What Can I Get With a 653 Credit Score?

A credit score is a numerical representation of an individual’s creditworthiness, indicating the likelihood of repaying borrowed money. These scores typically range from 300 to 850, with higher numbers signifying lower risk to lenders. A 653 credit score falls within the “Fair” credit category. This article explores the types of financial products and services an individual can typically access with this score.

Interpreting a 653 Credit Score

A 653 credit score generally signifies to lenders that an applicant falls into the “Fair” credit category, typically ranging from 580 to 669. This indicates a moderate level of risk. While it suggests some history of responsible credit behavior, it also implies potential areas for improvement.

Lenders often view individuals with scores in this range as “subprime” borrowers, meaning their credit standing is less than what is desired for the most favorable terms. Despite this classification, a 653 score is often sufficient for approval for many financial products. However, the terms offered will likely be less favorable compared to those with higher scores, translating to higher interest rates, stricter conditions, or larger down payment requirements. Beyond the credit score, lenders also consider other financial factors such as income, existing debt-to-income ratio, and employment stability.

Qualifying for Credit Cards and Loans

A 653 credit score provides access to various credit cards, though not typically those with premium rewards or the lowest interest rates. Applicants can expect higher annual percentage rates (APRs) and lower initial credit limits. Some issuers might require a security deposit, or a secured credit card could be a suitable starting point. Secured cards require an upfront deposit, which often serves as the credit limit, helping to build a positive payment history.

Personal loans are accessible with a 653 credit score, but interest rates will be higher due to the moderate risk perceived by lenders. While specific rates vary, a borrower with a 653 score might see rates of 10% or higher, compared to around 8% for those with good credit. Lenders will also assess income and existing debt to ensure repayment capacity.

For auto loans, a 653 credit score generally allows for approval, but interest rates will be elevated. The exact rate depends on the lender, vehicle, and loan term, and will be higher than prime rates. A larger down payment can help mitigate perceived risk and potentially lead to better terms. Comparing offers from different dealerships and lenders is beneficial.

Mortgage eligibility with a 653 score is possible, though it is at the lower end of acceptable scores for many programs. Conventional loans often require a minimum credit score around 620-670. Government-backed loans, such as Federal Housing Administration (FHA) loans, are more accessible, sometimes with scores as low as 580 with a 3.5% down payment. Veterans Affairs (VA) loans also offer lenient credit requirements for eligible service members and veterans. Borrowers with a 653 score should anticipate higher interest rates, stricter underwriting, or larger down payments.

Accessing Housing and Essential Services

Renting an apartment often involves a credit check, and a 653 credit score is generally acceptable to many landlords. Landlords might, however, require additional assurances from applicants with this score, such as a larger security deposit, a co-signer, or more stringent income verification to mitigate the perceived moderate risk.

Setting up utility services, including electricity, gas, water, and internet, typically involves a credit assessment. With a 653 credit score, utility providers may require a security deposit before establishing service. This deposit acts as a safeguard against non-payment, and its amount is generally equivalent to one or two months of estimated service.

Credit-based insurance scores, derived from an individual’s credit report, can influence premiums for auto and home insurance. A 653 credit score might result in slightly higher insurance premiums compared to those with “Good” or “Excellent” credit. Insurers perceive a moderate risk, which can translate to increased costs. Some states regulate or prohibit the use of credit scores in setting insurance premiums.

Obtaining a mobile phone contract often involves a credit check. With a 653 credit score, individuals can typically qualify for standard mobile phone contracts. However, if the score is on the lower end of the “Fair” range, some providers might require a security deposit or limit access to premium plans or devices. This deposit is usually refundable after a period of on-time payments.