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Is a 650 Credit Score Good? 9 Tricks and Tips for Financial Freedom

Your credit score is a crucial indicator of your financial stability and your likelihood of meeting future financial obligations. In this article, we will dive into what a 650 credit score means, how to improve it, and the opportunities that come with it. From home loans to credit cards, we’ll explore the possibilities and answer some of the most frequently asked questions in the world of credit.

So, Is a 650 Credit Score Good or Bad?

Comparing the average credit score in the U.S., a 650 credit score lies right in the middle of the FICO score range (300-850), with 670 being the starting point for a “good” credit score. While 650 is not considered bad, it is considered fair. With a bit of financial discipline, it’s possible to improve your 650 credit score further.

It’s crucial to remember that different lenders and financial institutions have their criteria for evaluating creditworthiness. Let’s explore the various financing opportunities available for someone with a 650 credit score.

Is 650 A Good Credit Score

1. Shop Around: Explore All Your Loan Options

Don’t settle for the first loan offer you receive, especially with a 650 credit score. It’s crucial to explore all your mortgage options and find those more lenient towards lower credit scores. To get started, you can check out this helpful list of mortgage options available for different credit scores:

2. Save Up for a Larger Down Payment

Putting down a more significant down payment can make a world of difference for homebuyers with a 650 credit score. In lieu of a better credit score, a larger down payment will not only increase your chances of mortgage approval but also help you secure better interest rates. Aim for a down payment of at least 20% to avoid paying private mortgage insurance (PMI), which can add an extra cost to your monthly mortgage payments.

3. Improve Your Debt-to-Income Ratio (DTI)

Your debt-to-income ratio, or DTI, shows lenders how much debt you carry in relation to your income. If your DTI is too high, lenders might see you as a risky borrower, making it harder for you to secure a mortgage. In lou of a perfect credit score, try paying down existing debts and avoiding new ones to improve your DTI and make a more compelling case for yourself as a borrower.

4. Consider Federal Housing Administration (FHA) Loans

FHA loans are a popular option for borrowers with a 650 credit score, as they typically require lower credit scores than conventional loans. FHA loans are government-backed mortgages offered by private lenders but insured by the Federal Housing Administration. This insurance makes lenders more willing to lend to borrowers with less-than-perfect credit. However, keep in mind that FHA loans typically come with higher mortgage insurance costs, both upfront and over the life of the loan.

5. Opt for Bi-Weekly Payments

Opting for a bi-weekly mortgage payment plan can help you pay down your mortgage faster, save money on interest, and build equity in your new home. By splitting your monthly mortgage into two payments every two weeks, you’ll end up making one extra payment per year, which can make a significant difference in paying off your mortgage sooner.

How Much of a Home Loan Can I Get with a 650 Credit Score?

With a 650 credit score, you can qualify for a mortgage, but it may come with some drawbacks, such as higher interest rates. As you plan to buy a home, these tips will come in handy:

  1. Save for a larger down payment: A higher down payment reduces your loan-to-value (LTV) ratio and increases the likelihood of getting a mortgage with better interest rates.
  2. Pay off debt: Doing so will improve your debt-to-income (DTI) ratio, and a more favorable DTI ratio means you’ll qualify for better mortgage rates.
  3. Monitor your credit report: Review your credit report for any errors and dispute them immediately.
  4. Consider an FHA loan: Government-backed loans like FHA loans are designed to help moderate-income borrowers secure a mortgage with lower credit score requirements.

Credit Card for 650 Credit Score

With a 650 credit score, you can qualify for a credit card, even though your options may be limited. Here are some credit cards suitable for 650 credit score holders:

  • Secured credit cards: These cards require a cash deposit that serves as collateral and is used as your credit limit.
  • Unsecured credit cards: These cards come without a deposit requirement, but they usually have higher interest rates and lower credit limits.
  • Credit-builder credit cards: These are designed specifically for individuals looking to improve their credit.
How Much Of A Home Loan Can I Get With A 650 Credit Score

Car Loan for 650 Credit Score

A car is a significant investment, and with a 650 credit score, you have access to car loans, albeit with slightly higher interest rates. Here’s how to ensure the best deal possible on your car loan.

  1. Save for a larger down payment: A larger down payment will reduce the amount you need to borrow and could result in better interest rates.
  2. Shop around: Compare loan offers from multiple lenders and choose the one with the best terms and interest rates.
  3. Consider a co-signer: A co-signer with a higher credit score can help secure a better car loan deal.


Credit scores have come a long way since their inception in the late 1950s when the Fair Isaac Corporation developed the FICO credit scoring model. Today, credit scores play a crucial role in the financial industry, helping lenders assess borrowers’ creditworthiness and eligibility for various loans and credit products.


  • The average FICO score in the U.S hit 711 in 2020, an all-time high.
  • Approximately 16% of Americans have a credit score between 600 and 659.
  • Close to 60% of the U.S population have a credit score of 700 or higher.


  • There are three main credit bureaus in the U.S: Equifax, Experian, and TransUnion, each collecting and reporting on borrowers’ credit history.
  • Alongside FICO, another credit scoring model, VantageScore, was developed in 2006 by the three major credit bureaus.
Is A 650 Credit Score Good


Q: Can I improve my 650 credit score?

A: Absolutely! By making on-time payments, reducing your debt, maintaining low credit card balances, and keeping credit inquiries to a minimum, you can improve your 650 credit score over time.

Q: How long does it take to improve a 650 credit score?

A: Credit scores take time to improve, and the time it takes to increase your score varies based on the individual’s financial circumstances. Generally, responsible credit behavior should result in a higher credit score within 6-12 months.

Q: Can I get a personal loan with a 650 credit score?

A: Yes, you can qualify for a personal loan with a 650 credit score. However, it’s important to shop around for the best interest rates and terms available. Online lenders, credit unions, and banks are viable options to explore.

Q: Does having a 650 credit score mean I’ll pay higher insurance premiums?

A: Some insurance companies use credit scores to determine risk and set policy premiums. Having a 650 credit score may result in higher insurance premiums, but various factors contribute to the final rate, including driving history, claims history, and location.

With a 650 credit score, making informed decisions and using credit responsibly will have a positive impact on your financial future. From home loans to credit cards, take the time to consider the best options available to you and always shop around for the best interest rates and terms. And most importantly, remember that improving your credit score is a long-term commitment that will reward you with countless financial opportunities.

Mortgage Rater Editorial, led by seasoned professionals with over 20 years of experience in the finance industry, offers comprehensive information on various financial topics. With the best Mortgage Rates, home finance, investments, home loans, FHA loans, VA loans, 30 Year Fixed rates, no-interest loans, and more. Dedicated to educating and empowering clients across the United States, the editorial team leverages their expertise to guide readers towards informed financial and mortgage decisions.
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