Categories

653 Credit Score: Is it Good or Bad?

A FICO® Score of 653 places you within a population of consumers whose credit may be seen as Fair. Your 653 FICO® Score is lower than the average U.S. credit score.

18% of all consumers have FICO® Scores in the Fair range (580-669)

18% of all consumers have Credit Scores in the Fair range (580-669)

.

Statistically speaking, 28% of consumers with credit scores in the Fair range are likely to become seriously delinquent in the future.

Some lenders dislike those odds and choose not to work with individuals whose FICO® Scores fall within this range. Lenders focused on "subprime" borrowers, on the other hand, may seek out consumers with scores in the Fair range, but they typically charge high fees and steep interest rates. Consumers with FICO® Scores in the good range (670-739) or higher are generally offered significantly better borrowing terms.

How to improve your 653 Credit Score

The average FICO® Score is 675, somewhat higher than your score of 653, which means you've got a great opportunity to improve.

70% of U.S. consumers' FICO® Scores are higher than 653.

What's more, your score of 653 is very close to the Good credit score range of 670-739. With some work, you may be able to reach (and even exceed) that score range, which could mean access to a greater range of credit and loans, at better interest rates.

The best approach to improving your credit score starts with a check of your FICO® Score. The report that's delivered with the score will use details from your unique credit report to suggest ways you can increase your score. If you focus on the issues spelled out in the report and adopt habits that promote good credit scores, you may see steady score improvements, and the broader access to credit that often comes with them.

Moving past a Fair credit score

While everyone with a FICO® Score of 653 gets there by his or her own unique path, people with scores in the Fair range often have experienced credit-management challenges.

The credit reports of 41% of Americans with a FICO® Score of 653 include late payments of 30 days past due.

Credit reports of individuals with Fair credit cores in the Fair range often list late payments (30 days or more past due) and collections accounts, which indicate a creditor has given up trying to recover an unpaid debt and sold the obligation to a third-party collections agent.

Some people with FICO® Scores in the Fair category may even have major negative events on their credit reports, such as foreclosures or bankruptcies—events that severely lower scores. Full recovery from these setbacks can take up to 10 years, but you can take steps now to get your score moving in the right direction.

Studying the report that accompanies your FICO® Score can help you identify the events that lowered your score. If you correct the behaviors that led to those events, work steadily to improve your credit, you can lay the groundwork to build up a better credit score.

What's in a credit score?

Credit scores such as the FICO® Score are based on your debt-management history, as recorded in your credit file. The scores are basically a summation of the way you've handled credit and bill payment. Good credit habits tend to promote higher credit scores, while poor or erratic habits tend to bring lower scores.

Here's a more detailed breakdown of the specific factors that influence your FICO® Score:

Public Information: If bankruptcies or other public records appear on your credit report, they can have severe negative impacts on your credit score.

Among consumers with a FICO® Score of 653, the average credit card debt is $13,429.

Payment history. Delinquent accounts and late or missed payments can harm your credit score. A history of paying your bills on time will help your credit score. It's pretty straightforward, and it's the single biggest influence on your credit score, accounting for as much as 35% of your FICO® Score.

Credit usage rate. To determine your credit utilization ratio, add up the balances on your revolving credit accounts (such as credit cards) and divide the result by your total credit limit. If you owe $4,000 on your credit cards and have a total credit limit of $10,000, for instance, your credit utilization rate is 40%. You probably know your credit score will suffer if you "max out" your credit limit by pushing utilization toward 100%, but you may not know that most experts recommend keeping your utilization ratio below 30% to avoid lowering your credit scores. Credit usage is responsible for about 30% of your FICO® Score.

Length of credit history. Credit scores generally benefit from longer credit histories. There's not much new credit users can do about that, except avoid bad habits and work to establish a track record of timely payments and good credit decisions. Length of credit history can constitute up to 15% of your FICO® Score.

Total debt and credit. Credit scores reflect your total amount of outstanding debt you have, and the types of credit you use. The FICO® Score tends to favor a variety of credit, including both installment loans (i.e., loans with fixed payments and a set repayment schedule, such as mortgages and car loans) and revolving credit (i.e., accounts such as credit cards that let you borrow within a specific credit limit and repay using variable payments). Credit mix can influence up to 10% of your FICO® Score.

Recent applications. When you apply for a loan or credit card, you trigger a process known as a hard inquiry, in which the lender requests your credit score (and often your credit report as well). A hard inquiry typically has a short-term negative effect on your credit score. As long as you continue to make timely payments, your credit score typically rebounds quickly from the effects of hard inquiries. (Checking your own credit is a soft inquiry and does not impact your credit score.) Recent credit applications can account for up to 10% of your FICO® Score.

Improving Your Credit Score

Fair credit scores can't be turned into exceptional ones overnight, and only the passage of time can repair some negative issues that contribute to Fair credit scores, such as bankruptcy and foreclosure. No matter the reason for your Fair score, you can start immediately to improve the ways you handle credit, which can lead in turn to credit-score improvements.

Look into obtaining a secured credit card. A secured credit card requires you to put down a deposit in the full amount of your spending limit—typically a few hundred dollars. Confirm that the As you use the card and make regular payments, the lender reports your activity to the national credit bureaus, where they are recorded in your credit files. (Making timely payments and avoiding "maxing out" the card will favor credit-score improvements.

