Is 617 a Bad Credit Score? What It Means & How to Fix It

A credit score serves as a numerical representation of an individual’s creditworthiness, indicating how reliably they manage financial obligations. These three-digit numbers are generated from information within credit reports, providing lenders with a snapshot of a borrower’s financial behavior. A 617 score falls within a specific classification, signaling a particular level of risk to potential creditors.

Understanding Credit Score Ranges

Credit scores typically range from 300 to 850, with common scoring models like FICO and VantageScore categorizing them into distinct tiers. For FICO scores, a range of 580 to 669 is considered “Fair” credit. Similarly, VantageScore models classify scores between 601 and 660 as “Fair” or “Near Prime.” A 617 score sits within this fair credit category for both systems. While a fair score is above the “Poor” or “Very Poor” ranges, it indicates a higher risk compared to “Good,” “Very Good,” or “Exceptional” credit.

Implications of a 617 Credit Score

A 617 credit score carries practical implications across various financial products, often leading to less favorable terms. While approval for products like credit cards, auto loans, and personal loans may still be possible, interest rates will likely be higher. Auto loan interest rates can increase for scores below the mid-600s, with average rates for new cars jumping from around 5.18% for excellent credit to 9.83% for fair credit. A fair credit score results in higher interest rates on personal loans, and options may be more limited.

Regarding mortgages, a 617 FICO score falls within the “Fair” range, which is considered subprime. While some conventional loans may require a minimum score of 620, certain government-backed loans, like FHA loans, can be accessible with scores as low as 580, sometimes even 500 with a larger down payment. Even if approved, a lower credit score will translate to a higher interest rate, increasing the total cost of the loan over its term. This higher cost extends beyond loans, affecting rental applications and insurance premiums, as these entities use credit information to assess risk.

Factors Influencing a 617 Score

A credit score of 617 is shaped by several components of a credit report, each contributing to the overall assessment. Payment history holds the most weight, accounting for about 35% of a FICO score. Missed or late payments, particularly those 30 days or more past due, can lower a score and remain on a credit report for up to seven years.

Amounts Owed and Credit History

Amounts owed, or credit utilization, constitutes about 30% of the score. A high credit utilization rate, especially when balances are close to or exceed credit limits, signals increased risk to lenders. The length of credit history, 15% of the score, considers how long accounts have been open and active. A shorter credit history or accounts with limited activity can contribute to a lower score.

New Credit and Credit Mix

New credit, including recent applications and newly opened accounts, makes up about 10% of the score. Multiple hard inquiries in a short period can temporarily lower a score, as it suggests a higher credit risk. The final 10% is attributed to the credit mix, reflecting the diversity of credit types, such as installment loans and revolving credit.

Steps to Improve a 617 Score

Improving a 617 credit score involves financial discipline focused on influencing factors. Making all payments on time is the most impactful action, as payment history is the largest component. Setting up automatic payments can ensure bills are paid. Reducing credit card balances is another strategy, aiming to keep credit utilization below 30% of available credit on each card and across all accounts. Lowering outstanding debt demonstrates responsible credit management.

Avoiding unnecessary new credit applications is beneficial, as each hard inquiry can temporarily reduce a score. While a diverse credit mix can be positive, opening new accounts solely for this purpose might not be the best approach if it means incurring new debt. Regularly reviewing credit reports from the three major bureaus (Equifax, Experian, and TransUnion) for errors is a step, as inaccuracies can affect a score. Disputing any identified errors can lead to their removal and a potential score increase.