665 Credit Score – Is it Good or Bad?
Generally, experts consider the 665 credit score to be a fair score. While many people have such scores, getting credit approval can still be quite difficult for you. In most cases, however, people with such a score have to pay high interest rates and fees.
Lenders use credit scores as numbers to determine how risky a potential borrower could be. Of course, if your score is high, there is a higher likelihood that you will return the borrowed money. While fair credit scores could fall in the middle range, they can make it quite challenging to qualify for some credit cards and loan types.
665 Credit Score – Understanding your Credit
Telling whether your credit is good or bad can be a challenge for money people, as there are certain complications involved. For instance, you may not have only one credit score to check. More often than not, people have several credit scores created by numerous credit scoring models. The credit scores developed by Vantage Score and FICO are arguably the most common and tend to fall within the range of 300 – 850.
Some scores, however, utilize a different range. Many models for credit scoring consider numerous factors for determining scores, utilizing credit reporting data offered by 3 consumer credit bureaus. Since there are a wide range of credit scores available, a fair score can depend on the model used for generating a score. Your lender also plays a massive part in determining whether they deem your credit score to be a fair one.
While this leaves a fair bit of vagueness, your sores can offer you a glimpse of what you can expect when shopping for credit cards or loans. Therefore, knowing your credit score can be a vital step to help you build credit. In case you are wondering, building your credit is vital as it could help you get approval for favorable rates and terms when you want to get your next credit card, house or car.
Building Credit the Right Way
Your particular credit profile plays a critical role when it comes to building your credit. However, there are certain habits you must consider practicing to be on the right track. Mentioned below are some tried and tested tips to help you out:
Inspect Your Credit Reports for Inaccuracies and Dispute them Right Away
Going through your credit reports is one of the best ways to build good controlled credit. Sure, it seems quite straightforward, but when you review your credit reports regularly, you can identify inaccuracies and errors negatively impacting your score. Inspecting your credit reports could also help you steer clear from identity theft by helping you see telltale signs of it early.
If you notice any discrepancy or errors on your credit report, consider disputing them to your respective financial institution to improve your score.
On Time Payments Matter
If you show lenders your ability to return your loans and pay money on time, your chances of getting your desired loan or credit product improve greatly. Consider making on-time payments using your current credit line to ensure your payment history is positive.
In case your credit reports already contain late payments and other similar elements, they will disappear after a few years (usually seven). In case, the late payments are still present on your report, even after seven years, and you notice inaccuracies, you can ask the credit institution to remove them to improve your credit score.
Diversification is Vital
When lenders see that you have sufficient experience taking care of different credit types, they consider you reliable. The numerous accounts you may be using could include an installment loan, credit card or other revolving credit lines. Financial expert do not suggest applying for loans only for the sake of building credit.
Doing so can make your debt incredibly expensive and could also lead to hard inquiries. These hard queries can happen if the lender decides to go through your reports when deciding if you would be a suitable candidate. These inquiries can have a massive impact on your credit score, particularly if you have several of them within a short period.
Decrease Your Credit Utilization Rate
The credit utilization rate is essentially your current credit’s overall percentage. For instance, if you only have one credit card with a thousand Dollar limit and you owe five hundred Dollars, your credit utilization rate will be fifty percent.
Generally, low credit utilization rates result in better overall scores. Most financial advisors suggest keeping the credit utilization rate under thirty percent. Some even suggest keeping it even lower, if possible. Anything close to or over fifty is considered a high credit utilization rate, which could impact your credit score negatively.
Clearing your debt is a surefire way to lower your credit utilization rate (while ensuring you do not add more to the credit cards you are currently using). Some people also lower these rates by raising the total credit available to them. You can do this by asking your lender to provide you with a credit limit that is higher than your current one. Alternatively, you can open a new credit line or loan.
That said, you should avoid opening too many of them, as it could affect your credit negatively and reduce your chances of getting loan approvals.
It Takes Time
Your credit history and credit account’s age are massive factors that affect your credit score. Therefore, whether you have a 665 credit score or any other score, you must take your time prior to canceling your credit cards. Remember, while closing a credit card that you used sparingly may seem like a good idea, but it could lower your credit history’s average age. Things like these can massively impact your credit score for the worse.
