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If you have a 650 credit score, you aren’t alone.

This rating is one of the most common across the nation, and those who have it know that it creates a variety of lending difficulties. Thankfully, it is possible to improve your credit score past this subprime rating and get the loans that you deserve.

Unfortunately, few people understand how to reach that goal on their own. That’s why I’ve compiled the top 20 ways to improve your 650 credit score. With this information, you can get out of your credit rut and get back on track financially.

The Issue With a 650 Credit Score

A typical FICO score falls on a scale between 300 to 850. Very few people have credit that falls as low as 300-600. Conversely, almost nobody has credit that falls between 750-850. In fact, the average credit score in the nation is about 699, which is considered “good to great” credit. Those with a 650 credit rating are in an interesting spot because they are considered “fair.” Therefore, they shouldn’t have difficulty finding a lender. However, this rate can also be considered subprime by some lenders.

As a result, those with a 650 credit score often suffer from high-interest loans and may be required to pay more substantial down payments when applying for new credit sources. They aren’t likely to be turned down based on their credit score but will struggle to get low rates and down payments. As a result, it is essential for these individuals to take the time to improve their credit score as much as possible.

In fact, jumping even 50 points to 700 will place you in a position to receive better interest rates and an easier loan repayment cycle. An improvement of 50 points is something that about anybody can do on their own. That said, it will take some time and patience to reach that goal. However, it is more than worth it if you are planning on applying for a loan anytime soon.

The Top 20 Best Ways to Improve Your 650 Credit Score

Each of the following techniques has been carefully researched and confirmed by several different financial specialists. They will require a little work from the person who is performing them but should be easy enough to handle. Even a handful of these techniques will improve your credit score. However, doing all of them will improve it more quickly.

I suggest starting at the beginning of this list and going through it one suggestion at a time. In this way, you can find techniques that are easier for you to handle and which meet your unique credit situation. Even better, you can work your way up to more difficult methods and increase your chance of financial success.

1. Start With a Credit Report

The first step in the process is to get regular credit reports from a company like Credit Karma. These reports will indicate how much you owe, your payment history, your types of credit, the number of accounts you possess, and how long you’ve been using credit. It will also include your rating and give you an idea of where you stand with various lending firms.

A credit report like this is also a great idea because it will help you to execute your repayment plan and get started on eliminating your excessive debt. For example, you can use this information to pinpoint pressing debt issues and take care of them first. Then, you can move on to other concerns to ensure that you tackle all of your credit and debt problems without any issue.

Getting a credit report is also an essential first step because it will prepare you for the next few techniques. Beyond that, it can give you a better understanding of what you’ve done right and where you’ve struggled with your credit. After all, 650 is considered fair, so you’ve done some things right.

2. Spot Errors in Your Report

Don’t consider your credit report to be a perfect or legally-binding piece of information. There is a strong chance that millions of people across the nation have one or more errors on their credit reports. If you are one of them, it is important to take the time to address these issues. For example, you may spot a source of credit listed in your name that you don’t possess.

There is a chance that somebody with a similar name opened an account that got added to your credit report. However, there is also a chance that your identity was stolen and used to open new accounts. This situation is always frustrating because you are being punished for the actions of others. Even if these errors are minor, they will negatively impact your credit score. So make sure you check your report from front-to-back to spot any issues.

3. Dispute Errors

After you spot some errors on your credit report, it is possible and necessary to dispute them. You can do this in a few ways. First of all, you can contact the credit reporting bureau directly to talk about the errors. You will need some evidence that these errors are real to get them removed from your account. For example, you’ll need to use your bank account information to show that you made a timely payment on the account being reported as late on your credit score.

Beyond that, you can also reach out to the credit sources and learn more about the nature of the errors. In some instances, they are likely to be honest errors that are easily fixed. The moment you get erroneous information taken off of your report, your credit score should jump several points. The exact improvement will vary depending on the severity of the error. And if you get multiple errors removed, your credit will improve even more.

4. Set Up Automatic Payments

After you’ve disputed any errors with your credit sources, set up an automatic payment system that pays your bills on time every month. There are a few reasons you want to perform this step. First of all, your payment history makes up over one-third of your total credit score. As a result, avoiding late payments helps to improve your credit score by making you seem like a reliable borrower.

