Thrifty 650 – #1 Resource for Maximizing your 650 Credit Score

People who have a 650 credit score are very common.

In fact, this is probably one of the most common scores in the nation. As a result, there's a good chance you have this rating and don't realize it. While it isn't one of the worst credit scores, it is on the cusp of becoming a bad score.

As a result, you are in a unique situation because you have the chance of improving your score and avoiding common credit problems.

Millions of people across the nation are concerned with their credit score. That's because of this simple three-digit number influences so much of your financial future. A few bad decisions can severely impact your score and influence your life for decades. However, an even larger number of people don't' necessarily have a terrible credit score but a fair rating.

That's why we've compiled the information in this article. It will help you fully understand the nature of a 650 credit score and how it influences your life. You can also use this information to improve your credit score and avoid high-interest rates and other concerns. While it won't be an easy journey for you, it is one that is worth taking if you want to avoid dipping into a bad credit rating.

What is a Credit Score?

A Credit Score is a three-digit number that indicates your trustworthiness as a person receiving a loan. It helps to let lenders know how risky it is to lend to you and is influenced by a variety of factors. These include past financial decisions and your history with other credit sources.

If you have run into some financial problems, but have paid off some credit sources, you may have a better score than you think. Some of the most common influences on this rating include the following:

  • Payment history – If you paid your credit card or loan bills on time, you should have a solid credit rating. Failure to do so will drop it exponentially and could push it below 650.
  • Utilization rate – People who access their credit too often will decrease their credit score. They also affect their rate if they have very little credit left. Aiming below 30 percent is ideal because it shows lenders you aren't too reliant on credit sources.
  • Financial failuresBankruptcies, tax liens, and civil judgments against you can negatively affect your credit score. Winning in civil cases can improve your score, though. These situations may drop you below 650, but you can recover from them if given enough time.
  • Hard inquiries – When applying for a new form of credit from a lender or a credit card company, your score will decrease. However, inquiring about your score will not cause a problem. In fact, it's a good idea to make a soft inquiry into your credit score ASAP to see if you are at 650 or below.
  • Credit history – The types of credit accounts you've possessed in the past will influence your score. Using multiple credit sources and types improves your score. That's because you are showing lenders that you can be trusted with multiple financial sources.

There are a broad range of credit score ranges that we will discuss later. However, it is important to understand what a 650 credit score means. A credit score from 650 to 699 is considered “fair.” This score means that lenders won't consider you a serious risk for lending. The higher your score within this range, the lower the interest rates and payments you will receive.

However, dropping a single point to 649 will place you in the “poor” rating for credit. While most lenders are likely to be understanding if you are at 649, others may take a hard-line stance and either refuse to lend to you or set very high rates. As a result, it is essential to take steps to improve your credit and get out of the 650 range. It is also crucial to know that you aren't alone with a 650 credit score.

You're Not Alone With Your 650 Credit Score

People with a 650 credit rating often feel like they are alone or that they have the lowest possible credit score available.

However, that is not the case. In fact, credit bureau Experian has stated that about one-third of all people in the nation have a poor credit score. Even more troubling, a large number of people (about 10 percent) have no credit at all. This situation is worse than having a 650 credit score.

For example, people with no credit will be denied credit cards and loans because their rating just doesn't exist. People with a credit score below 650 will also suffer from a similar problem.

These statistics indicate that nearly 40 percent of Americans are at this level. So if you are at 650 or around that level, you are better off than many other people.

However, that doesn't mean you are in a perfect credit situation. People who have a 650 credit score are still on the cusp of having a poor credit score. One missed payment or bad financial situation can cause that rating to dip below an acceptable rating. As a result, it is essential to understand who calculates your credit score.

However, it is also important to know that there are more types of credit scores available than you might think. While most people know of at least one kind of credit score, several institutions can measure your rating. This situation can be a confusing one for many people to understand because you may receive multiple credit scores.

As a result, we are going to take a look at the different groups that affect your rating. That said, there is one group that is typically considered the most important one for determining credit levels. As a result, it is crucial to know how they define a 650 credit score and how it can affect your borrowing needs.

Who Decides Credit Scores?

The most important group for determining credit score is FICO or Fair, Issac, and Company. They created a credit score system in 1989 that is still used by a vast majority of lenders. In fact, they were the sole credit rating group in the nation for a very long time.

While they haven't determined the exact formula that they use to determine your credit score, they split it between payment history, debt burden, credit history length, types of credit used, and credit searches. All of these influences affect the quality of your credit and how well you will rate. Unless you have a weak financial history, you are likely to hit a 650 rate.

That's why if you have received a credit score in the past, you most likely got a FICO score. FICO and other scoring companies have set the 650 range ( or similar ones) as the level that lies on the cusp of poor and fair credit. While their formula has been adjusted and tweaked over the years, they have mostly maintained the same types of credit ratings.