665 credit score and Credit Cards
If you have fair credit, there are a wide range of unsecured credit cards that you can access. Unsecured cards are different from secured ones as they do not require you to offer security deposits. Not having to pay security deposits is a massive bonus, but you must also consider a few other factors. For instance, a large number of unsecured cards that people with fair credit can access tend to charge annual fees.
In some cases, these credit cards have a high variable APR, which could result in high interest rates if you do not pay off your statement balance every month (at the very least). If you have fair credit, the credit card you will receive may have a lower credit limit. That said, this limit could increase down the line once issuers review your credit history. Remember, credit limit is vital because it is connected with ones credit utilization rate.
Fair Credit- Accessing Better Rates for Auto Loans
Car loans do not require a minimum credit score. Generally, however, if your credit score it fair, your loan options may have unfavorable terms and high rates. As mentioned earlier, building credit is one of the best ways to access more favorable terms. However, this process takes time, and if you don’t much time, mentioned below are a few things that could help.
Be Aware of your Options
It would be best to compare the loan terms and rates offered by multiple lenders whenever you are searching for an auto loan. There is a massive chance that the rates you are getting from a credit union, online lender or bank are better than what you may currently be getting. Also, looking around does not necessarily affect your credit score negatively.
It is also worth keeping in mind that hard inquiries taking place during a particular period are only counted as single inquiries. This time period could around forty to forty five days, depending on numerous variables. However, shopping inside a 2 week window would be ideal for ensuring your score remains unaffected.
Get a Co-signer for your Car Loan
There are a few pros and cons involved with getting co-signers for your car loans. However, if you have a family member or friend (with a good credit score) that you trust and is willing to co-sign, qualifying for a loan could become easier.
Higher Upfront Payments
If your car loan option comes with massive interest rates, making a bigger down payment could be ideal. Doing so could help you save more in the long run. Making higher payments up front means that you can make smaller payments during the loan tenure. What’s more, offering a high down payment can also reduce the auto loan’s interest rate.
665 Credit Score and Personal Loans
Have you been exploring the market for a personal loan? If that is the case, you may qualify for one if you have a fair credit score. However, like other loan types mentioned in this piece, you may lenders may charge more fees or interest rates. These fees and rates could make the loan not as desirable as it seemed initially, depending on what you require it for.
For instance, if you want to use a personal loan for consolidating your credit card’s debt, the loan’s interest rate may be too high to save you any cash for the long term. This is particular true considering the high upfront fee you may have to pay. On the other hand, if you want to finance a massive purchase through a personal loan, think about if you can wait for it or if you need it right away. Waiting and building your credit is always ideal and will help you get a loan with low interest rates.
665 Credit Score and Mortgage Rates
The credit score required for purchasing a house could greatly vary, depending on several factors. As mentioned abundantly, getting favorable mortgage terms can be quite challenging if you have a fair credit score. There are many mortgage options available these days and some of them are particularly for people who cannot qualify for a traditional loan.
In most cases, private lenders design these loans with the governments backing. These loans come with lower down payment options compared to regular loans. Here are some of the most common loans backed by the government.
- USDA Loans
- VA Loans
- FHA Loans
Acquiring the options mentioned above can be remarkably easier compared to a regular loan. However, not everyone can get these loans. Before you take any step, remember to look around and consider your options. Search for the most competitive rates by comparing what lenders in your area or offering. As far as auto loans go, there is a particular time in which multiple hard inquiries are only considered one. While this window could be longer, you should consider restricting multiple inquiries to a fourteen day period.
Final Thoughts
You may face a few complications in case your credit score is falling within the fair range. Most people with a 665 credit score have trouble getting loan approvals and favorable rates. You can address this issue by building your credit, and the tips we discussed in this piece can come in incredibly handy. Remember, while your loan request may get rejected today, you could get approval in a future if you improve your credit score.
If lenders do not accept your loan request, you can always ask them the reason for it. This could be quite helpful to determine if there is some racial prejudice involved. Discrimination is illegal for all lenders and they can only reject your loan request based on factual data. Things like marital status, religion, gender or race should count when it comes to getting a loan.
Understanding credit scores is vital to ensure you can get the credit product or loan you are looking for. While researching by yourself can help, nothing beats the help of a seasoned financial expert. At Credit Follows, we have a team of the best experts. They can give you the complete lowdown of your credit history, and help you improve your665 credit score with ease.
