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Good, fair or bad?
If you found your credit score to be 645, then you must be wondering, “Is 645 a good credit score?”. Here’s what you need to know.
There is no easy answer to this question. A credit score of 645 could be considered good or bad depending on who you ask. It is considered FAIR by FICO® and a POOR by VantageScore.
If you have a credit score of 645, you can take steps to improve your score and make it more likely that you will be approved for loans and credit cards.
These steps include paying your bills on time, keeping your credit utilization low, and adding positive information to your credit report.
Credit Score Ranges
Your credit scores are numbers calculated by credit bureaus, like FICO® and VantageScore.
According to the credit score model that was developed by Fair Isaac Corporation, also known as FICO®,
- Excellent: 800 to 850
- Very Good: 740 to 799
- Good: 670 to 739
- Fair: 580 to 669
- Poor: 300 to 579
And according to the other scoring model, VantageScore,
- Excellent– 750 to 850
- Good– 700 to 749
- Fair– 650 to 699
- Poor– 550 to 649
- Very Poor– 300 to 549
As you can see, although there is a slight difference in the ranges, the 645 credit score is considered “Fair” by FICO but “Poor” by VantageScore.
So is 645 a good credit score? Using the two main credit scoring models, a credit score of 645 is NOT GOOD.
But What Is A Good Credit Score?
The answer isn’t as simple as you might think.
As you can see above, there are a few different credit scoring models in use today, and each one has its own definition of a “good” credit score.
For example, FICO® scores range from 300 to 850, while VantageScore 3.0 scores range from 300 to 850.
According to FICO®, a score of 670 or above is considered good, while a score of 800 or above is considered excellent. However, VantageScore considers a score of 700 or above to be good.
Generally speaking, a good credit score is one that will allow you to qualify for the best interest rates on loans and credit cards.
However, there is no one-size-fits-all answer, as your credit score will also depend on other factors, such as your income, employment history, and credit history.
If you’re not sure where your credit score stands, you can check your credit report for free at AnnualCreditReport.com. This website is the only one that is authorized by the federal government to provide free credit reports.
You can also check your credit score for free on a number of websites, such as CreditKarma.com and CreditSesame.com.
Keep in mind that a good credit score is just one factor in the lending decision. Lenders will also consider your income, employment history, and credit history when making a decision.
So even if you have a good credit score, you may not be approved for a loan or credit card if you don’t meet the other lending criteria.
How Will A 645 Credit Score Affect You
Mortgage, auto, and personal loans are somewhat challenging to get with a 645 credit score.
Whether you’re looking for a personal loan, mortgage, auto, or credit card, credit scores in this range can make it difficult for you to get approved for unsecured credit.
It could even prevent you from renting an apartment or landing specific jobs.
And if some lenders choose to work with you, they typically charge high fees and steep interest rates.
But don’t panic; it is not the end of the world.
Credit repair is one of the best ways to rebuild your credit score and open up more opportunities.
Factors That Led To 645 credit score
Your 645 credit score did not just happen by itself. There are past actions that you may have done or did not do that fed your credit score.
Five main factors can affect your credit score, payment history, amounts owed, credit history length, credit mix, and new credit.
Therefore, the following common actions can hurt your credit score:
- Late or missed payments
- Accounts in collection
- Little to no credit at all
- Using too much available credit or maxing out your credit card
- Applying for a lot of credit cards in a short time
- Not having a good mix of installment loans and revolving credit
What Does Not Count Towards Your 645 Credit Score?
According to Experian, the following do not affect your credit score.
- Marital status
- Race or ethnicity
- Religious beliefs or affiliations
- Political affiliations
Expired financial pieces of information are also not included.
- Chapter 7 bankruptcy: 10 years
- Chapter 13 bankruptcy: 7 years
- Collection accounts: 7 years
- Late or missed payments: 7 years
- Closed credit accounts in good standing: 10 years
How to Improve 645 Credit Score
No matter the reason for your 645 credit score, you can immediately start improving how you handle your credit, leading to credit-score improvements.
There is no one way to build your credit; it will all depend on your credit profile.
Therefore, it’s always good to grab a copy of your free credit report from Equifax, Experian, and TransUnion to see the reports about you.
1| Evaluate Your Credit Report
Pull your credit report and dispute all negative, and get harmful items removed.
2| Get A Secured Credit Card
A secured credit card is one of the best ways to start rebuilding bad credit.
You place a deposit in the total amount of your spending limit. The deposit reduces the issuer’s risk, making it possible to get approved no matter how low your score might be.
3| Pay On Time
Making timely payments and avoiding late or missed payments favor credit-score improvements.
Use automatic payments, phone alarms, and other automated tools to help you remember.
4| Avoid High Credit Utilization Rates
You can help your utilization rate by keeping your balances low, which is below 30% of your credit limit. If you can, pay off your balance each month.
5| Consider A Credit-Builder Loan
This type of loan is available from credit unions and comes in several forms. The most common one is where the credit union deposits the money you borrow in a savings account. Your money is inaccessible to you, but it earns interest.
You can access the funds plus the interest once you have paid off the loan. It can be a great way to build credit if you make on-time payments and if the lender reports to all three national bureaus.
6| Establish A Solid Credit Mix
Not that you want to be in more debt, but a mix of revolving credit and installment debt can help boost your credit score.
7| Pay Down Your Debt
Create a debt payoff plan and start paying it off if you have outstanding debt. Lowering your debt-to-income ratio can have a significant impact on your credit score.
According to Investopedia, lenders prefer a debt-to-income ratio lower than 36%, with no more than 28% of that debt going towards servicing a mortgage or rent payment.
7| Reduce Hard Credit Inquiries
Although it causes a short-term negative effect on your score, new-credit activity can still contribute up to 10% of your overall credit score. Keep hard credit inquiries to less than 3 in 24 months if you can.
8| Give It Time
Your credit score does not improve overnight. Be patient. The items that are suppressing your score need time to fall off.
Hard inquiries fall off in two years while missed payments of collection accounts in 7 years. Bankruptcies can take up to 10 years.
Final Thoughts On 645 Credit Score
While a 645 credit score is not ideal, you can still do some things to improve your score. With a little effort, you can raise your score and get access to better interest rates and terms on loans and lines of credit.
And no matter what your credit score is, it’s also a good idea to check your score regularly. Knowing and understanding your credit scores and credit reports can help you make the right decisions in your financial journey.
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