In some instances, you may even be able to reach out to your credit reporting bureau and get late payments removed from your record. Typically, this action will be successful if you have no more than one or two late payments on your history and have otherwise maintained a flawless repayment schedule. This technique is so powerful because it is progressive, meaning that your score will continue to improve slightly as you make your payments on time.

5. Pay Off Your Small Balances

While many credit reporting bureaus will prefer it if you pay off large balances as soon as possible, it may not be within your spending limits. As a result, it is essential to start out small and pay off those nagging smaller accounts. For example, if you owe $2,000 on a credit card, it isn’t a bad idea to drop a tax return on paying off a significant portion of it.

Paying off this account will not only help to improve your 650 credit score but free up more of your finances for larger credit balances. In fact, paying off these large balances can ultimately bump your credit scores by as much as 50 points if you reduce your balances and eliminate sources of debt.

6. Start Paying Those Large Balances

As hinted at above, paying off your largest credit balances is crucial for raising your 650 credit score as quickly as possible. For example, if you owe $10,000-20,000 on a single credit card, it is important to start paying it off as much as possible. Increase your payments as high as you can tolerate. This action will start eliminating not just interest payments but your principal costs as well.

However, it might take you 7-10 years to pay off that massive balance. That said, eliminating a small portion of your balance every year will increase your credit score. While it is possible to see an immediate jump of 50 points, as mentioned above, expect an initial leap closer to 10-20 points. That jump will occur in just a matter of a few months and will stay stable and even improve as long as you continue to pay off that hefty balance.

7. Schedule Your Payments Earlier in the Month

People often schedule their credit payments later in the month because they don’t want to deal with them earlier. However, this payment plan can be a significant problem that adversely affects your credit. That’s because report balances are typically created when the billing cycle ends, not when it begins. As a result, your score will reflect your accounts before you make any payments.

As a result, it is often a good idea to set up your payments earlier in the month. While this won’t necessarily immediately improve your score, it can add a few points to it throughout the year. It also creates a more accurate and realistic portrayal of your score. Make sure that you adjust your budget properly to ensure you have the money in your account to make these payments.

8. Keep Old Accounts Open

Closing old accounts is a mistake that many with a 650 score have made in the past. Most make this mistake because they paid off a source of credit and had no plan on using it again. This action is a major error for a few reasons. First of all, it eliminates the credit history you earned with that account. As a result, your report may indicate a shorter credit usage time. Don’t think that isn’t a big deal. The length of your credit history makes up as much as 10 percent of your score.

Even worse, it can impact your utilization ratio. Your utilization ratio indicates how much credit is available to you versus how much is not. For example, if you have a $10,000 credit card and owe $5,000 on it, your utilization ratio is 50 percent. Therefore, holding a credit account on which you owe nothing increases your overall rate and will boost your credit score. Also, make sure to use these accounts occasionally to improve your credit usage rate.

9. Remove Tax Liens

Tax liens occur if you have unpaid taxes on your account. These will stay on your record indefinitely if you never pay them, making them one of the most damaging items to have on your credit report. However, even if you pay them off, they will remain for about seven years. That said, the IRS has a program called Fresh Start that is designed to help people in tax trouble.

This program will remove tax liens from your credit report before your bill is paid off. It is designed to improve your financial situation and provide you with a little bit of help in tough times. Finishing this program can increase your 650 credit score by as much as 50-75 points in a matter of a few months. So consider this step if you have one of these liens on your account and can’t quite shake it.

10. Consider a Personal Loan

By now, you have taken quite a few steps towards improving your 650 credit score. In fact, you’re almost halfway through the list and should have an idea of how you want to start boosting your score. However, you need to start taking a more long-term approach to your credit management. Starting here, I am going to discuss a few important ways of consistently improving your credit for the rest of your life.

For example, taking out a low-interest loan to pay off your existing debt isn’t a bad idea in some instances. A personal loan for a fixed account may not be included in your credit utilization ratio, meaning paying off a majority of your accounts with one will significantly increase your credit score.

