Is a 635 Credit Score Good or Bad?

A credit score serves as a numerical representation of an individual’s creditworthiness, summarizing their credit history and behavior. This three-digit number, typically ranging from 300 to 850, is widely used by lenders and other entities to assess the likelihood of a borrower repaying their financial obligations on time. Companies utilize these scores to make informed decisions regarding loan approvals, interest rates, and credit limits for various financial products. The credit score acts as a predictive tool, offering a quick snapshot of financial responsibility based on the information compiled in credit reports. A higher score generally indicates a lower risk to lenders, potentially leading to more favorable terms.

Decoding Credit Score Ranges

Credit scores are primarily calculated using models developed by FICO and VantageScore, the two most common scoring systems in the United States. While both models aim to assess credit risk, they utilize slightly different methodologies and weighting of factors. Most FICO and VantageScore models produce scores within a range of 300 to 850.

For FICO Scores, the ranges are generally categorized as: Poor (300-579), Fair (580-669), Good (670-739), Very Good (740-799), and Exceptional (800-850). A 635 FICO Score falls within the “Fair” category, indicating that it is below the average credit score. Similarly, VantageScore models, such as VantageScore 3.0 and 4.0, also use a 300-850 scale. Their typical categories are: Very Poor (300-499), Poor (500-600), Fair (601-660), Good (661-780), and Excellent (781-850).

Consequently, a 635 credit score is considered “Fair” under both the prevalent FICO and VantageScore models. This signifies that while it is not the lowest possible score, it positions an individual as a higher-risk borrower in the eyes of many lenders. Approximately 17% of consumers have FICO Scores in the Fair range (580-669), and about 27% of consumers in this range are likely to become seriously delinquent on payments in the future. Therefore, a 635 score suggests a mixed credit history, potentially with some past credit management issues.

Implications of a 635 Score

A 635 credit score carries practical implications across various financial aspects, often resulting in less favorable terms compared to those with higher scores. Lenders perceive individuals with a score in the “Fair” range as having a higher risk of default. This elevated risk typically translates into higher interest rates and potentially stricter approval criteria for credit products.

For significant purchases like a home, a 635 credit score can lead to higher mortgage interest rates. While it may be possible to qualify for certain mortgage types, such as FHA loans which have more lenient requirements, conventional mortgages often require a minimum score of 620. Borrowers with scores in the 620-639 range could pay significantly more in interest over the life of a loan compared to those with excellent credit, potentially adding tens of thousands of dollars to the total cost of a $300,000 mortgage.

Securing an auto loan with a 635 score is generally feasible, but it will likely come with a higher Annual Percentage Rate (APR). For example, in the first quarter of 2025, borrowers with scores in the 601-660 “Near Prime” range faced an average new car loan interest rate of 9.83%, compared to 5.18% for those with “Superprime” credit (781 and above). This difference in interest rates can amount to thousands of dollars in additional costs over the loan term. Credit card approval for a 635 score is possible, but offers will likely feature higher interest rates, potentially around 16.5% to 20.5%, and fewer benefits compared to cards for individuals with better credit. Secured credit cards, which require a cash deposit as collateral, can be a viable option for building credit in this range.

Beyond traditional lending, a 635 credit score can influence non-lending transactions. Landlords often review credit reports during rental applications, and a “Fair” score might lead to requests for higher security deposits or the need for a co-signer. Utility companies may also require deposits, and insurance providers, particularly for auto and homeowners policies, can use credit-based insurance scores to determine premiums, potentially resulting in higher costs.

Understanding Your Score’s Components

A credit score, whether FICO or VantageScore, is derived from several key categories of information within a credit report, each contributing a specific weight to the overall calculation. Understanding these components clarifies how a 635 score is determined. While exact weightings can vary slightly between models and versions, the foundational elements remain consistent.

Payment history is the most influential factor, accounting for approximately 35% of a FICO Score and around 40% of a VantageScore. This category assesses whether bills are paid on time, with late or missed payments, collections, and bankruptcies significantly impacting the score. Even a single late payment can negatively affect a score, and for those with a 635 FICO Score, a substantial majority (87%) have a history of payments 30 days past due.

The amount of debt owed, also known as credit utilization, is another major component, making up about 30% of a FICO Score and around 20% of a VantageScore. This factor measures how much of available credit is currently being used. Keeping credit utilization below 30% is generally recommended, as high balances relative to credit limits can lower a score. For individuals with a 635 FICO Score, the average credit utilization rate is notably higher, at approximately 52.8%.

The length of credit history contributes about 15% to a FICO Score and roughly 21% to a VantageScore. This considers how long credit accounts have been open, the age of the oldest and newest accounts, and the average age of all accounts. A longer credit history with established accounts generally benefits the score.

New credit, including recent applications and newly opened accounts, accounts for approximately 10% of a FICO Score and between 5% and 11% of a VantageScore. Applying for new credit can result in a temporary drop in score due to hard inquiries.

Lastly, the credit mix, or the variety of credit accounts (e.g., credit cards, installment loans like mortgages or auto loans), makes up about 10% of a FICO Score. While not strictly necessary to have every type, a healthy mix can positively influence the score.