What Does A 644 Credit Score Mean And How It Affects Your Life
A credit score of 644 is considered poor, however, it will still get you an auto-loan, some types of credit cards, a home loan and even a personal loan, especially from online lenders. The score, however, will impact your finances negatively as your credit report will indicate to the lenders that you have a high risk of defaulting your debt. Therefore, creditors and lenders will often approve the above but with very high interest rates as compared to those with fair, good and excellent scores. Basically, a 644 FICO credit score is likely to cost you highly in the long run.
Improving your 644 credit score by 50 or 100 points
The journey towards achieving a positive rise in your credit score is usually a long one and may take quite some time to complete. It is therefore quite important that you brace yourself for a long way ahead and stay focused on this goal. However, this isnt to alarm you as youll soon be able to reap the fruits of it. As your 644 credit score rises, you will progressively be able to get your loan requests approved and even qualify for credits on much better terms. Any negative information on your credit report will also be cleared by your local credit bureau with time and youll then be able to get that job you wanted or get that mortgage or even get an auto loan at lower interest rates.
How To Improve Your Credit Score
The steps you can take to rebuild your credit score fall into two categories:
- Short-term credit fixes: Things you can do right now to improve your score in the short term
- Long-term credit fixes: Things you can do to help your score slowly improve in the long term 5
Ultimately, how long it will take to repair your credit depends on your credit history, your personal finances, and the decisions you make.
What About Transunions Credit Score
TransUnion uses the VantageScore® 3.0 model, but the above way of looking at it still applies: two different lenders may have completely different opinions on what a good-enough TransUnion score is. And since lenders may use several different sources of information to evaluate an applicants creditworthiness, one lender may view two separate applicants differently, even if those applicants have the exact same TransUnion score under consideration.
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How To Repair A 644 Credit Score
The first step to repairing a credit score of 644 is typically addressing the more serious risks to long-term financial health. This means prioritizing loans in default, completing repayments due to collections agencies, and avoiding bankruptcy.
Repairing a Fair credit score also means practicing healthy financial habits. Eliminating unnecessary monthly transactions and making full, on-time payments before credit deadlines can help you improve your payment history and lower total debt.
Youll also want to reduce hard inquiries by limiting active lines of credit to minimize your number of necessary payments per month and increase your credit age.
If you notice any inconsistencies in a credit report, consider the help of a credit repair agency before these errors manifest in overall credit rating decreases. The best credit repair agencies will even communicate with credit companies and lenders on your behalf, to rectify any inaccuracies in your financial records.
Lender Overlays Can Change Credit Score Minimums
In theory, a credit score of 640 shouldnt block you from getting a mortgage. But even if a loan program is OK with your credit score, the lender itself may not be.
Lenders and their investors get to decide for themselves whether to approve a borrowers loan application even if the borrower meets the loan programs minimum requirements.
Some lenders simply set their minimum credit score higher to avoid loaning money to someone they consider risky. In addition, conventional loan lenders use riskbased pricing, which means they charge higher interest rates for lower FICO scores.
Lenders can add additional overlays to their loans, such as requiring extra cash reserves or larger down payment for loan approval, or charging a higher interest rate or higher fees to borrowers with fair credit.
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Avoid A Card With An Annual Fee If You Can
If a card has a particularly large annual fee, in combination with a low credit limit, it will effectively reduce that credit limit. It will also increase the likelihood youll be carrying a balance and making interest payments.
Some of the cards weve included on our list do have annual fees, though all are below $100. Its best to avoid these if you can, but if not, just be aware that it will raise the cost of improving your credit score.
How We Came Up With This List
We started by isolating the cards known to be available to those in the 600 to 649 credit score range. From there, we considered the features that would make it most valuable to people in that credit score range, based on different credit factors.
Those factors include:
- The issuer reports to all three major credit bureaus TransUnion, Experian and Equifax giving you an opportunity raise your credit score with all three
- Secured or unsecured credit cards secured may be necessary for those at the lower end of the fair credit score range
- Low or no annual fee
- Offering the ability to increase your credit line as your payment history warrants.
- Card features, like rewards and other benefits, if offered
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Even Obtain Free Copies Of Credit Reports
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How To Choose A Credit Card For Fair Credit
The best way to use a credit card for fair credit is to make a small amount of monthly purchases and pay your charges in full each month.
The interest rates on these cards may be higher than on credit cards designed for consumers with good credit, so youll want to avoid using them to pay off purchases over time.