It also creates a simpler-to-make payment that you can more easily schedule and consistently hit. However, you should avoid taking this step using a credit card. That’s because credit cards typically have much higher interest rates than personal loans. As a result, your score is likely to decrease.

11. Consistently Keep Your Credit Balances Low

Credit balances are an important part of your score because they indicate your spending habits. Having a balance that is over 35 percent of your available credit is a major mistake. It will indicate that you are a problematic spender and make lenders less likely to give you money.

As a result, it is essential to use your credit report to calculate your credit usage ratio. Once you know where you stand, take steps to clear up some of your credit. Paying off smaller accounts can be useful as a first step towards freeing up some more available credit.

Once you have paid off a handful of your smaller accounts in this way, take steps to pay off your larger accounts and keep your usage ratio low. In this way, you can showcase better spending habits and impress the credit reporting bureau. As a result, they will consistently increase your credit score.

12. Open a New Line of Credit

If you are looking for a quick boost to your 650 credit score, open up a new source of credit. For example, a new credit card instantly increases your credit usage ratio and showcases a broader range of credit sources. However, this step is also wise for the long-term improvement of your credit.

That’s because you can use this new source of credit to build a stronger and longer history of credit usage. Keep the account open, use it occasionally, and pay it off when you get the chance. Creating a more diverse range of credit sources will help to boost your score gradually, but consistently, over a period of several years.

However, it is important to only get a new line of credit if you truly need it. Simply opening up a new credit account is excessive if you don’t end up using it. Just as importantly, it is crucial to avoid opening more than one new account every year. Too many new credit sources will make you seem reckless and decrease your score.

13. Separate Your Spouse Accounts

Married couples often have joint credit and debit accounts. In some instances, this can be beneficial. However, it is an issue if your spouse has problems with paying their bills on time. Even worse, it is an issue if they continue to open new accounts and add you to them.

Separating your accounts can help you focus on your financial needs and improve your score if your spouse has a weaker credit history than you. This separation doesn’t mean you should avoid helping them if they need you. Instead, break your accounts apart to ensure your credit scores are accurate and give them money if they need it.

For example, you could give your spouse $500 to put into their bank account to pay off some of their monthly bills. In this way, you are contributing to your joint financial success without affecting your personal credit. That said, this step may backfire if you don’t perform it properly. Talk to a credit specialist to ensure that it goes as smoothly as possible.

14. Limit Your Credit Inquiries

If you are interested in applying for new sources of credit, make sure that you try to limit yourself to only one or two during a year. That’s because multiple credit inquiries in a short time can damage your credit score. While it will typically take multiple inquiries before this becomes an issue, too many can drop your credit score 10-25 points overnight.

However, you don’t have to worry about multiple inquiries affecting your credit when you are shopping around for mortgages or car loans. That’s because your credit reporting bureau will see these related numerous inquiries as a regular part of the credit shipping process.

As a result, they will count all of them as merely one inquiry and won’t punish you for it. That said, applying for a mortgage, a car loan, new credit cards, and a personal loan all at the same time will count as multiple inquiries. As a result, it is crucial to make sure that you limit these activities as much as possible.

15. Talk to Your Creditors

Few people take the time to contact their creditors about changing their account. However, those with a 650 score should at least try this approach. That’s because it could end up adding a few points to your credit score. In many instances, your credit companies may be willing to adjust your interest rates if you perform simple steps, such as getting a co-signer or consolidating your debt.

Even better, they may be willing to decrease the amount you owe if you are willing to make a sizeable down payment. This strategy is designed to reduce your debt and give your creditors the money that they deserve from you. Often, creditors prefer this step because it gives them a large payment and helps to balance your account at the same time.

While a large down payment may be difficult to handle at first, it is worth it if it can significantly reduce your debt quickly and improve your credit score. A typical down payment consists of anywhere from $500 to $2,000. This amount will vary depending on how much you owe.

16. Don’t Go Bankrupt

Bankruptcy can be an advantageous process if you simply can’t get out of debt and need help getting back on track. However, it is a serious step to take and is one that will impact your credit score for years. The moment you file for bankruptcy, you will see your 650 credit score drop by as much as 50 points. Even worse, it will stay on your account for up to 10 years. This fact means it will continue to drag your score down like a millstone.

