What Is a 650 Credit Score and Is It Good or Bad?

Credit scores influence many aspects of an individual’s financial life. These three-digit numbers predict a person’s ability to repay borrowed money. Lenders and other entities rely on these scores to assess risk before extending credit or providing services. Understanding how these scores are determined and what they signify can empower consumers to make informed financial decisions.

Understanding Credit Scores

A credit score is a numerical representation of an individual’s credit risk, ranging from 300 to 850. Lenders use these scores to evaluate the likelihood that a borrower will repay loans as promised. Higher scores indicate lower financial risk.

Credit scores are generated by credit bureaus, which collect and organize financial information about consumers. The three major credit bureaus in the United States are Experian, Equifax, and TransUnion. They compile data on credit accounts, balances, and payment history to create credit reports.

Different scoring models exist, with FICO and VantageScore being the most common. Both models predict repayment behavior and use the 300-850 scale, though they may weigh factors differently, resulting in varied scores across bureaus. Lenders often use specific score versions, sometimes tailored to industries like auto lending or credit cards.

What a 650 Credit Score Signifies

A 650 credit score is categorized as “fair” by both FICO and VantageScore models. This places it below the national average FICO Score, which was 715 in 2023. While not “poor,” a fair score indicates higher risk to lenders compared to those with good or excellent credit.

This score suggests an individual has managed credit with some challenges, such as missed payments or high debt levels. Approximately 17% of consumers have FICO Scores within the fair range (580-669). Lenders may see a 650 score as indicating a higher likelihood of future delinquency.

Despite being in the fair category, a 650 score is not considered “bad” by major scoring companies. It is a turning point: responsible actions can improve it to the “good” range (670-739), while less favorable actions could cause it to drop into the “poor” range.

Financial Access with a 650 Score

A 650 credit score allows access to various financial products, though often with less favorable terms than those offered to individuals with higher scores. Individuals with this score encounter higher interest rates and may face lower credit limits or higher fees. This score is considered “subprime” by some lenders, meaning higher fees and steeper interest rates to offset perceived risk.

For mortgages, a 650 credit score can make homeownership possible. Conventional loans require a minimum score of 620, while Federal Housing Administration (FHA) loans can be obtained with scores as low as 580 for a 3.5% down payment. Veterans Affairs (VA) and United States Department of Agriculture (USDA) loans, for those who qualify, may also be accessible. However, interest rates for a 650 score will be higher compared to those with good or excellent credit, and private mortgage insurance (PMI) or FHA mortgage insurance premiums may be required.

Securing an auto loan is possible with a 650 credit score, although it falls into the “nonprime” category for some lenders. This means higher interest rates; for instance, in Q1 2025, average interest rates for used cars in the 601-660 score range were around 13.74%. Lenders may also require a down payment and offer loan terms of 48 months or longer.

Access to credit cards with a 650 score is common, including some unsecured options. These cards might come with annual fees or high variable annual percentage rates (APRs). Secured credit cards, which require a cash deposit, are also a viable option and can help build credit history.

Regarding housing, many landlords look for a credit score of 650 or higher for rental applications. While some properties, especially luxury apartments, may require higher scores, others might accept lower scores, particularly with additional screening criteria or a larger security deposit. Utility providers also often use credit scores, and a lower score might lead to a deposit requirement for services.

Key Elements Influencing Your Score

Credit scores are derived from several categories of information found in an individual’s credit report, each weighted differently. Payment history is the most significant factor, accounting for 35% to 40% of a FICO or VantageScore. Consistent, on-time payments contribute positively, while late payments, even a single 30-day delinquency, can negatively impact a score.

The amount owed, also known as credit utilization, is another major component, making up 30% to 34% of the score. This factor assesses the percentage of available credit currently being used. Maintaining a low credit utilization ratio, ideally below 30%, demonstrates responsible credit management and can help improve a score.

The length of credit history also plays a role, accounting for 15% of the score. This considers the age of the oldest account, the newest account, and the average age of all accounts. A longer history with established accounts can be beneficial.

New credit inquiries and the types of credit used constitute the remaining portions of a credit score, each contributing 10%. Applying for new credit can temporarily lower a score, especially if multiple applications are made within a short period. Having a mix of different credit types, such as revolving accounts (credit cards) and installment loans (mortgages or auto loans), can reflect positively on a score.