The FICO scoring model ranks a 662 credit score as “Fair.” You’re well on your way toward all the factors that qualify a Good score, even Very Good with more successive months of on-time payments and debt minimization.
In fact, your 662 credit score is only eight points from a “Good” credit score ranking, as the threshold for a Good credit ranking begins at 670.
Credit scores — often regarded as the heartbeat of your financial health — identify a person’s aptitude for a loan or sizable purchase. Whether you’re looking to secure a new home, purchase a car, or open a checking account at a local bank, credit scores help potential lenders understand your credit history.
Many individuals receive regular credit reports, from lenders, financial institutions, even third-party credit monitoring parties. Annual credit reports are safely encrypted to protect personal information and payment data.
Understanding where your credit score of 662 ranks means understanding where the number comes from. Even though your 662 credit score is expressed as a single figure, it’s actually the result of a percentage-based financial equation.
Your credit score is a representation of past transaction history, current debts, duration of credit history, and other financial factors. Improvements or setbacks in one or more of these fields will affect the overall number you see on your regular credit score reports.
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Why Your Credit Score Is 662
While it’s impossible to know exactly which factors determine your credit score of 662, common influences on “Fair” credit scores include payment history, total credit owed, and credit age.
Remember that full, complete payments toward your balances can eventually upgrade your “Fair” credit score to a “Good”, and even “Very Good” or “Exceptional” credit score.
Payment History to Date
Payment history is one of the main factors contributing to your individual credit score. Given the fact that your current 662 credit score ranks as Fair, your payment history — including late or incomplete payments, irregular payment dates, and payment activity on open credit accounts — has likely contributed to where you stand today.
The longer your track record for on-time payments, the more positively your payment history will influence your credit score. Conversely, any residual payment mistakes or missed payments can bring your 662 credit score down further.
Total Credit Owed
Another major contributing factor in determining credit score is total debt, or the total amount owed at the time when your credit report is run. Total credit owed simply refers to the total amount of money counted as debt against your account.
In fact, total credit owed can count for as much as 30% of your total credit score, so it’s in your best interest to pay down total debt quickly.
In more extreme cases, credit against your account can even include debt owed to a collections agency. If you owe funds to a collections agency, look to systematically pay down debt as soon as it is financially possible and responsible to do so. Releasing yourself from the grip of a collections agency is as alleviating emotionally as it is beneficial to your overall credit score.
Credit History Length
To a lesser extent, the length of existing credit history also has a role to play in determining your ongoing credit score. With a credit score of 662, it’s likely that your accounts have been open for shorter periods of time.
While there’s no established period of time associated with credit score increases, there’s typically a positive relationship between overall credit score and the amount of time individual credit accounts have been active. Look to keep credit lines active and paid off to improve your credit score over time.
What Can You Do With a 662 Credit Score?
A credit score of 662 still allows you the freedom to use your existing credit in all the ways you need to. Your score requires improvement to qualify as Good, but it is sufficiently high for substantial credit use.
If you’re interested in the specifics of exactly what your 662 credit score allows, we’ve outlined opportunities and corresponding permissions below:
- Credit card applications are still possible, though you’ll be limited as far as the specific card types, credit ceilings, financial institutions, and daily spend thresholds you can achieve.
- Minimize active credit cards to maximize credit scores.
- Rewards credit cards often aren’t available until credit scores improve.
- Personal loans are also still possible, though oftentimes difficult to secure.
- In particular, loans for residential, auto, or boat purchases are typically restricted because of the total loan amount or the nature of the purchase.
- Consider pursuing easier loan types to secure with poor credit.
- Property rent is absolutely possible with a 662 credit score.
- Most landlords prefer credit scores between 600 and 650, since individuals who are renting typically haven’t improved their credit score through a mortgage yet.
Ultimately, a credit score of 662 does not outright prevent you from financial freedom. However, it does often mean restrictions on the specifics of your credit use.
Additional annual fees, higher annual interest rates, lower available daily spend amounts, and closer credit checks are all likely until you see subsequent credit score increases.
Once you increase your 662 credit score even further, you’ll be able to unlock even more benefits — including the best rewards-based credit cards, higher spend thresholds, as well as lower annual fees and interest rates.
How to Repair a 662 Credit Score
We’ve already alluded to easy, concrete steps you can take to repair your credit score of 662. Look to pay down debts promptly, before they begin to build and accumulate additional interest.
Use that same credit card regularly when paying down your existing balance; this will extend total credit length and on-time payment history, two of the most important factors in determining your overall credit score. And if you owe additional debt to a collections agency, prioritize those payments.
Repairing your credit means pursuing a proactive approach to credit in general. Establishing on-time credit payment habits, consolidating debt, and refraining from unnecessary purchases will help you boost your credit score to a figure more reflective of your habits.
To jumpstart credit repair, consider asking any of the top credit repair companies to serve as your advocate in optimizing debt, disputing payments, and building credit.
A 662 credit score is firmly on the edge of a Good score; you’re only eight points away from unlocking additional credit benefits. Keep loan utilization low and available spend high.
While late payments or credit negligence can compromise your credit score, on-time credit deposits and financial discipline can just as easily expedite credit score increases well beyond your current financial status.
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