A credit score of 633 officially ranks as “Fair,” according to credit reporting agency Experian. Until borrowers take steps to improve a Fair credit score, they may experience challenges when attempting to secure new credit cards, new loans, and new lines of credit.
Credit scores are often difficult to understand. A metric that helps lenders understand a borrower’s creditworthiness, your credit score reflects your capacity to repay a loan after it has been issued.
Five individual financial factors make up the equation that decides a borrower’s credit score:
- Payment history;
- Total debt;
- Credit age;
- Credit type;
- New credit.
One of the first steps to improving a “Very Poor” or Fair credit score is familiarizing yourself with the latest updates to your credit ranking. That’s why many borrowers trust credit aggregation programs like AnnualCreditReport.com, to offer credit reports from Equifax, Experian, and TransUnion in a single location.
While not a credit reporting company, safe-to-use AnnualCreditReport.com helps you take steps to identify and understand recent fluctuations to a credit score of 633.
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Why Your Credit Score Is 633
While it’s impossible to definitively identify the exact influences on a credit score of 633, common factors that determine Fair credit scores include an immature credit age, inconsistent payment history, and excessive hard inquiries.
Immature Credit Age
Credit age is one of the factors that can play an important role in deciding a borrower’s credit score. Credit scores of 633 are often negatively affected by credit age, simply because lines of credit haven’t yet been active for long enough to positively influence ranking.
Many borrowers with Fair credit scores aren’t aware of the negative effects that multiple lines of credit can have on credit age. Credit age is expressed as the average age of all active lines of credit.
Therefore, opening a new line of credit — even though new credit cards and their bonuses can be tempting — can hurt your credit score, because they can lower your average credit age.
Inconsistent Payment History
As the single-most-important ranking factor in determining your credit score, payment history accounts for 35% of the total credit ranking equation.
Individuals with credit scores of 633 often see their credit accounts compromised by incomplete, late, or missed payments, which can make future improvements more difficult to achieve.
Improving an inconsistent payment history sounds easy in theory: borrowers simply need to make complete payments before credit repayment deadlines arrive. However, this can be difficult in reality, because the shift often requires the adoption of disciplined spending habits.
Namely, borrowers looking to improve lesser credit scores by improving payment history should shy away from unnecessary transactions, and devote sufficient portions of monthly wages specifically for loan repayment.
Excessive Hard Inquiries
When borrowers petition lenders for new lines of credit, a hard inquiry is performed. A routine examination of a borrower’s financial history, hard inquiries help lenders identify potential lending risks. Hard inquiries remain on a borrower’s financial records for up to one year.
While one or two hard inquiries are normal during a year, excessive hard inquiries can work to injure a borrower’s credit score. Lenders are also understandably hesitant to offer loans to consumers with multiple lines of credit already active.
To increase a credit score beyond a 633 ranking, and improve your financial reputation, borrowers should minimize active lines of credit, avoiding hard inquiries and the negative effects on a credit score that can follow.
What Can You Do With a 633 Credit Score?
A credit score of 633 can mean difficulty in obtaining new loans or credit cards. When borrowers are approved by a lender, acceptance can come contingent on higher monthly loan repayments, lofty interest rates, and extra fees.
Reference the information below for more details on the financial opportunities available to individuals with 633 credit scores.
- Rewards-based credit cards allow consumers to earn rewards from a wide variety of transactions.
- A credit score of 633 is likely insufficient for one of the best rewards-based credit cards — which offer airline miles, hotel points, restaurant rewards, and other perks — but you’ll still likely be able to qualify for a credit card with 0% introductory financing options and incentives from popular retailers.
- Personal loans help individuals fund personal projects, from private weddings to unexpected medical bills.
- While some borrowers can secure personal loans with 633 credit scores, acceptance might come contingent on high interest rates and lofty monthly payments.
- Consumers with lower credit scores should consider personal loan options for bad credit.
- Mortgage loans allow individuals to take steps toward property ownership.
- Depending on your lender, mortgage loans might be an option for borrowers with a 633 credit score.
- However, qualification for a home loan with a Fair credit score often means higher-than-average interest rates and the possibility of extra fees.
- Apartment rentals are often an option for consumers with credit scores of 633.
- Especially since many apartment managers are accustomed to dealing with lower credit scores, your Fair credit ranking should be enough to help you obtain an apartment rental — depending on your preferred apartment community.
A credit score of 633 is sometimes enough to help you qualify for new lines of credit, depending on your lender and other influential financial factors. When borrowers with Fair credit scores experience difficulty in qualifying for a new loan or credit card, many consider loans from lenders who accept poor credit scores.
How to Repair a 633 Credit Score
Repairing a credit score of 633 first means addressing serious risks toward long-term financial health. Namely, borrowers with Fair credit scores need to address any loans in default, prioritize repayments due to collections agencies, and guard against the possibility of bankruptcy.
Once more concerning issues have been satisfied, repairing a 633 credit score also means practicing healthy financial habits.
Making full, on-time payments toward credit balances helps improve payment history and lower total debt, two major factors that can help increase your credit score. In addition, look to keep hard inquiries low each year, to avoid compromising average credit age.
Consumers who notice errors in their credit reports should take action before those inconsistencies result in credit score decreases below 633.
The best credit repair agencies can help you repair credit ratings by correcting issues in your financial history, even communicating with lenders and credit companies when necessary. Ensuring a correct credit record helps establish a solid foundation for future credit score increases.
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