FICO scores, credit scores, and the like can be confusing, but it’s important to understand where you stand if you want to access credit. Your 651 FICO score is a critical part of that understanding.
A 651 credit score places you right in the middle of fair and good credit. With this score, you have more than average access to credit products, and you should be able to qualify for most loans and credit cards.
That said, a 651 score could be better. You’ll need a higher score to maximize your access to the best interest rates and terms on credit products. With this score, it’s important to look at the context of where you got the score. For example, if you have a 651 credit score and you’ve never applied for credit before, that’s better than someone who has had a few late payments on their report.
What Can I Do With a 651 Credit Score?
With a 651 credit score, you should be able to get approved for most types of credit. Many lenders are willing to work with people in the Fair range, and you may even qualify for competitive rates on certain products.
Your 651 score will still limit your access to the best rates. To get the most competitive terms, you’ll need to work on building and improving your credit score.
What Impacts Your 651 Score?
Five main factors impact your credit score: payment history, the amount owed, length of credit history, new credit, and types of credit used.
Payment history makes up the most significant portion of your score (35%). This involves whether you make payments on time and how often you’ve had late or delinquent payments.
Amount owed (30%) is the second most significant factor in your credit score. This involves the amount of credit you use compared to available credit limits.
Length of credit history (15%), types of credit used (10%), and new credit (10%) make up the remaining factors. These involve how long your accounts have been open, how recently you’ve opened new accounts, and what kinds of loans or credit cards you’ve had in the past.
Improving Your 651 Credit Score?
The first step towards improving your 651 credit score is to understand why it’s at that level in the first place. You can get a free credit report copy from AnnualCreditReport.com and look for any erroneous or unfavorable items that might be negatively impacting your score.
Once you’ve done that, you can focus on building positive credit habits to improve your score over time. Here’s what you can do to boost your score:
Make All Your Payments on Time
Remember that any late or missed payments can negatively impact your credit score. To avoid this, set up payment reminders and pay your bills on time each month. Consider automating any recurring payments to make sure they’re always paid on time.
Reduce Your Debt Load
A high balance relative to your total available credit can hurt your credit score. To reduce this, focus on paying off any outstanding debt before taking out new loans or lines of credit. This will help lower the amount you owe and improve your score.
Reduce Your Credit Utilization Rate
Your credit utilization rate (the amount of available credit you’re using) makes up 30% of your FICO score. Keep it below 30% to avoid any negative impacts on your score. This will help show lenders that you’re capable of managing debt responsibly.
Let’s say your total available credit is $10,000. You should aim to have a balance of no more than $3,000 at any given time.
Check Your Credit Report Regularly
Lenders use your credit report to determine your eligibility for loans and other products. Ensure all the information is accurate and up-to-date, and dispute any errors you see.
Seek Professional Help
If you need help in improving your credit score or managing your debt, it might be worth seeking professional help. Many financial advisors and credit counselors can provide advice and assistance with managing your finances.
Conclusion
Your 651 credit score is in the Fair range, so you should have access to most types of credit. To get the best rates and terms, you’ll need to improve your score. With the help of the tips above, you can start building good credit habits and work towards a higher score. Good luck!