However, there are other groups which measure your credit score. Getting a rating from them is advisable in certain types of situations. A few of the groups that also rate credit include:

  • NextGen Risk Score – This group is based on a model designed by FICO. When used, it has shown an increase in fair credit accounts by about five percent. As a result, it might not be a bad idea to get your credit tested using this formula if you are on the cusp of a 650 credit score.
  • FICO SBSS – Only small business applicants are evaluated using this method. For example, if you are looking for money to open a small bakery, this group will be used. It is different than other rating types because it ranges between 0-300. A rating of about 160 is equivalent to a 650 on the typical FICO score.
  • VantageScore – Other credit agencies created this system in 2006 to compete with FICO. The score range for this group is between 300 and 850. This range is the exact same type used by FICO. However, their formula varies and typically provides most users with a slightly higher one.
  • CE Score – CE Analytic published this score, which ranges between 350 to 850. As a result, its 650 level is pretty similar to VantageScore. Understanding these multiple ranges helps you better grasp the totality of your credit score more effectively.

While other groups give credit ratings, these are the most popular ones in the nation. That said, you should probably mostly be concerned with your FICO score. This rating is the one most used by corporations around the country. When we refer to a 650 credit score and its influence on your ability to borrow, this is the group we are discussing.

And to better help you understand poor and excellent credit, we will discuss the full ranges of FICO scores below. We strongly suggest referring to these ratings over others. While they have many benefits, FICO is the most nationally-accepted and highly-understood credit rating group in the nation.

The Nature of Credit Scores – And What They Mean

Using the FICO credit score system, you will be evaluated on a 300-850 rating.

Very few people fall as low as 300 on this level without serious mistakes. Only people who owe a lot of money, have failed to make payments on it, and who have an otherwise horrid credit history fall in this category. However, anything below a 650 credit score is considered poor credit. As a result, nearly 350 of the 550 credit ratings are considered very bad or poor.

This fact may seem unfair to you, but it is a system that has gauged credit risk successfully for years. That's why it is essential to understand all of the FICO credit levels that are available and how these will affect your ability to borrow. While it is possible that you can raise these ratings, it will take time and a lot of effort. However, it is essential to know these levels and to aim for them whenever possible.


Those who fall under this rating are considered a very high-risk proposition by lenders. You will fall into this range if you go bankrupt, owe hundreds of thousands of dollars with little hope of repayment, have tax problems, or other serious concerns that influence your ability to repay a loan or credit card. Thankfully, it is usually pretty hard to fall here from a 650 range. However, it is possible, so you need to make sure you take steps to avoid this danger.


People who fall in this 50-point range have poor credit and may struggle to get new sources. That said, they won't have nearly as much trouble as people fall into the range above. Many high-interest lenders will take a risk on you when others will not.

Successfully getting this type of loan and paying it off can raise your credit out of this level and help you rise to about 650. Even better, it can get you into even better rating levels.


This range is considered “fair” and usually suffers from little trouble getting loans or credit cards. However, you are likely to have to jump through a few hoops or pay slightly higher interest rates than you would with a better score.

Falling in this range is unique because it places you in a position for both success and failure. It will be much easier for you to get loans and, through careful management, get into the 700-850 range.


At this point, we are falling into the category of “good” credit. You won't have much difficulty getting loans at all from just about any lenders. The higher you rank at this level, the easier you will get loans. In fact, you are also likely to suffer from lower interest rates and decreased payment cycles.

Aiming for this level from a 650 credit score is wise because it can get you to the highest possible rating.


Not many people ever reach this level of credit excellence. At this level, you can pick and choose which lenders and rates you want to consider. You are considered risk-free and a sure-fire bet for repayment.

Once you reach this level, you should have no difficulty maintaining it unless you suffer from a surprising financial disaster or emergency. Falling from this lofty height is much easier than achieving this level.

Where 650 Stands Among the National Average

While all of this rating information is useful, it isn't as important as understanding where your 650 credit score stands among the national average. Currently, the average rating in the United States is about 695. While your 650 credit score is obviously below this range, it is important to understand that is still in the same category and is treated similarly.

However, that average is influenced by a variety of factors. For example, large businesses that have more capital typically have better FICO scores because they are more capable of paying back loans. Poor people who take out a loan for a car and struggle to pay it back are going to have a much lower rating. However, FICO weighs these scores in the same way, regardless of your current capital levels.

So if big business has a score of 825 and a person struggling to pay a car loan has a 550, the average between the two would be about 687. However, the national average isn't influenced by two ratings but by millions. An even more important influence on your 650 credit score is the current interest rate. Fully understanding this rate can help you better know why your credit score changes when interest rates are adjusted.