Consider a credit-builder loan. Available from many credit unions, these loans take can several forms, but all are designed to help improve personal credit histories. In one popular version, the credit union places the money you borrow in a savings account, where it earns interest but is inaccessible to you until the loan is paid off. Once you've paid the loan in full, you get access to the funds and the accumulated interest. It's a clever savings tool, but the credit union also reports your payments to national credit bureaus, so regular, on-time payments can lead to credit-score improvements. (Check before taking out a loan to make sure the lender reports to all three national credit bureaus.)

Consider a debt-management plan. For families with finances stretched too thin to keep up with debt payments, a debt-management plan (DMP) can bring much-needed relief. Getting one requires you to work with a qualified credit counseling agency, who negotiates with your creditors to set up a workable repayment plan. It's a serious step that significantly lowers your credit score and effectively closes all your credit accounts, but it's less severe than bankruptcy, and it can help families in dires straits get back on their feet. Even if you decide a DMP isn't for you, meeting with a credit counselor (not a credit-repair company) may give you some new tools for building up your credit.

Pay your bills on time. Late and missed payments hurt credit scores, so avoid them. Take advantage of automatic payments, calendar alarms, and other automated tools—or just use sticky notes and a paper calendar. Do whatever you can to help you remember, and you'll soon take on good habits that favor credit-score improvements.

Avoid high credit utilization rates. High credit utilization, or debt usage. The FICO® scoring system bases about 30% of your credit score on this measurement—the percentage of your available credit limit represented by your outstanding payment balances. Try to keep your utilization across all your accounts below about 30% to avoid lowering your score.

Among consumers with FICO® credit scores of 653, the average utilization rate is 63.1%.

Try to establish a solid credit mix. You shouldn't take on debt you don't need, but prudent borrowing that includes a combination of revolving credit and installment debt, can be beneficial to your credit score.

Learn more about your credit score

A 653 FICO® Score is a good starting point for building a better credit score. Boosting your score into the good range could help you gain access to more credit options, lower interest rates, and reduced fees. You can begin by getting your free credit report from Experian and checking your credit score to find out the specific factors that impact your score the most. Read more about score ranges and what a good credit score is.

How Good Is Your Credit Score?

300 credit score301 credit score302 credit score303 credit score304 credit score305 credit score306 credit score307 credit score308 credit score309 credit score310 credit score311 credit score312 credit score313 credit score314 credit score315 credit score316 credit score317 credit score318 credit score319 credit score320 credit score321 credit score322 credit score323 credit score324 credit score325 credit score326 credit score327 credit score328 credit score329 credit score330 credit score331 credit score332 credit score333 credit score334 credit score335 credit score336 credit score337 credit score338 credit score339 credit score340 credit score341 credit score342 credit score343 credit score344 credit score345 credit score346 credit score347 credit score348 credit score349 credit score350 credit score351 credit score352 credit score353 credit score354 credit score355 credit score356 credit score357 credit score358 credit score359 credit score360 credit score361 credit score362 credit score363 credit score364 credit score365 credit score366 credit score367 credit score368 credit score369 credit score370 credit score371 credit score372 credit score373 credit score374 credit score375 credit score376 credit score377 credit score378 credit score379 credit score380 credit score381 credit score382 credit score383 credit score384 credit score385 credit score386 credit score387 credit score388 credit score389 credit score390 credit score391 credit score392 credit score393 credit score394 credit score395 credit score396 credit score397 credit score398 credit score399 credit score400 credit score401 credit score402 credit score403 credit score404 credit score405 credit score406 credit score407 credit score408 credit score409 credit score410 credit score411 credit score412 credit score413 credit score414 credit score415 credit score416 credit score417 credit score418 credit score419 credit score420 credit score421 credit score422 credit score423 credit score424 credit score425 credit score426 credit score427 credit score428 credit score429 credit score430 credit score431 credit score432 credit score433 credit score434 credit score435 credit score436 credit score437 credit score438 credit score439 credit score440 credit score441 credit score442 credit score443 credit score444 credit score445 credit score446 credit score447 credit score448 credit score449 credit score450 credit score451 credit score452 credit score453 credit score454 credit score455 credit score456 credit score457 credit score458 credit score459 credit score460 credit score461 credit score462 credit score463 credit score464 credit score465 credit score466 credit score467 credit score468 credit score469 credit score470 credit score471 credit score472 credit score473 credit score474 credit score475 credit score476 credit score477 credit score478 credit score479 credit score480 credit score481 credit score482 credit score483 credit score484 credit score485 credit score486 credit score487 credit score488 credit score489 credit score490 credit score491 credit score492 credit score493 credit score494 credit score495 credit score496 credit score497 credit score498 credit score499 credit score500 credit score501 credit score502 credit score503 credit score504 credit score505 credit score506 credit score507 credit score508 credit score509 credit score510 credit score511 credit score512 credit score513 credit score514 credit score515 credit score516 credit score517 credit score518 credit score519 credit score520 credit score521 credit score522 credit score523 credit score524 credit score525 credit score526 credit score527 credit score528 credit score529 credit score530 credit score531 credit score532 credit score533 credit score534 credit score535 credit score536 credit score537 credit score538 credit score539 credit score540 credit score541 credit score542 credit score543 credit score544 credit score545 credit score546 credit score547 credit score548 credit score549 credit score550 credit score551 credit score552 credit score553 credit score554 credit score555 credit score556 credit score557 credit score558 credit score559 credit score560 credit score561 credit score562 credit score563 credit score564 credit score565 credit score566 credit score567 credit score568 credit score569 credit score570 credit score571 credit score572 credit score573 credit score574 credit score575 credit score576 credit score577 credit score578 credit score579 credit score
Sign up for helpful tips, special offers and more!
You're signed up!
Our system is undergoing maintenance and will be available again soon.