is perfect for students. The card lets you own 1$ cash back on all of your purchases. It has no annual fee but has an APR of 20.24%.
Car loans with a credit score over 650
Getting car loans with a credit score over 650 but under 700 can make some people anxious, because this is not a high score. But this doesn't mean that they can't get the loan that they want.
There are now a lot of car financing companies who are willing to give people with a credit score over 650 but under 700 a chance. In fact, there are even companies who are approving people with a credit score of 600. If you are wondering what some of these companies are then the information below will be helpful.
Lending Club
One of the companies that can help you with your loan is Lending Club. They are offering a loan of USD 40,000 for people who have a credit score of 600. Their APR ranges are from 5.99% to 35.89%. For you to be able to get the loan, you need to provide a proof of employment and income to the company.
Avant
Another company is Avant; wherein they can offer loans of USD 35,000. They can, in fact, give you an approval in just one day. They are accepting people with a minimum credit score of 580.
Mortgages with a credit score over 650
It is one of the things that play a significant role in getting your loan approval. If your credit score is above 650 but below 700, you fall in the good category on the grade scale. This means that you will have a number of options available to you for the borrowing purposes to finance your mortgage.
You can start with the banking sector. Go to almost every bank that is available to you. This will give a number of options and a generic idea of the market, interest rates being offered and the conditions required to fulfill the needs of approval of your request.
You can get loans from FHA approved lenders that will offer you lower interest rate and manageable terms and conditions. The loan option from government-backed sources should be best possible options for you.
Home Loans with a credit score over 650
If you have a good credit history, of no larger payment delays, you can apply and get approval from government sponsored loan plans e.g. Federal Housing Administration loans. FHA loans will allow you to get credit from their approved lenders.
You can get loans from the banks. The banks will be willing to lend you money for your home and mortgage use. They may charge slightly higher interest rates but with some research, you can expect competitive rates from local banks.
The interest rates that are offered to this range of credit score carrying borrowers are small or almost same as those who have a credit score of 800 and above. The reason being, the number of defaults in this range are low, and people are willing to increase their credit score to get the top-tier offers or discounts.
Personal Loans with a credit score over 650
Repaying your loans on time is a good measure to ensure your credit score keeps improving. Financial organizations can give you a benefit of doubt on the ability to repay your loan with a credit score between 650 and 700. Online lenders remain a lucrative option for you.
Freedom plus
Your personal loan application is approved on the same day while the funds become available within 48 hours. An origination fee of between 1.38% and 5.00% s charged, which is deducted from the loan amount before being deposited in your account. Offers up to a maximum of $35,000.
Prosper
Your loan application appears as a listing on the Prosper platform. Investors then choose an applicant whom they want to finance. As you repay your loan, your interest rate on future loan applications on Prosper reduces.
Springleaf
It is possible for your personal loan application to receive approval instantly on the online platform before you visit their branch. It does not charge any application and is available in 27 States. You can get up to a maximum of $25,000.
Things you can do to improve your credit score of 650
With some discipline and commitment, you can keep on improving your credit score of 650. A score starting from 600 and above is considered average and can secure you many options for credit. Therefore, it is your obligation to ensure it keeps improving until it is excellent. Here are a few ways to assist you.
Open few credit cards concurrently
It is not recommended for you to open multiple credit accounts at the same time. When you do this, it reduces the average age of the accounts thus reducing your credit rating.
Avoid canceling credit cards with no annual fee
The proportion of credit that use to the total credit available to you also contributes to your credit score. When you get rid of a credit card, your credit line gets reduced thus raising the proportion. It doesn't work in your favor, and your credit score is lowered.
Maintain a low credit balance
It is recommended for you to keep your revolving credit balance to under ten percent of the total available credit. Higher ratios point to elevated credit risks. Using all of your limits reflects negatively o you credit score.