I think we can agree that credit scores can be confusing.  

Many people will ask, “Is 650 a Good Credit Score?”

Taking the time to understand the world of credit scores can be a very troubling process for many people. The concern about this rating is unusually high because of how important credit scores are to your financial future. A poor credit score can plague a person for years until they improve it. However, a good credit score can make life a lot easier for someone who has carefully managed their credit and debt.

That said, there is a lot of confusion about how credit scores are generated and decided. After all, the three-digit number that makes up a credit score is somewhat abstract and lacks a concrete and straightforward explanation. In fact, some people who thought they would have a high credit score were probably hugely disappointed to find that they had a mediocre or even lousy score.

As a result, we have compiled some of the most frequently asked questions about credit scores. These issues are followed by detailed answers that help to explain the answer with as much information as possible. The idea behind this article is to give you a comprehensive and engaging source that will answer every credit score question you have on your mind.

So if you are confused about your credit score and need help learning more about it, please read through the information below. It can help you grasp the unique nature of credit scores and provide you with the details you need to improve your rating. In this way, you can avoid falling victim to the problems associated with poor credit scores.

Q: Is 650 a Good Credit Score?

A: Several credit tiers indicate the value of your credit. As there are different credit rating companies available, these tiers can change significantly. For example, a 650 credit score with FICO is considered a fair score. However, dropping a single point puts you in the poor category. The total range of FICO scores is 330-850.

Very few people drop low enough to reach 330 or jump high enough to hit 850. In fact, most people fall on the range of scores indicated below:

  • Excellent – 750 and Higher
  • Good – 700 – 749
  • Fair – 650 – 699
  • Poor – 550 – 649
  • Bad – 550 and Below

The other primary credit score group, Vantage Score, offers ranges from 300-850 and defines its tiers slightly differently:

  • Super Prime – 781 – 850
  • Prime – 661 – 780
  • Near Prime – 601 – 660
  • Subprime – 500 – 600
  • Deep Subprime – 300 – 499

As a result, it is important to check what company is determining your credit score to make sure you fully understand your range. It is also important to ask about the exact scoring method being used. There are currently over 1,000 different scoring methods used by these companies. Defining the exact type can help you better understand the nature of your score.

Q: What Exactly is a Credit Score?

A: A credit score is a three-digit number that summarizes your past credit and debt information in a simple and easy-to-understand way. It analyzes a variety of elements from your past to see how well you’ve paid off the debt. Beyond that, it also indicates the variety of credit you’ve held and how well you have managed it.

Low credit scores indicate someone who has perhaps been delinquent on a payment or who has a high amount of debt. It can also mean someone with a low diversity of credit types. Those who possess a 650 credit score or lower may have a harder time getting a loan because the lender may think they are likely to run into problems with this person.

The exact details used to define a credit score are simple to understand. They will be discussed in more depth in a later answer. They include your credit history, the length of your account, past delinquencies, your credit ratio, and more. Each is weighed with a slightly different percentage because lenders consider certain elements more important than others.

 Q: Why Did My Credit Score Change?

A: A credit score can change daily based on multiple factors. For example, missing even a single payment by just a day or two can drop your score 20-30 points. However, paying off a source of debt or consistently making payments over a year or two can greatly improve your credit. Your credit score will also change if interest rates are adjusted.

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Don’t be too worried about your changing credit score. Most of the time, a credit score will stay within a particular range for a person. However, missing a payment or taking out new sources of credit can significantly alter your credit and make it better or worse.

Q: What Factors Determine a Credit Score?

A: FICO determines a credit score using five different factors. These factors, including their weight percentage, include:

  • Payment History – 35 percent
  • Credit Utilization – 30 percent
  • Age of Accounts – 15 percent
  • New Credit – 10 percent
  • Types of Credit Used – 10 percent

Most of these terms are self-explanatory. However, credit utilization may be confusing. This term indicates the amount of credit you have free on your accounts. Utilizing too much credit will lower your score significantly. Try to aim for a utilization rating between 20-30 percent. Please note that these percentages change slightly depending on the different FICO scoring formulas utilized.

Vantage Score weighs their rating slightly differently. They use six factors to determine your score, including:

  • Payment History – 32 percent
  • Credit Utilization – 23 percent
  • Depth of Credit – 13 percent
  • Recent Credit – 10 percent
  • Available Credit – 7 percent
  • Balances – 5 percent

These factors are similar to those used by FICO. However, the amount of credit you possess is weighed a little heavier with Vantage Score. It also considers your recent credit and the variety of credit types more importantly. Please remember, though, that 90 percent of the scores you are likely to receive will be based on FICO.

