What Is a Fair Credit Score? [2022 Guide]

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In this article, we address all the various details surrounding a fair credit score. But what is considered a fair credit score? Any kind of loan or credit you decide to take out—including auto loans, mortgages, or student loans—requires lenders to know your credit score.

A credit score is significant in helping to determine how much of a loan you qualify for, as well as the various interest rates on the loan and any other legal requirements associated with taking out a loan.

What Is Fair Credit?

What is considered a fair credit score? Before we define what a fair credit score is, we should answer the question: What is a bad credit score? A credit scoring system typically starts at a low 300 (representing a bad credit score) and increases to 850 (a strong credit score). A fair credit score range is between 580 and 669 points.

Two companies dominate the credit scoring industry: FICO and VantageScore. Having a fair FICO or VantageScore credit score means that you don’t have bad credit, but you don’t have great credit either. An average score is what most people tend to have if they aren’t strict about keeping up with their credit payments or loan repayments. Your credit score will affect your rental applications, loan applications, and credit card qualifications.

Your Credit According to FICO and VantageScore

What is a FICO score vs VantageScore? For many years, both companies used different metrics to determine your credit score. But in 2013, VantageScore updated their metric system, matching that of FICO’s.

Both companies now use the same scoring ranges of 300 to 890 on their credit scale (300 = bad credit, and 890 = good credit).

How Do the Different Models Work?

How different is a FICO score vs VantageScore? Both a FICO credit score and a VantageScore have different prerequisites set by state policies and laws.

FICO requirements before applying for a rating include:

  • A six-month tradeline trial period.
  • An account that’s at least six months old.
  • An active account.

VantageScore requirements are less restrictive. You must have:

  • A valid, active account.

This makes it much easier to qualify for loans, credit cards, and a variety of other financial products.

Both companies apply different points to your financial history. So when considering a credit score, it’s important to find the best credit cards for fair credit rates, making sure that you can effectively manage your payments. The idea is to encourage prospective clients to apply for a credit card with a fair credit score, take out a loan, or effectively use borrowed money to better manage financial assets in terms of ur credit data,

Comparing FICO and VantageScore Rating Systems

Each system utilizes a different set of standards to determine your credit score over time.

FICO Score Range

Excellent 800 – 850
Good 740 – 799
Fair 670 – 739
Poor 580 – 669
Very Poor 300 – 579

FICO considers:

  • Money owed: 30%
  • Credit type mix: 10%
  • Payment history: 35%
  • Length of credit history: 15%
  • New credit: 10%

These reports are continually generated. As your rating changes, so do your prospective credit-related options. FICO ratings can be highly coveted in the world of high finance, yet possess some obvious pitfalls for entry-level clients, e.g., the need for a six-month trial period.

Various rating agencies and credit bureaus are viewed differently by different lenders, businesses, and credit card providers.

There are also many benefits provided through using varied account types, such as rotating loan agreements with low-interest rates, good auto loans while maintaining a good, steady income to expense ratio. This can also be important when trying to maintain a steady fair credit score.

Focusing on a variety of savings options, job offers, and trading on the financial markets can help improve credit reports and your finances.

Pay particular attention to:

  • Recent activity of credit accounts.
  • The type of credit you’re using.
  • The length of your credit usage.
  • The number of credit accounts you have.

VantageScore Range

Excellent 781 – 850
Good 661 – 780
Fair 601 – 660
Poor 500 – 600
Very Poor 300 – 499

What Is a VantageScore?

VantageScore provides a variety of benefits for those who use a fixed balance of quick, short-term credit-based transactions, as well as standard long-term mortgages, auto loans, and credit card agreements.

VantageScore has a system that favors an easy measurement plan based on your transactions, available credit, and standing balance. It also tends to respect a wider mix of credit-based accounts and loan agreements—from a mixture of small loans and clothing accounts to auto loans and mortgages, regardless of how long you’ve had the account.

FICO or VantageScore do not consider your address, age, salary, or race. And they don’t conduct soft inquiries on your prior credit accounts or agreements, as well higher interest rates or even poor credit.

Each private lender or loan company, however, may have different alternatives for those who have taken borrowed money—a fair or poor credit score may not always be preferable.