Unfortunately, there is little you can do to change this fact. As a result, it is essential to do what you can to avoid falling into a bankruptcy situation. Your creditors may be willing to tweak your payment cycle or even decrease your interest rates to prevent this problem. After all, they want to continue getting payments from you. When you file bankruptcy, they will get no more money from you until your bankruptcy grace period is over.

17. Increase Your Credit Limits

Here is an interesting fact to consider when trying to improve your 650 credit score. A recent survey found that nearly 90 percent of all consumers were able to increase their credit limits simply by asking their creditors for one. As a result, their available credit and credit usage ratio both increased.

Try out this tactic with each of your creditors to increase your credit score surprisingly quickly. Most companies are willing to perform this step. After all, an increased credit limit means they are more likely to get money from you. Try to avoid using this extra cash but instead use it as a booster for your usage ratio.

This step also improves your credit over the long term because it showcases a wise use of available credit. While you should try to use a little bit of this available credit, keeping a majority of it open shows that you are serious about keeping your credit at a balanced level.

18. Add Accounts to Your Credit Report

Most people aren’t aware that they can add long-term utility accounts to their credit report. For example, if you have had the same phone number for 10 years, you can add it to your report. And if you have consistently made all of your electrical and heating payments over the same period, putting them on your credit report increases your score.

That boost occurs because you have showcased positive and consistent payment patterns. It also increases the type of credit on your account and creates a more accurate portrayal of your payment history. However, it is wise to avoid this step if you have had issues with utility companies in the past and would rather not highlight them.

19. Continually Blend Your Credit

Adding new credit sources to your account should always be done intelligently. For example, possessing multiple credit cards won’t improve your credit diversity. That’s because it is the same kind of credit. Instead, you need to take the time to develop a wider range of personal credit sources to create a more blended and useful credit history.

For example, you could apply for a small personal loan and pay it back over a period of a year. This step adds a personal loan to your credit history and showcases a keen ability to repay. That’s because these types of loans fall under a heading known as installment credit, rather than revolving credit. This type of credit uses fixed payments that don’t change, which is different from the evolving and ever-changing revolving credit type.

In some instances, it may be possible to boost your credit score by as much as 15-30 points by taking this step and diversifying your credit. Just as importantly, it increases your long-term standing by creating a more abundant source of credit history. As a result, a successful personal loan will significantly increase your credit score over a period of several years.

20. Consistently Track Your Accounts

Performing all of these steps is a great way of increasing your 650 credit score quickly and over a long period. However, they are useless if you don’t take the time to track your account consistently. In fact, you must stay on top of every credit change that affects you. Unfortunately, a failure to track your account with regular credit reports will ensure that you fall back to a 650 credit range.

Beyond that, it is also important to stay smart about how you use credit. Don’t assume that you’ve fixed your credit and that it will remain healthy for good. Errors could always occur that will drag your credit to lower levels. Persistence, consistency, and vigilance are all essential for pulling your credit score out of the 650 doldrums and into the 700-750 range.

Final Thoughts

As you can see, improving your 650 credit score is not an impossible dream. However, it is also important to understand that it won’t be a simple task. Your credit score may jump several points when you start performing these techniques, but it won’t reach 700 overnight. In fact, it may take several months or even a year to reach that level and stay there.

So make sure that you stay patient during this journey and stick to your credit improvement plan. For example, you need to maintain these techniques consistently to ensure that your credit doesn’t dip again. You also need to make sure that you balance your budget and avoid the kind of excessive spending that probably impacted your credit score in the first place.

And most importantly, make sure that you talk to a credit professional to help you with executing any of these techniques. These skilled experts will help to streamline your credit improvement technique and can make it more efficient. With their help, you can jump past 650 as quickly as possible and get your credit in the low 700 range or even higher.

Resources

Experian: 650 Credit Score: Is it Good or Bad?

Bankrate: Seven Simple Ways to Improve Your Credit Score

Entrepreneur: 10 Ways to Improve Your Credit Score

CNN Money: 4 tips to Increase Your Credit Score Fast

The Christian Science Monitor: Eight Surprising Ways to Raise Your Credit Score

U.S. News: How to Improve Your Credit Score

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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