How Interest Rates Affect Your Credit

The Federal Reserve sets interest rates every few months and adjusts them based on the economy. These rates influence how much money is accrued when you are paying off loans and other types of credit. The Reserve will adjust its rates at various times depending on the financial health of the nation. Typically, higher interest rates indicate that the economy is doing well and more people can afford these rates.

However, decreased interest rates indicate a more impoverished economy in which credit is more difficult to obtain and maintain. Interest is typically assessed and changed every six weeks or so. While the level isn't adjusted every time the Reserve meets, it is often lowered or increased to help stimulate the economy. Understanding the effects that interest rates and their changes have on your credit is essential for making sure you make wise investment decisions and get out of the 650 range.

Good Ideas When Interest Rates are Rising

Your 650 credit score will be affected by increased interest rates in a few ways. For example, a score may decrease if a loan taken out before an interest rate increase is affected. That's because your lenders may believe that you are now a higher risk person. This situation can be very frustrating because you did nothing to change your score but were punished anyway.

That's why fixed-rate loans are such an excellent concept to understand when you have a 650 credit score. You shouldn't have a hard time obtaining one of these loans with a 650 rating. Fixed-rate mortgages are a great idea because they won't be affected by changes in interest rates. As a result, your 650 credit score is less likely to drop to 649 or lower. Most home and car loans are of this type, making them easier to obtain.

In some instances, you may be able to pay a little more to fix your rate for 5-10 years. This idea is great if the economy is strong and is continuing to rise. You may even be able to claim deductions for your fixed-rate loan when you do your taxes. Make sure to get one of these loans before the interest rate increase goes into effect. If you don't, you will be locked in at a higher rate.

How to React to Lower Interest Rates

When lower interest rates are in effect across the nation, your credit may rise slightly. That's because lower interest rates are less likely to increase your payments beyond your repayment abilities. During this period, it is also wise to consider refinancing a loan for a home or a car. That's because you can get them set at this lower interest rate and end up paying a lot less money than you would have for your loan otherwise.

Another good step that can help you maintain or improve a 650 credit score is to get an adjustable-rate mortgage. This choice is wise if interest rates are falling and are likely to stay low for a longer period. Loans of this type are the opposite of fixed rate. As a result, continually-decreasing interest rates will decrease how much you owe on your loans or credit. This change will boost your credit score and help you afford more difficult payment schedules you may not have been able to afford otherwise.

Many people will also take out a fixed-rate home equity loan during this period to pay off high-interest loans. For example, you could take out a home loan to pay off credit cards that are locked at higher interest rates. Securing your interest rate at this level is wise because you will end up paying less money over an extended period. Make sure to talk to your financial advisor before making these decisions to avoid an error that will drop your score from 650 and into dangerous territory.

The Takeaway Here

Interest rates will affect your credit score, and substantial changes must be carefully anticipated before making any investment decisions. While a rate increase lower than one percent isn't going to affect you much, rates often increase slowly over a period of a year or two. They can also decrease in the same way.

As a result, it is essential to make sure you adjust your credit to keep it either within a 650 range or work to improve it. Two of the best ways that you can do that is to take out a car loan or a new credit card. You can apply for and receive these financial items with a 650 credit score. However, you need to take essential steps to make sure you don't pay too much or fall too low on your credit rating.

Getting a Car Loan With a 650 Credit Score

While you can easily get a car loan with a 650 credit score, you will pay more interest than you would have with a higher score. Some estimates claim that you are likely to pay as much as 4.5 percent more than you would have with a score higher than 700. How much will this affect the amount that you pay back over the life of a vehicle?

Let's say you have a 650 credit score when you buy a $13,000 vehicle with an interest rate of 10 percent. After making your down payment of $3,000, you owe $10,000 over a seven-year period. Without interest, you would be making payments of $119 per month during that period. However, an interest rate of 10 percent would be added to each yearly payment.

That would be an extra $1,000 per year or $83 per month for a repayment amount of about $202. This level will also be affected by other factors, but let's just focus on this amount for the sake of simplicity.

By contrast, an interest rate of 5.5 percent (or 4.5 percent lower than 10) earned with 720 credit would be worth $550 per year or an extra $45 per month. This rate would create a monthly payment level of about $164. Multiply that out over a seven-year period, and you have paid $13,776 over the life of that loan. However, at the 10 percent rate set for a 650 credit score, you'd pay $16,968.

That is nearly $3,200 extra payment for the same loan. That extra money is just cash flowing out of your pocket and into the bank account of your lender. As a result, it is essential to make all your payments on time and to work to improve your credit score. Beyond getting a car loan for this need, we strongly suggest getting a credit card or two.

