What Can I Get With a 655 Credit Score?
Explore the financial access and opportunities a 655 credit score provides, and understand the terms you're likely to encounter.
Credit scores numerically represent an individual’s creditworthiness, helping lenders assess risk. These scores consolidate financial history into a single number, aiding informed decisions. Different scoring models, such as FICO and VantageScore, provide similar assessments of borrower reliability. Understanding how these scores function is important because they significantly influence access to financial products and their terms.
Understanding Your 655 Credit Score
A 655 credit score typically falls within the “fair” or “average” range. Lenders perceive this score as indicating some established credit history, but it may also suggest past payment inconsistencies or a limited credit profile. This score signals that while the borrower has demonstrated some ability to manage credit, there might be areas for improvement.
The implications for interest rates and approval odds with a 655 score are generally less favorable compared to higher scores. Individuals with “good” or “excellent” scores typically qualify for the lowest interest rates and most flexible terms. While a 655 score can open doors to various financial products, the associated terms, such as interest rates, loan amounts, or down payment requirements, might not be the most advantageous.
Credit Card Options
Individuals with a 655 credit score have several credit card options, though terms may differ from those offered to applicants with higher scores. Secured credit cards are a common starting point, requiring a cash deposit that acts as the credit limit. This deposit minimizes issuer risk and helps the cardholder build positive payment history, which can eventually lead to an unsecured card.
Unsecured credit cards for individuals with fair credit are also accessible, often featuring annual fees and higher annual percentage rates (APRs), which can range from 20% to 30% or more. These cards usually come with lower credit limits, reflecting the perceived risk. Retail store cards are another option, sometimes offering easier approval but often carrying even higher APRs compared to general-purpose cards.
Auto Loans and Mortgages
Securing an auto loan with a 655 credit score is generally possible, though borrowers should anticipate higher interest rates than those offered to individuals with stronger credit. These rates could range from 8% to 15% or higher, depending on the lender, vehicle, and loan term. Providing a substantial down payment can significantly improve loan terms, potentially lowering the interest rate and monthly payments.
For mortgages, a 655 score is often on the lower end for conventional loans. However, it does not rule out approval, especially through government-backed programs. Federal Housing Administration (FHA) loans are often more flexible regarding credit requirements, typically requiring a minimum FICO score of 580 for a lower down payment. While a 655 score may qualify for an FHA loan, interest rates will likely be higher than for borrowers with excellent credit, and underwriting might involve stricter scrutiny of debt-to-income ratios and employment stability.
Other Financial Opportunities
A 655 credit score impacts various other financial opportunities. Personal loans, for instance, may be available, but they typically come with higher interest rates, often ranging from 15% to 36% or more, reflecting perceived risk. Lenders might also require a co-signer or collateral, or they may offer smaller loan amounts.
For student loans, federal options generally do not rely on credit scores for eligibility, focusing on financial need. Private student loans are credit-based, and a 655 score might necessitate a co-signer for approval or more favorable terms.
Beyond lending products, a 655 score can also affect non-lending aspects of daily life. Landlords often check credit reports when renting an apartment, and this score might lead to a larger security deposit. Utility service providers may require a deposit to initiate service if the credit score is not robust. Credit-based insurance scores, derived from credit report information, can influence auto and home insurance premiums, potentially leading to higher costs for individuals with fair credit.