What Can I Get With a 640 Credit Score?

A credit score represents an individual’s creditworthiness, influencing access to financial products and their terms. This three-digit number provides lenders with a snapshot of how reliably a person manages borrowed funds. Understanding what a particular score signifies is an important step in navigating personal finance. A 640 credit score prompts questions about available financial avenues, as opportunities exist, but often with specific conditions.

What a 640 Credit Score Means

A 640 credit score falls into the “Fair” or “Average” category within the broader credit scoring spectrum. The widely used FICO scoring model, which ranges from 300 to 850, classifies scores between 580 and 669 as fair. Similarly, the VantageScore model considers scores between 601 and 660 as “Near Prime” or “Fair.” While better than a “Poor” rating, a 640 score is below the national average and indicates a moderate level of risk to potential lenders.

Several factors contribute to a credit score’s calculation, each carrying a different weight. Payment history holds the most significant influence, accounting for about 35% of a FICO score, reflecting whether payments are made on time. The amount owed, particularly credit utilization—the percentage of available credit being used—makes up approximately 30% of the score. The length of one’s credit history, including the age of accounts, contributes around 15%. New credit applications and the mix of credit types, such as installment loans and revolving credit, each account for about 10%.

Types of Credit Generally Available

Individuals with a 640 credit score find various credit products accessible, though options may be more limited compared to those with higher scores. Auto loans are available for both new and used vehicles. Many lenders extend financing for car purchases.

Personal loans can also be obtained from online lenders or financial institutions specializing in fair credit profiles. These loans provide a lump sum of money repaid over a set period. For those seeking homeownership, government-backed mortgage options like Federal Housing Administration (FHA) loans are accessible. FHA loans have more lenient credit score requirements, making them a common choice.

Veterans and eligible service members may also qualify for VA loans, guaranteed by the Department of Veterans Affairs. While the VA does not set a minimum credit score, many lenders offering VA loans look for a score of 620 or higher, with some accepting scores as low as 550 or 580. Credit cards are also available, including secured credit cards which require a cash deposit as collateral, or certain unsecured cards designed for individuals with fair credit. Federal student loans do not rely on credit scores for eligibility, while private student loans may be an option, sometimes requiring a co-signer.

Common Terms and Conditions

While a 640 credit score provides access to financial products, their terms and conditions are less favorable than those offered to borrowers with higher scores. Interest rates on loans, such as auto loans and personal loans, will be higher. In the first quarter of 2025, average auto loan interest rates for borrowers with credit scores in the “nonprime” range (601-660 VantageScore) were around 9.83% for new cars and 13.74% for used cars. Personal loan interest rates for those with fair credit can range significantly, starting from approximately 20% to 30% Annual Percentage Rate (APR).

For mortgages, FHA loans are accessible but come with specific down payment requirements. A 640 credit score, being above 580, qualifies for the minimum 3.5% down payment on an FHA loan. Borrowers will also incur mortgage insurance premiums (MIPs), which include an upfront premium and an annual premium that continues for the life of the loan. VA loans, while requiring no down payment, are subject to specific lender criteria, which may include a minimum credit score set by the individual lender, around 620.

The pool of lenders for individuals with a 640 credit score can be narrower, leading to reliance on lenders specializing in fair credit. This includes subprime auto lenders or specific FHA-approved mortgage lenders. For credit cards, initial credit limits are lower, starting at a few hundred dollars, particularly with secured cards where the credit limit is equal to the security deposit, which can range from $200 to $2,500. Some loans may require additional conditions, such as a co-signer, to mitigate the lender’s risk.

Actions to Enhance Your Credit Score

Improving a 640 credit score involves consistent financial habits focused on factors that influence credit calculations. Ensuring all payments are made on time is essential. Payment history is the largest component of a credit score, so avoiding late payments for credit cards, loans, and other financial obligations is important. Setting up automatic payments can help prevent missed due dates.

Managing credit utilization, the amount of revolving credit used relative to the total available credit, is another key step. Financial experts recommend keeping credit card balances below 30% of the available credit limit on each card and across all accounts. Reducing existing credit card debt can quickly lower this ratio and positively impact the score. Maintaining older credit accounts in good standing also contributes positively to the length of credit history, demonstrating a long-term ability to manage credit responsibly.

Strategic management of new credit applications is beneficial. Applying for multiple new credit accounts in a short period can lower a credit score due to hard inquiries. Apply for new credit only when necessary and space out applications. Developing a healthy mix of credit, such as both revolving credit (like credit cards) and installment loans (like auto or personal loans), can show responsible financial management over time.

Regularly reviewing credit reports for accuracy is an important safeguard. Individuals are entitled to a free copy of their credit report annually from each of the three major credit bureaus (Equifax, Experian, and TransUnion) through AnnualCreditReport.com. Disputing any errors found can help ensure the score accurately reflects credit behavior.