What Can You Do With a 620 Credit Score?

A credit score numerically represents an individual’s creditworthiness, summarizing their financial history. Lenders use these scores to assess lending risk, influencing approval decisions and financial product terms. A 620 credit score falls into the “fair” or “average” category for FICO and VantageScore models. While it may not unlock the most favorable offers, a 620 score indicates access to credit, providing a foundation for future financial growth.

Understanding Your 620 Credit Score

A 620 credit score is categorized as “fair” by both FICO and VantageScore, the two primary credit scoring models. FICO scores range from 300 to 850, with a “fair” score typically falling between 580 and 669. VantageScore models also use a 300 to 850 range, classifying scores from 601 to 660 as “fair.” This score suggests that while an individual has some credit history, there may have been past financial challenges or a limited credit background.

For lenders, a 620 score often signals a higher level of risk compared to borrowers with “good” or “excellent” credit. Consequently, individuals with this score may find that loan approvals are accompanied by less attractive terms, including higher interest rates, increased fees, or stricter eligibility criteria. Despite these limitations, a 620 score allows access to credit, shaping the type and cost of available financial products.

Accessing Credit Cards and Personal Loans

Individuals with a 620 credit score have options for obtaining credit cards, though these typically come with specific terms reflecting the “fair” credit designation. Secured credit cards are a common choice, requiring a cash deposit that often serves as the credit limit. This deposit reduces the lender’s risk, making these cards more accessible for those looking to build or rebuild their credit history.

Some unsecured credit cards might also be available, but they often feature higher Annual Percentage Rates (APRs) and annual fees. Typical APRs for cards in this range can be significantly higher than those offered to borrowers with stronger credit profiles. Credit builder cards are another avenue, designed specifically to help improve credit scores through responsible use. These options may not offer extensive rewards or benefits, but they serve as tools for demonstrating consistent payment behavior to credit bureaus.

For personal loans, a 620 credit score may allow access to funds, often through online lenders or credit unions. Loan amounts can vary, though the amount an individual qualifies for depends on factors beyond just the credit score, such as income and debt-to-income ratio.

Interest rates for personal loans with a 620 score typically range from 6.46% to 35.99% APR, reflecting increased lender risk. Some loans may include origination fees, deducted from proceeds, ranging from 1% to nearly 10% of the loan amount. These higher interest rates mean a greater overall borrowing cost compared to those with higher credit scores.

Securing Auto Loans and Mortgages

Obtaining an auto loan with a 620 credit score is generally possible, but it often comes with less favorable terms. Lenders consider a 620 score to be in the “near prime” or “subprime” category for auto financing, meaning borrowers can expect higher interest rates.

For instance, in the first quarter of 2025, the average interest rate for a new car loan for someone with a credit score between 601 and 660 was around 9.83%, while for used cars, it was approximately 13.74%. To mitigate the higher interest costs, borrowers with a 620 score might consider making a larger down payment. A substantial down payment can reduce the loan amount, lower monthly payments, and potentially lead to a slightly better interest rate.

Another strategy is to consider a co-signer with a stronger credit profile, which can improve approval odds and potentially secure more competitive rates. While auto loans are accessible, the increased cost of borrowing makes careful budgeting and comparison shopping among lenders important.

For mortgages, a 620 credit score meets the minimum requirement for several loan types, though it does not guarantee approval or the most attractive rates. Conventional loans, which are not government-backed, typically require a minimum credit score of 620. However, borrowers with this score may face higher interest rates and stricter underwriting standards, potentially including higher debt-to-income ratio limits.

Federal Housing Administration (FHA) loans are often more accessible for individuals with lower credit scores. While a 620 score is well above the FHA’s minimum of 500 (with a 10% down payment) or 580 (with a 3.5% down payment), these loans come with mortgage insurance premiums (MIP) that are typically required for the life of the loan.

Veterans Affairs (VA) loans, available to eligible service members and veterans, do not have an official minimum credit score, but many lenders generally look for a score of 620 or higher, often allowing for no down payment. While homeownership is attainable with a 620 score, understanding the specific requirements and costs associated with each loan type is important.

Strategies for Strengthening Your Credit Profile

Improving a 620 credit score involves consistent financial habits that demonstrate reliability to lenders. Making all payments on time is a foundational step, as payment history is a significant factor in credit scoring models, accounting for 35% of a FICO score.

Setting up automatic payments for all financial obligations can help prevent missed due dates and build a positive payment record. This consistent behavior shows a commitment to financial responsibilities.

Managing credit utilization, which is the amount of credit used relative to the total available credit, is another impactful strategy. Keeping credit card balances low, ideally below 30% of the credit limit, can positively influence a credit score. For example, if an individual has a credit limit of $1,000, maintaining a balance below $300 is advisable. This demonstrates responsible credit management and indicates that one is not over-reliant on borrowed funds.

Addressing derogatory marks on a credit report, such as old collections or past due accounts, can also contribute to credit improvement. While these negative items remain on a report for several years, their impact lessens over time. Resolving them by paying them off can signal a proactive approach to financial health. Regularly reviewing credit reports for inaccuracies and disputing any errors can also help in refining the credit profile.

Maintaining a diverse credit mix over time, which includes both revolving credit (like credit cards) and installment loans (like auto loans or personal loans), can positively affect a credit score. However, the emphasis should always be on responsible usage rather than acquiring new debt solely for the sake of diversity. Patience and consistent application of these habits are key to gradually strengthening a credit profile.