As your credit improves, youll be better qualified to apply for a card with a lower rate or higher rewards in the future.
Look for cards that offer lower annual fees or some rewards that can offset an annual fee.
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A 644 Credit Score Is Generally A Fair Score While A Lot Of People Have Fair Scores You May Still Find It Difficult To Get Approved For Credit Without High Fees And Interest Rates With A Score In This Range
|Percentage of generation with 640699 credit scores|
Fair score range identified based on 2021 Credit Karma data.
Credit scores are numbers that lenders use to help decide how risky you might be to lend to. Higher scores signal to lenders that you may be more likely to pay back any money you borrow. Even though a fair credit score can be relatively middle-of-the-road, having fair credit can make it tough to qualify for certain loans and credit cards. You may find that youll need to pay more in fees or agree to higher interest rates in order to access these and other types of credit products.
But how can you tell exactly how good your credit is? Its a little complicated. For starters, you dont have just one single credit score. Its much more likely that you have many different credit scores generated by many different credit-scoring models.
The most widely recognized credit scores, like those developed by FICO and VantageScore, usually fall in the 300 to 850 range. But some scores use different ranges. Credit-scoring models rely on a variety of factors to calculate your scores, drawing on credit-report data from the three main consumer credit bureaus.
Understanding your credit scores is one of the first steps to building your credit. And building your credit could help you access better terms and rates when you need to borrow money whether for a car, a house or even your next credit card.
Personal Loans For Credit Score Under 664
While it is not guaranteed, one with fair credit may be a potential candidate for a personal loan. Of course, it will be more difficult for one with fair credit to receive a personal loan than for one with good or excellent credit. Fortunately, one with a 664 credit score may still be able to qualify for unsecured loans with affordable rates and payments. Still, those with fair credit will have generally higher interest rates for loans than their good and excellent credit counterparts, but some lenders may provide greater flexibility.
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Understanding Your Credit Score
Your credit report is an essential part of getting your credit score, as it details your credit history. Any mistake on this document could lower your score. Its easy to check your credit score, and youre entitled to a free credit report from all three major credit reporting agencies once a year.
Its good practice to stay on top of your credit score and check it often for any errors to ensure youre in the best possible position. From there, you can assess your options for a conventional or government-backed loan and, when youre ready, apply for a mortgage.
How To Improve 664 Credit Score
With a credit score of 664, youre already on the right track to receiving good credit. It all lies, however, with the efforts you put in to physically improving your score. The following suggestions will be important if you wish to turn your fair credit into good credit:
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How Long Does It Take To Fix A Fair Credit Score
How long it takes to fix a score of 644 will depend on various factors. If you have accurate negative items on your report, such as a collection account, these items can stay on your report for up to seven years. Until these items fall off your report, itll be much more challenging to see significant increases in your credit.
On the other hand, if you dont have anything serious bringing your score down, a few months of on-time payments and responsible financial patterns can result in a relatively quick improvement in your score.
As we mentioned earlier, a fair score is only a few points away from a good credit score. If you take the right actions, your score might improve to the good range within a few months.
Average Mortgage Rates For A 640 Credit Score
With strong credit, you may qualify for a mortgage loan and receive a better interest rate.
The table below shows a sampling of rates from our partner lenders. You can fill in your financial information and select a credit score range of Fair to see what kind of mortgage rates are available to you in your area.
The rates in this table display an annual percentage rate , which includes the loans interest rate plus any fees and extra costs charged by the lender.
Someone with a credit score of 620, on the other hand, might get an APR of 4.244%. Their monthly payment would be $983, which is a difference of $63 per month or $22,680 over the life of the loan.
While you should focus on getting your credit score as high as possible, you dont need to be perfect. Improving your credit score by just a few points might put you in the next credit score range and give you access to better rates.
Enter your loan information to calculate how much you could pay
You have some control over some of these factors:
Comparing rates from different lenders is one way to find a great rate. Credible makes it easy to compare interest rates on conventional loans from multiple lenders. You can see prequalified rates from all of our partner lenders, and the process can be completed fully online.
Credible makes getting a mortgage easy
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Credit Score Car Loan Options
You should be able to get a car loan with a 644 credit score without a problem. Truthfully, people can get a car loan with almost any credit scorethe difference will be what kind of interest rate you can secure.
A score of 644 may get you an interest rate of between 11.92 percent and 4.68 percent on a new car loan. In comparison, if you can improve your credit score by a few points and move up to the good credit score range, your interest rate can potentially decrease by a decent amount.
