A 645 credit score is neither good or bad. Instead, it’s considered fair. People with fair credit scores often have to deal with higher fees and interest rates than those who have good credit scores. Even so, a 645 credit score might be better than you think — it’s within striking distance of the good credit scoring range.
How Far Away Is a 645 Credit Score From Good Credit?
A good credit score is a score of at least 670, which is only 25 points away from a score of 645. Although 25 points doesn’t sound like too much the factors that equal a 670 score will vary.
Factors such as the type and amount of negative information on a credit report can be different from person to person.
For example, if a 645 score is due to a credit reporting error, an error can be corrected fairly quickly. If a 645 score is due in part to several valid late payments noted on one credit card accounts, those, late payments hang out on credit reports for seven years.
Credit and Loan Options if You Have a 645 Credit Score
Because scores in this range are considered fair, you should be able to qualify for financing offers from traditional creditors and lenders, but don’t expect the best rates.
You also won’t be able to get any credit card you desire, but you can likely get approved for an unsecured card, as well as a car loan or a mortgage. A personal loan or apartment rental approval are also possibilities.
Factors of Credit Score Calculation
1. No collections
Accounts in collection status are a negative score factor. Creditors may route collection actions to a third party or an internal collection department.
2. Inaccurate information
If you take the time to order and review your credit reports from each of the three credit bureaus, you might find errors that are damaging your credit score. If you do, take note that such errors can cause a lower score.
3. Credit utilization
Your outstanding debt counts as 35% of your overall credit score, and how much credit you’re utilizing is part of your debt. Credit utilization is the amount of credit you’ve used compared to the amount of credit you have.
Making larger payments or paying twice a month on your accounts will help reduce your credit utilization.
4. Payments – On Time Everytime!
Payment history carries the most weight — 40% — when it comes to your credit score.
Although 30- and 60-day-late payments impact your scores, they aren’t as damaging as a 90-day late payment. And recent late pays, within the last two years or so, are usually more damaging than isolated late pays that happened in the distant past.
To avoid missing payments, consider setting up payment reminders or automatic drafts from your bank account.
5. Positive Credit History
Depending on what type of obligations you currently have, you may want to consider opening a secured or unsecured credit line or applying for a credit-building loan through a credit union.
A new account or loan can show that you can handle funds responsibly and make payments on time. This can contribute to positive credit history.
One Step You Should Take Now
Get access to your credit reports and scores by signing up for a product that provides that information to you on a regular basis. If you’re able to monitor your credit closely, you can pinpoint issues and determine if you need to take action.
Plus, if your credit report ever contains an error, you’ll have the advantage of realizing it more quickly than if you don’t monitor your credit.
Are you ready to take control? Let us know in the comments!