A mortgage of $250,000 for 30 years with a VantageScore of 530 can be quite risky to handle. It could also mean a difference of $50.00 to $75.00 when looking at the same loan with a VantageScore of 730.

Always try to get the highest credit score possible to garner the best savings. To gain a higher score, consider ways of how to fix your credit scores, such as saving more, quickly paying off expenses, and managing your loans and accounts. This will help boost your fair credit vs good credit ratio.

Good vs Fair Credit Score

There’s a big difference between a good credit score and a fair credit score when you consider how it’s compounded over time. Setting up a credit scoreboard will help ensure your chances of having the best credit score, and it will ultimately save you money.

There are many benefits in having a good credit score over a fair one, such as:

  • Access to cheaper and more available credit.
  • A wider variety of financial products and options.
  • A better financial slate.

Those who have good credit ratings tend to be favorably looked upon by the Internal Revenue Service (IRS).

How to Improve Your Fair Credit Score?

Improving your credit score is not as difficult as you think. Consider these ways to better your score:

  • Make payments on time.
  • Keep credit levels low.
  • Retain your income.
  • Properly manage loans, mortgages, or credit cards.
  • Only applying for credit when you need it.
  • Avoid opening too many accounts.

Consider using such software as Experian to regularly check your credit rating, and use it to adjust your spending under the type of rating you’d like to achieve.

FICO vs Experian Differences

You’ll find that there aren’t many differences when utilizing either company’s software for credit checks. But there are differences in the types of accounts they provide.

For more traditional bank accounts or credit card holders, consider FICO, due to their six-month account minimum.

Experian is more fluid in terms of its credit check system and will give you a score that works well for any type of account, regardless of how long it has been open. This is, in essence, simply giving you access to your FICO score through a third-party app and allows you to check others’ scores as well.

By regularly utilizing such software, you not only keep up with your daily credit rating but also helps you reach a good credit score.

Credit Cards and a Fair Credit Score

Using credit cards to try to improve a fair FICO credit score can be difficult, especially when you consider how high the various rates apply. You should avoid using credit cards as much as possible to maintain a good credit rating. But being able to maintain and correctly manage a credit card can also reflect well on your credit score.

It’s a delicate tightrope to walk—being too eager to use your credit card for quick, easy purchases and at the same time being able to afford fixed payment terms, plus the annual or monthly fees.

Three of the more prominent credit cards to consider include:

AvantCard

The affordable, variable APR credit rate on this card starts at around 25% and comes with an annual fee of $39.00.

CapitalOne Platinum

This credit card comes with a variable APR of 26% and no annual charge.

CapitalOne QuicksilverOne Cash Rewards

This card costs a little more but offers several discounts at particular stores and businesses. It offers a 26% variable APR with a $39.00 annual payment.

Conclusion

To maintain a good credit rating, focus on safeguarding the aforementioned practices. The better your credit rating, the better your options in case of an emergency. Maintaining a fair credit score is good practice, but you’ll need to work a little harder and more closely with your credit records and financial accounts to maintain a sustainable balance.

Manage your credit cards closely. Any agreement with a variable APR should be monitored and handled with caution for financial security. And ensure that interest rates are always manageable.

FAQ

Is a fair credit score good?

A fair FICO or VantageScore credit score can be good, but a good credit score is always better. Your credit scores are ranked from 300 to 800, each with their unique categories, e.g., 300 – 400 = bad; 500 – 730 = good.

Can you get a mortgage with a fair credit score?

You can get a mortgage with a fair FICO or VantageScore credit score. But you’ll likely incur higher interest rates on most of your mortgages. Pay attention to higher fixed APRs or variable ones, as well as incurred annual or monthly fees.

Can you get a small bank loan with a fair credit score?

A fair credit score is good to have when applying for a small bank loan, as long as it’s manageable. A good credit score is always preferred to a fair one in applying for a loan, as you’ll receive preferable rates and applicable (or no) fees.

ABOUT AUTHOR

I learned a lot about finance after working for a digital marketing company specializing in investing and trading stocks, forex, etc. After that, I got exposed to other verticals such as wealth management and personal finance, which further improved my understanding of the financial world.

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