Q: Why Do Credit Inquiries Decrease My Score?

A: Applying for some types of loans loan usually causes a hard credit check on your account. This kind of credit check goes into more depth on your score and is used in severe circumstances. As a result, credit scoring companies are going to decrease your score. That’s because they know people are checking it and concerned about your credit level.

However, many lenders are now turning to soft checks to avoid this problem. Soft checks don’t go into as much depth as hard checks. As a result, you won’t get penalized if this type of test is performed. Try to find a lender who uses only soft checks to avoid this concern.

This type of credit check is the type utilized by companies like Credit Karma. Any time you check your credit on these sites, a soft test is used. This fact means you can check your score whenever you want without suffering from a penalty. Keep that in mind, when deciding to apply for a loan or mortgage.

That said, some credit score formulas actually won’t penalize you for multiple hard inquiries in a short period. That’s because they have been designed to recognize that you are shopping for a vehicle or another type of loan. As a result, your credit score will stay at a consistent level. These types of scores are being utilized by more auto companies and mortgage providers every day.

Q: Do Preapproval Inquiries Affect My Score?

A: Preapproval inquiries are designed to help streamline the process of loan approval. They do a quick check of your credit to see if you are likely to be approved for a loan or credit offer. These types of tests are the softest and safest type to perform on your credit score. While they are the least invasive and comprehensive type, they can give you an idea of whether or not it is worth applying for a loan.

As a result, they will not affect your credit score in the slightest. However, applying for a credit source and being turned down after preapproval will affect your credit score. This situation can occur if the lenders take a more in-depth look at your score and decide that you are not a safe person for money lending purposes.

Keep in mind that being turned down for any new credit will adversely affect your rating. That’s because you are showing a history of being unable to secure new lines of credit. So if you are turned down for one loan, take some time to rebuild your credit before applying for another. These steps can help improve your chances of acceptance:

  • Making your payments on time
  • Decreasing the debt you owe
  • Disputing errors on your report

Q: Does Opening a New Credit Card Adversely Affect My Score?

A: Opening a new credit card can have a variety of effects on your score. Some of these results will be very positive. Others will be negative. Just a few of these effects include the following:

  • It Will Increase – Your available credit has increased, and your credit range type expanded.
  • It Will Increase – A new source of credit took a chance on you and improved your score.
  • It Will Decrease – You have too high of a credit account and are a potential debt risk.
  • It Will Decrease – Too many new cards showcase an impulsive use of credit.
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As a result, it is important to try to limit yourself to no more than two or three credit cards. This limitation should still give you a diverse range of credit you need to improve your score. However, you can also increase the spending limit on one card to boost your credit score temporarily.

That’s because you’ll suddenly have a lower credit usage rating. This change will temporarily increase your credit and give you a better score for lenders. However, you need to make sure to utilize this new credit source carefully, or you run the risk of worsening your rating by creating excessive debt.

Q: Can My Spouse’s Bad Credit Affect Mine?

A: If you are married to someone who has bad credit, your score shouldn’t be affected. That’s because they made those credit choices in the past and independent of you. This benefit is crucial to consider because it can help you avoid having to take on their debt after you get married. That said, taking on a new joint account after you get married may be problematic for your credit.

That’s because you now take on a source of their credit and assume their debt as your own. For example, if your spouse misses payments on a joint account, your credit score will also be affected. As a result, it is essential to take steps to ensure that your spouse behaves in a way that is beneficial for both of your credit scores.

In fact, it is not a bad idea to take on personal debt and create separate accounts if you marry someone with bad credit. While this doesn’t mean you should mistrust them or avoid helping them manage their credit, it may be better for you if you stay off their account. In this way, you can prevent any complications or worsened credit scores.

Q: Will Cosigning for a Loan Change a Credit Score?

A: Cosigning is the process of signing on for a loan to help someone with a poor credit score get approved. It is typically done as a way of ensuring that the loan amount will be handled if the person cannot pay for it. As a result, the person who is cosigning on the loan is taking on the responsibility of this new source of debt.

In fact, a cosigned loan will appear on your credit report as your debt. As a result, your credit score can be impacted. In some circumstances, it may be improved. That’s because you have expanded the type of credit that you possess. Ensuring that the person with the loan makes their payments on time can also increase your credit by showing a good repayment history.