Applying for a Credit Card With a 650 Credit Score

Credit cards are a great choice for people with a 650 credit score because they allow you to set your repayment schedule. For example, let's say you get a $2,000 credit card and use it to make occasional grocery purchases. By repaying your credit card every month, you are improving your credit score. That's because you are showcasing the ability to pay off what you owe and impressing FICO's credit score experts.

While the increase will be less intense than if you pay off a car loan, every little bit will help you here. Even boosting your rating up to 670 will help you out because it will get you into a score considered average or fair. From this point, it is possible to refinance your loans or credit card payments and avoid running into more difficult payment levels.

If you fall into the 650 credit score range and want a credit card, you should take the time to choose one that is right for your unique needs. We have compiled a list of possibly useful credit cards that suit the needs of people like you. These cards are designed for people with fair or average credit who are looking to boost it to even higher levels:

  • Discover It Miles – People who like to travel should invest in this credit card. It has no annual fee and will give you back 1.5 percent for every dollar that you spend. You can also use this rebate for gas or other travel expenses. Quickly paying this card back will also improve your credit score.
  • Southwest Rapid Rewards Plus Card – Here is another travel card that is good for people who want to raise their 650 credit score. It is designed to provide you with airline miles every time you travel. Using these miles helps to improve your credit by showcasing your ability to take advantage of credit rewards.
  • Discover It for Students – If you are a student who is struggling to build credit, this is a great choice. It provides you with five-percent cash rewards for the first $1,500 of purchases you make with this card. For students who are settling into a new apartment in a new town, these rebates are great and can help make it easier to pay off your card.
  • Cash Back: Chase Freedom – Users who get this credit card receive rewards as high as five percent on their purchases. It is one of the few cards of this type available for people with a 650 score. It is a great choice because it builds your credit while offering you the kind of rewards that are typically only available for people with scores over 700.
  • Capital One Spark Classic for Business – New business owners with an average credit score often choose this card. While it doesn't have the best cash reward (just one percent), it is one of the few cards of this type available for business owners with a 650 credit score. It also lets you set up employee credit cards for your business, allowing you to increase your score in the process.

Try to get at least two of these cards for your credit-building needs. That's because being able to pay on multiple sources of credit showcases your financial stability. It also creates a stronger history that makes your credit stronger without costing you a lot of excessive money.

That's why any of these credit cards are an excellent investment for someone who is looking to improve their credit score from a 650 level. However, they are just one way that you can improve your rating quickly and efficiently. There are several other methods that you should consider, which we will discuss below. Understanding these processes can get you out of a 650 credit score rut and into the higher echelon of credit success.

How to Raise Your 650 Credit Score

While having a 650 credit score is fine, you are on the cusp of falling into a poor credit level. That's why it's a good idea to work towards improving your credit score. The following tips will boost your credit level naturally and help you move out of the 650 range:

  • Check your credit report – By paying special attention to your credit report, you can spot any problems or errors that may occur.
  • Dispute real errors – Credit companies aren't always perfect. If you find that an error has occurred, you need to dispute it right away. This act will help avoid a decreased rate and showcase your financial skills.
  • Pay on time – We can't emphasize the importance of paying your bills on time every month. Missing even a single payment or paying a few days late can severely impact your credit score and even drop it from 650 to 648. That's a drop from “fair” to “poor” and must be avoided.
  • Refinancing your payment – A good refinancing process can help to decrease the amount of money you owe. It may set you with tougher interest rates, however, but can increase your credit score by eliminating a heavy financial burden.
  • Talk to a credit counselor – A professional counselor can set you up with a repayment cycle that meets your credit needs without overburdening you. It also helps improve your score by showing your seriousness about repaying your debts.
  • Work towards repayment – Shifting your debt from lender to lender is appealing to many people. In some instances, it may help stave off higher interest rates. However, you should still strive for repayment. Nothing will improve your credit score like fully paying off debt.
  • Limit your credit cards and usage – While we mentioned getting a few extra credit cards can give you more credit, adding too many will decrease your score. We suggest no more than two or three or so. You also need to make sure you limit them to occasional purchases and repay them immediately.

Learning More Your 650 Credit Score

By now, you should have a pretty solid grasp on the nature of a 650 credit score and the unique place it positions you. While you can live comfortably with 650 credit, it is very easy to fall to a lower score if you aren't careful. Even worse, you might miss the chance to improve your rating to a higher and more beneficial level.

Don't be afraid to take your rating into your hands and to improve it. You'll have to work hard and carefully watch your finances to reach this goal. Budgeting is a new skill that you may need to learn. Staying within your budget can help you make your payments on time and keep your credit score stable. You can then take steps to improve it even further.

By following these steps, you can improve your credit and make it even better than it would have been otherwise. This improvement gives you the opportunity to get better credit cards, higher-quality mortgages, and to improve your lifestyle. And if you know someone who has a 650 credit score, please share this article with them.

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Michael launched Wealth of Geeks 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.