What Is a Fair Credit Score?

Financial Credit Rating Scale - Illustration.

 Shivendu Jauhari/Getty Images

Your credit score is an important three-digit number used by lenders to determine how likely you are to repay your debts. The higher the score, the better, and generally you want one that’s “good” or “excellent.” If your score is considered “fair,” it’s not optimal, but don’t panic. You’ll probably still be able to get a loan, and there are many ways to improve your score.

What Is a Fair Credit Score and What Does It Mean?

A fair score on the FICO credit scoring system, the most widely used by lenders, falls between 580 and 669 on a scale of 300 to 850. With VantageScore, an alternative system, fair is 601 to 660.  About 17% of Americans have a fair FICO credit score, according to Experian, one of the three major credit reporting bureaus. Another 67% have a score of good or better.

So what does your number say about you? If your score falls into the fair range, it tells lenders to consider you a subprime borrower when you apply for a credit card, mortgage, or other type of loan.

Essentially, your credit profile doesn’t fit with a lender’s ideal borrower, and you are more likely, in its opinion, to default. Because of this, you may have to pay higher interest rates than applicants with higher scores, or you could even be rejected.

Keep in mind that scores are always changing. If you’ve got a fair credit score, the only thing separating you and someone with a good credit score might be some late payments.

For instance, people with a good FICO score of 680 might see a drop of 60 to 80 points—putting them into the fair category—if they have a 30-day delinquency after two other late payments in the past two years, according to Equifax, another credit reporting bureau.

Even within the same scoring systems, there may be slight differences between the scores from each of the three major reporting bureaus—Experian, Equifax, and TransUnion. Lenders may have reported slightly different information or given updates at different times.

How Are Credit Scores Calculated?

Your payment history is the single most important factor in calculating your FICO credit score.

Other factors include how much of your available credit you actually owe (how much of the limit you’ve exhausted on your credit card, for example,) how long you’ve had your accounts, how many different types of loans you have, and whether you’ve opened a lot of new accounts recently. Much of this information is in the credit reports each of the three major bureaus keep on borrowers. 

It may not seem fair that some late payments on a credit card could affect your score so much, particularly if it’s because you lost your job or got sick.

The good news is a fair credit score is far better than a poor credit score, which could mean you have to pay a fee or deposit to get a loan, if you can even get approved for one. If you’ve got a fair credit score, there are ways to improve it.

Tips to Improve Your Credit Score

  • Never make a late payment. Establish a budget so you have adequate income to meet your monthly debt obligations and always pay on time. It’s very important not to be even one day late. Set up auto-payments through your bank if it helps.
  • Don’t run your credit cards up to their limit. Lenders want you to keep your credit utilization—how much of your available credit you owe—under 30%. The best way to lower this ratio is by paying down your outstanding balances, but you can also increase your credit limits.
  • Don’t open a bunch of new accounts rapidly. If you apply for too many credit cards or personal loans, you may look desperate to lenders.
  • Understand which types of credit checks affect your score. “Hard” credit checks—when you apply for a new loan—can temporarily ding your credit score, though not by a lot. But when you check your own credit reports, or a credit card company pre-approves you for a new card, that’s considered a “soft” credit check, which won’t impact your score. 
  • Make use of Experian Boost. This is a program that lets you use utility and telephone/internet payments to show you pay bills on time. Opt in by giving Experian permission to connect to your bank accounts, and your score will be updated immediately. 
  • Make sure there are no errors on your credit reports. Request copies of your credit reports from all three bureaus. (You can access each report free of charge once a year at annualcreditreport.com.) If you find any errors, contact the company that made the error as well as the bureau where you find the error. Maybe your report shows late payments that were not actually late, doesn’t list accounts you actually have, or has an account being closed by the lender, rather than you. Be determined that these errors get fixed. 


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