A credit score of 652 is considered “Fair” credit. While not a worst-case scenario, this is not a good credit score. If you have a score of 652, it’s important that you make an effort to boost your score into the “Good” credit range as soon as you can.
The FICO credit scoring model is broken down into five categories:
- Very Poor: 300 to 579.
- Fair: 580 to 669.
- Good: 670 to 739.
- Very Good: 740 to 799.
- Exceptional: 800 to 850.
Everything from 670 up is considered good credit with the benefits that come along with good credit only increasing with a higher score. With a score of 652, you are still 18 points below the Good credit range.
Here are several tips and recommendations to help you gain a better grasp of your score, how it’s holding you back, and what you can do to repair it.
Table of Contents
Why Your Credit Score Is 652
Many factors go into calculating a credit score. While each score is unique to the individual to whom it belongs, several consistent themes go into creating every score.
Below are several of the most important elements that are used to calculate your score of 652. Consider how each one has either helped or hurt your current score.
Take notes as you go along. Look for both the good and the bad in your past financial behaviors and habits. This will help you identify what areas you should continue to reinforce as well as other areas that need improvement.
Your Payment History, Credit Utilization, and Total Debt
According to the FICO credit score model, your payment history makes up 35% of your total credit score. It considers whether you make payments on time, in full, and consistently.
Right along with your payment history, the total value of the things you own on credit as well as your total debt combine to make up another 30% of your score. This takes both your revolving and non-revolving credit into account.
Your revolving credit is measured by your credit utilization ratio. This is the percentage of the available funds in your lines of credit that you’ve actively borrowed. If your credit utilization ratio on your various accounts creeps above the 30% mark, it can start to lower your credit score.
Also, add up your total debt. This is your non-revolving credit accounts, such as auto or student loans. If your total debt gets too high, it can hurt your score, as well.
Derogatory Marks and Hard Inquiries
Derogatory marks and hard inquiries are two elements that can show up on your credit report — and hurt your credit score as a result.
On the one hand, hard inquiries are, by far, the less worrisome of the two. These are simply notifications that a lender checked your credit report before giving you a loan. Unless you have several hard inquiries in a short period, it shouldn’t hurt your score much — and should disappear within a year, as well.
On the other hand, derogatory marks are a serious issue that can dog your report for years at a time. They appear due to financial shortcomings — typically when you fail to make payments in some way or another. Delinquent accounts, tax liens, repossessions, foreclosures, and even bankruptcy all lead to derogatory marks.
Once you have a derogatory mark on your report, you must fix the issue. Even then, if you want the mark removed and your score to increase, you must send a forgiveness letter to the lender asking them to remove the mark early.
Credit Age and Mix
Finally, while less important, the age and mix of your credit are still worth consideration. The average age of your credit can impact your score, with older credit always being better.
The variety of your credit also makes a difference. If you only have a car loan or a single credit card, it limits your credit score. The more you can responsibly expand your credit variety, the better off your score will be.
What Can You Do With a 652 Credit Score?
You may feel that your score is so close to the Good credit range, you shouldn’t have to worry much. However, the truth is, as long as you’re in that Fair range, it’s going to hamper your financial activity. For instance, having a 652 credit score means you could have trouble with:
- Housing: Getting approved for an apartment may be tough, as landlords often conduct credit checks.
- Even if you’re approved, you may have to pay a hefty security deposit.
- If you try to buy a home, you may not get a mortgage. If you do, it will come with a higher interest rate and a larger down payment.
- Personal loans: If you want to take out a personal loan, you’ll find it difficult.
- As with a mortgage, you’ll have to pay more in interest and you may even have to go to a lender that is set up to loan money to those with bad credit.
- Personal loans: If you want to take out a personal loan, you’ll find it difficult.
- Credit cards: While you can still get certain credit cards with a Fair score, your options will be restricted.
- In addition, you probably will have to deal with higher interest rates, lower borrowing limits, and a lack of credit card rewards that are reserved for those with better credit.
While you aren’t stuck, life with Fair credit is not ideal. It’s important to make plans to ameliorate your situation moving forward.
How to Improve a 652 Credit Score
Hopefully, by this point, you’re well aware of the need to repair a credit score of 652. The good news is, if you take your time and think things through, it’s quite possible to improve your score. You can start the process by:
- Creating and sticking to a budget;
- Paying down your non-revolving debt and avoiding taking out new loans;
- Utilizing your revolving credit and paying it off every month;
- Working with a credit repair company to create a credit repair plan;
- Reviewing your credit report every year for errors and derogatory marks.
Repairing credit takes focus and patience. Fortunately, at 652, it’s just a hop, skip, and jump to that all-important 670 mark where you enter the promised land of good credit.
From there, if you can hold the course set by your new and improved financial habits, you can even climb up into the “Very Good” and “Exceptional” ranges given enough time.
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