How Good Is a Credit Score of 645?

FT Contributor
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According to credit reporting bureau Experian, a credit score of 645 officially rates as Fair. Credit score — a figure used by potential lenders to determine a borrower’s likelihood to repay debts — is pivotal in helping you pursue financial opportunities like new credit cards, personal and property loans, and additional lines of credit.

While your Fair ranking has already eclipsed minimum requirements for a “Very Poor” ranking, you have yet to achieve the score — and the benefits — that individuals with “Good” (670 to 739), “Very Good” (740 to 799) and “Exceptional/Excellent” (800 to 850) credit scores enjoy.

Your credit score is an important building block for successful financial management. Complete payments toward your balances and low overall debt can help regularly increase your credibility, while incomplete or missed payments and loans in default can quickly derail any credit score.

That’s why one of the first steps in improving your overall credit score of 645 is learning how to regularly track it. Fortunately, free, safe-to-use credit score reporting companies like AnnualCreditReport.com make it easy to recognize any new credit score improvements or changes regularly.

Why Your Credit Score Is 645

Financial factors like payment history and credit age form an equation that determines your credit score on an ongoing basis, and help explain any increases or decreases to your ranking over time.

Whether your credit score shows signs of neglect or proactive management, the overall figure isn’t an accident. Good credit scores are built through intentional spending habits, in the same way that lesser credit reports are often the result of overspending and balance underpayment.

Unnecessary or Excessive Hard Inquiries

Every time a borrower is considered for a mortgage, personal loan, new credit card, or any other opportunity that requires a credit score check, lenders will perform a hard inquiry — a quick examination of that borrower’s creditworthiness.

While these credit checks only remain on your financial record for 365 days, anything more than one to two hard inquiries in a single year can indicate a history of risky financial behavior. After all, lenders will be hesitant in offering loans to individuals with multiple lines of credit already active.

Hard inquiries will only decrease your credit score by roughly five points per check, but they can indicate much deeper issues with much greater implications for your credit score.

Typically, individuals with excessive hard inquiries on their financial records have a higher credit utilization ratio — currently used credit expressed as a percentage of credit available. Accounts with Poor or Fair credit scores cannot afford multiple hard inquiries and the risks they impose for borrowers and their credit ratings.

Incomplete Payment History

Ideally, individuals seeking high credit scores will maintain a spotless payment history. This means making complete, on-time payments comfortably before repayment deadlines, to keep overall debt and credit utilization ratios low, and available credit high.

However, a credit score of 645 indicates the possibility of incomplete or inconsistent payment history, one potentially characterized by late or missed payments, even loans in default.

Your payment history is the primary factor that helps to determine your overall credit score. Accounting for 35% of the score itself, payment history should remain your priority if you’re looking to achieve a Good, then Very Good, then Exceptional/Excellent credit score.

Pay balances before loans end in default or collections agencies get involved, and retain a spotless payment history to establish a track record of complete debt repayment.

Total Remaining Debt

After your payment history, the total remaining debt is the second most influential factor in deciding your overall credit score. Making aggressive, yet fiscally responsible, payments toward your credit balances is very important.

Your efforts — or lack thereof — in paying remaining credit balances go a long way toward improvements, or further regressions, to your current 645 credit score.

What Can You Do With a 645 Credit Score?

Despite your Fair credit score of 645, there are still financial options available to you. Mortgage and personal loans, apartment rentals, and new lines of credit may be more difficult to obtain with a Fair credit score, though it may be possible with extra fees or higher average payments.

If obtaining a loan is a particular priority, consult loan options specifically for poor credit scores, but stay alert for the possibility of especially high interest rates or significant annual fees.

Familiarize yourself with even more information below, on exactly what a credit score of 645 allows you to accomplish financially.

  • Mortgage loans can help you afford your forever home. While securing a mortgage with a credit score of 645 is possible, it will likely come with lofty interest rates, with the possibility of additional origination fees to protect lenders against first-time home buyers and potentially risky borrowers.
  • Personal loans help you fund projects you care about, whether that’s a picture-perfect wedding or an unforeseen medical bill.
    • A credit score of 645 makes it unlikely — though still possible — to obtain a personal loan from a reputable lender. However, personal loan options for lesser credit scores can still help you secure the financing you need in a pinch.
  • Apartment rentals are attainable with a credit score of 645. Even if you can’t secure the lowest-possible per-month payment, many apartment communities accommodate lower average credit scores that haven’t yet benefitted from regular mortgage payments.

Ultimately, the best course of action is to begin repairing your credit score before attempting to apply for a loan or credit card.

How to Repair a 645 Credit Score

Repairing a credit score of 645 starts with simple, concrete steps. Make regular payments toward remaining credit balances, and prioritize payments made toward collections agencies or accounts with particularly high interest rates.

Address any loans in default, and avoid civil judgments or bankruptcy — which can negatively affect your credit score for years.

Repairing your credit score also means adhering to more disciplined spending habits. Given the influence that payment history and total debt have on credit score fluctuations, make sure you’re dedicating significant percentages of your regular wages toward credit repayments.

As a general rule, ensure you’re paying off old debt faster than you’re accruing any new debt.

If you find yourself overwhelmed by everything necessary to sufficiently repair your 645 credit score, it might be time to get in touch with a professional.

The best credit repair agencies help you navigate poor credit scores by offering comprehensive credit improvement services; they will even communicate directly with lenders on your behalf, to negotiate terms and steadily increase your overall rating.


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