Is a Credit Score of 639 Good or Bad?

A credit score is a numerical representation of an individual’s creditworthiness. This three-digit number helps lenders assess risk and make informed lending decisions. Various scoring models exist, such as FICO Scores and VantageScores, each with its own calculation methodology.

Understanding Credit Score Ranges

Credit scoring models, predominantly FICO Scores and VantageScores, operate on a numerical range from 300 to 850. Scores are categorized into tiers like Poor, Fair, Good, Very Good, and Excellent. A 639 FICO Score falls within the “Fair” category (580 to 669). For VantageScore 3.0, a 639 score is also in the “Fair” range (601 to 660).

While these ranges provide general guidance, specific thresholds can vary slightly among different model versions and lenders. A “Good” FICO Score begins at 670, placing a 639 score just below this threshold. The average FICO Score in the U.S. was 715 in 2023, placing a 639 score below this national average.

Lender Perspective on a 639 Score

Lenders view a 639 credit score as a risk category where credit is accessible, but often under less favorable conditions than for borrowers with higher scores. While not considered “excellent” or “very good,” it does not automatically preclude access to financial products. Individuals with a 639 score might find various types of credit available, including personal loans, auto loans, and certain credit cards.

Personal loans may be obtainable from online lenders with flexible credit score requirements. Auto loans are also accessible, as they are secured by the vehicle, reducing lender risk. For mortgages, a 639 FICO Score is often sufficient for government-backed options like FHA loans, which allow for down payments as low as 3.5%. Conventional mortgages typically require a score closer to 620 to 640.

Despite potential accessibility, terms for a 639 score are generally less attractive. Borrowers should expect higher interest rates on loans, leading to increased borrowing costs. Credit cards may come with lower credit limits and higher annual fees. Approval is not guaranteed and depends on other financial factors like income, debt-to-income ratio, and the specific underwriting criteria of each lender.

Key Factors Influencing Your Credit Score

Your credit score is derived from several major components. Payment history is the most significant factor, accounting for approximately 35% of a FICO Score and up to 41% for some VantageScore models. This component reflects whether bills are paid on time, with late payments having a substantial negative impact. Even a single payment 30 days past due can significantly harm a score and remain on a credit report for up to seven years.

Amounts owed, often expressed as credit utilization, is the second most influential factor, making up about 30% of a FICO Score and 20-30% of a VantageScore. This measures the percentage of available credit used on revolving accounts, such as credit cards. Keeping credit utilization low, ideally below 30% of total available credit, is recommended for a healthy score. The length of credit history, including the age of the oldest and newest accounts, also plays a role, influencing about 15% of a FICO Score.

New credit inquiries and recently opened accounts contribute approximately 10% to a FICO Score. Applying for new credit can slightly lower a score temporarily, but it typically recovers quickly with responsible payment management. The credit mix, referring to the types of credit accounts maintained (e.g., installment loans like mortgages or auto loans, and revolving credit like credit cards), accounts for around 10% of a FICO Score. Demonstrating responsible management of different credit types can be beneficial.

Strategies for Credit Score Improvement

Improving a 639 credit score involves focusing on the factors that influence its calculation. Consistently making all payments on time is the most impactful action, as payment history carries the heaviest weight. Setting up automatic payments or reminders can help ensure bills are never missed. Even if the full balance cannot be paid, making at least the minimum payment on time is important.

Managing amounts owed is another effective strategy. Keeping credit utilization low, ideally below 30% of available credit, significantly benefits a score. This can be achieved by paying down existing balances on credit cards and other revolving accounts. Paying balances multiple times a month can help keep reported utilization low.

Maintaining a longer credit history contributes positively to a score. It is advisable to keep older accounts open and active, even if rarely used. Avoid opening too many new credit accounts in a short period, as each application can lead to a slight, temporary score dip. While a mix of credit types can be beneficial, focus on responsible management of existing accounts.

Regularly checking credit reports from Experian, Equifax, and TransUnion is important. Federal law allows consumers to obtain a free copy of their credit report annually from each bureau through AnnualCreditReport.com. Reviewing these reports helps identify and dispute inaccuracies, such as incorrect late payments or accounts that do not belong to you, which could negatively affect your score.