However, it can also decrease your credit if the other cosigner fails to make a payment. Even worse, it can increase the amount of money you owe and severely impact your score. Make sure you talk to the loan officer about these changes before cosigning. It may not be in your best interest if it will negatively affect you more than it will benefit the person taking out the loan.

Q: Does Renting a Home Affect My Credit

A: People who rent a home or an apartment may not think that this affects their credit score. They are wrong. Renting any home will affect your credit score. Your rent payment is considered a type of debt that you must pay to live. As a result, your regular payments of it will be reported and considered a benefit to your credit score.

That said, it doesn’t affect your score as much as a mortgage payment. That’s because mortgages are considered a more secure form of debt. They are also a more long-term payment that showcases a person is dedicated to living in a specific home. As a result, those with a mortgage are usually considered a more reliable and stable borrower.

However, those who cannot afford to buy a home can still build their credit by renting or leasing one. Building up a high-quality score can increase your chances of being approved for a home. It will also help decrease the amount of interest you have to pay on the loan and avoid the kind of excessive repayment scheme that can shackle you to a mortgage for decades.

Q: How Long Will Poor Credit Information Remain on a Report?

A: Those who have made a few credit mistakes in the past are going to find that their errors can plague them for nearly a decade. That’s because even a missed payment or two can stay on your credit report for seven years. If you declare bankruptcy at any time, the results of this process will stay on your account for a full ten years.

Obviously, this means you need to avoid mistakes as much as possible to avoid this danger. However, consistently making your payments over a period of even a year can slowly rebuild your credit. Even better, once the negative information falls off of your report, you should see an immediate improvement in your score.

That’s why patience is so necessary when managing a credit account. While it is possible to continually make mistakes and create a terrible credit history, taking control of your debt can improve your score. Even if you’ve made some serious errors in the past and are afraid to check, a soft credit test may show that you are doing better than you thought with your score.

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Q: How Can Credit Repair Benefit Me?

A: Credit repair is a good idea for someone with a 650 credit score because it can help them improve their score. Beyond that, it also has the benefit of making it easier to obtain loans and other forms of credit. Credit repair consists of disputing mistakes, consolidating your loans, and repaying back debt as quickly as possible.

That said, it is essential to take the time to make sure that your credit dispute company is licensed to perform the tasks they claim they can for you. Most of these companies are fully-licensed and should offer you the help that you need to manage your credit more effectively. However, some companies may not have an attorney who can help you with this process.

If a company for credit repair does not possess an attorney, there is a good chance they cannot be trusted. Even worse, it is illegal to use this company to repair your credit. As a result, it is essential to take the time to check on the licenses of these groups before you decide to place your credit repair in their hands.

Q: Why Don’t I Have a Credit Score?

A: Anyone who has had a form of credit in the past should have a credit score. However, if you haven’t taken out a loan or own a credit card, you may not have generated enough credit to create a score. Those with a 650 score are better off than those with no credit because they have showcased a middling, but not awful, ability to manage multiple sources of credit.

Building up a credit score when you don’t have one requires getting a credit card and using it correctly. Using it occasionally and paying it off repeatedly can help to build a solid base for your credit that is easier to manage and which helps generate a score.

Answering Any Other Questions

If you have any more questions about credit scores or need help creating a repair plan, please don’t hesitate to drop us a line.

We can help discuss any confusion you may have about credit scores and make it easier for you to understand the unique demands they place on your finances. Make sure to talk to a credit repair specialist if you find yourself unable to pull your score out of the lowest range.

Where you can check your Credit Score for FREE

Here are a few ways:

Check your credit card, financial institution, or loan statement. Many credit card companies, banks, and loan companies have started providing credit scores for their customers. It may be on your statement, or you can access it online by logging into your account.

Purchase credit scores directly from one of the three major credit bureaus or other providers, such as FICO.

Use a credit score service or free credit scoring site. Some sites provide a free credit score to users. Others may provide credit scores to credit monitoring customers paying a monthly subscription fee.

In addition to checking your credit scores, it’s a good idea to regularly check your credit reports to ensure that the information is accurate and complete.

You can receive a free copy of your credit report from each of the three major credit bureaus at least once every 12 months by visiting www.annualcreditreport.com. If you find information you believe is inaccurate or incomplete, contact the lender or creditor. You can also file a dispute with the credit bureau that provided the report.

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About the Author

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Michael launched Your Money Geek to make personal finance fun. He has worked in personal finance for over 20 years, helping families reduce taxes, increase their income, and save for retirement. Michael is passionate about personal finance, side hustles, and all things geeky.

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