If you’ve reviewed your credit report recently, you may have found that you have a credit score of 659. If this is the case, you have Fair credit. While this is not Poor credit, it is still low on the FICO credit score model.
A score is considered “Fair” when it is between 580 and 669 points. This means your score of 659 is just 11 points away from a “Good” score of 670. This makes improving your score imperative so that you can access the many positive aspects that come with maintaining good credit.
The information below is provided to help you identify what activities are harming or hurting your financial situation. This can help you come up with a strategy to boost your credit score in the future.
Table of Contents
Why Your Credit Score Is 659
There are many factors that go into calculating a credit score. These are important to consider, as they can all make a big difference on where your score falls.
Consider the following categories and compare them to your own financial habits and behaviors. As you do so, take the time to assess whether each one is an area of strength or weakness in your monetary activities. It’s important to identify both of these things if you want to improve your score in the future.
Your Payment History
Most lists of this nature begin with your payment history — and with good reason, as it accounts for 35% of your score. This means making payments on time and in full is the number one most important factor when it comes to your credit.
Derogatory Marks
If your credit report has a derogatory mark, it can bring your credit score down. This consists of various undesirable events such as:
- Missed payments and defaulting on loans;
- Collection agency claims;
- Bankruptcy;
- Foreclosure;
- Repossession.
A derogatory mark can remain on your report for seven years or more, hurting your credit score throughout its lifespan.
Along with derogatory marks, hard credit inquiries can also show up on your report and hurt your score. However, these aren’t bad as long as you don’t have too many of them in a short time span. Regardless, they shouldn’t lower your score for more than a year.
Your Credit Utilization Ratio
One of the other most important factors to consider is your credit utilization ratio. This consists of the amount of money you’ve borrowed divided by the amount of credit you have available. If this ratio gets to be above 30%, it can begin to harm your score.
Your Credit Age, Mix, and Amount
Another trio of important factors include:
- The average age of your credit: This includes all of your credit accounts and can make it difficult to have a high score when you’re younger. If you open multiple new lines of credit all at once it can also reduce your credit age and, by extension, your score.
- The diversity of your credit: If you only have one or two forms of credit it can hold your score back. However, utilizing a variety of options, such as credit cards, an auto loan, student loans, a mortgage, and a home equity loan, can help to raise your credit.
- Your total debt: If you utilize a lot of non-revolving credit — that is, money that you borrow all at once and pay back in installments — it can lower your score and scare away potential lenders.
There are plenty of factors that can impact your credit score. Each of the above items can help your score when done right and hurt it when done incorrectly. This makes it essential to review each one and look for ways to use the information to improve your own financial activities.
What Can You Do With a 659 Credit Score?
A fair credit score of 659 doesn’t completely hobble your ability to do things. However, it can certainly make the process more complicated, difficult, and expensive. For example, it can be challenging to:
- Get a personal loan: From purchasing a car to getting a home equity loan, personal loans will come with extra strings attached. Lenders will want to guard against potential issues by increasing interest rates and setting up harmful late payment fees.
- Find housing: If you apply for a mortgage, you’ll likely find yourself facing loan-related credit issues. If you opt for an apartment instead, you may find a landlord reviewing your credit as part of the approval process. Your lower credit may require a heftier security deposit or may even lead to a flat-out rejection.
- Open up credit cards: While you can still get a credit card if your score is 659, they may not be as good as you might be hoping for. Your score may lead to annual fees, a lower borrowing limit, and a high-interest rate. You also will be less likely to get some of the better rewards credit cards available.
While there isn’t a need to panic, if you have a fair credit score, it’s worth considering how you can boost it.
How to Repair a 659 Credit Score
There are many ways to improve a score of 659. The good news is that you’re already very close to the good credit score range. This means, if you can create an effective credit repair strategy and then stick to it, you should begin to feel the fruits of your labor fairly quickly.
With that said, here are a few suggestions for different things that you can incorporate into your financial activity in the name of boosting your credit:
- Establish a good budget: If you already have a budget, update it. If you don’t have a budget yet, create one. This is a good habit and an essential part of healthy finances. It is also a great way to ensure that you perfect your payment history.
- Address revolving and non-revolving credit: When it comes to your non-revolving debt, pay down as much as you can. As for your revolving lines of credit, use them consistently and responsibly.
- Review your credit report: You can get a copy of your credit report from the three credit bureaus once a year. Do so and review them thoroughly.
- If you find an error, send a dispute letter to the credit bureau to correct it.
- If you find a derogatory mark, fix the issue and then send a forgiveness letter asking to have it removed.
- Look for outside help: If you find the task too overwhelming, look for a good credit repair company to help you through the process.
By creating a credit repair plan, you can begin to move your finances in a positive direction. With a score of 659, this can quickly lead to Good credit and set you up for even better credit options in the future.
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