If youre having difficulties getting approved for an auto loan with a 644 credit score, your best alternatives are:
- Find a cosigner
- Save up a large down payment
- Find a lender that specializes in lending to individuals with bad credit scores
Life With A 644 Credit Score
Unless your low credit score is a mistake caused by major errors on your credit report, you might remain in the fair range for at least the next few months.
Until your score improves, avoid taking out any unnecessary loans to ensure that you wont sabotage your progress by accumulating debt that you cant pay off.
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Why Is A Good Credit Score Valuable
Now you know a little about where scores come from. But that doesnât explain why good credit scores are so valuable. Credit scores are often associated with credit card or loan applications, but their influence goes beyond that.
Good scores can affect interest rates, credit limits, housing applications and even job prospects. And they can offer more options, more bargaining power and more financial flexibility.
Pre-Approval, Pre-Qualification and Comparing Offers
For starters, you may be pre-approved or pre-qualified for more credit card offers if you have a good score. That may allow you to compare offers and find the best fit for your situationâwhether youâre looking at mortgages, credit cards or auto loans. But if youâre shopping around, be sure to understand how credit inquiries can affect your credit.
Interest Rates and Credit Limits
If youâre approved for a loan or a credit card, a good credit score could mean higher credit limits, lower interest rates or both. And when youâre paying less in interest, you may have smaller payments and be able to pay off your debt faster. In general, that means that higher credit scores could decrease the cost of borrowing money.
Beyond Credit Cards and Loans
Finally, good credit scores could affect other parts of your life, too:
From Fair To Anywhere: Raising Your Credit Score
A FICO® Score in the Fair range typically reflects credit-management problems or mistakes, such as multiple instances of payments that were missed or paid 30 days late. Consumers with more significant blots on their credit reports, such as foreclosures or bankruptcies, may also see their FICO® Scores rise from the Very Poor range into the Fair range once several years have passed after those events.
The credit reports of 42% of Americans with a FICO® Score of 644 include late payments of 30 days past due.
If you examine your credit report and the report that accompanies your FICO® Score, you can probably identify the events that lowered your score. As time passes, those events’ negative impact on your credit score will diminish. If you’re patient, avoid repeating past mistakes, and take steps that can help build up your credit, your credit scores will likely begin to increase.
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How To Go From Good To Great
To borrow from Leo Tolstoy, all great credit scores are alike, but all bad credit scores are bad in their own way. That is, ideal credit scores are built on a similar set of healthy financial habits, but your scores can be damaged by any number of factors. There are many different issues that can hurt your credit, such as:
Late or missed payments. Too many open credit accounts. High credit card balances. High balances on loans. Too many credit applications.
The first step toward improving your credit health is avoiding getting trapped in the highs and lows of managing your credit.
Heather Battison, vice president of TransUnion Canada explains how consistency is key: The most important factor for building and maintaining your scores is to pay your bills on time and in full each month. This activity demonstrates your ability to responsibly manage credit and can positively impact your credit scores.
Its also key to remember that your payment history isnt just about paying your credit card bill. It also includes things like your cellphone bill, says Trevor Gillis, associate vice president of account management at TD Credit Cards.
Gillis says building good credit scores is based on using your credit card responsibly, which means making at least the required monthly minimum payment , making your payments by the payment due date and keeping your credit card utilization low.
Paying Your Bills On Time
While paying each of your bills on time may seem like the most obvious way to improve your credit score, its also the most important one. There is nothing that will harm your credit score as much as having a series of late payments on anything from car loans to mortgage loans. This is why it is extremely critical that you always make the minimum monthly payments by the determined date each month WITHOUT ANY EXCEPTIONS.
Even skipping just one mortgage payment is going to have a detrimental effect on your credit score. Sorry if that sounds cruel, but its the truth, and it should serve as your primary source of motivation for making your payment on time.
Heres an important fact to keep in the back of your mind: every time that you fail to make a monthly payment when you are required to do so, whether it be on a car or your home or anything else, it will be on your credit history and thus impact your credit score for up to seven years. Seven years. Think about that.
Now, one primary benefit to using a credit card here is that you can choose how much money you spend while using them, and then also determine how much you pay back each month, so long as that amount is equal or greater than the minimum payment you owe.
The reason why this is a benefit to you is because it allows you to budget your money accordingly and make the smartest financial decisions you can. In other words, you can avoid going into serious debt.
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