636 Credit Score: What Does It Mean For You

A 636 credit score is fair so you may have some trouble getting good loan terms and credit offers. It’s not bad but there’s room for improvement. Knowing what a 636 score means, what affects credit scores and how to improve it will help you get better financial opportunities. This guide will show you your options and how to increase your score.

What is a 636 score?

This score is considered fair or average by most credit bureaus. It doesn’t get you premium credit card offers or the lowest loan rates but you can get credit though often with higher interest rates and fees.

Having a credit score in this range can get you some financial products though the terms may not be the best. It tells lenders you have some credit issues but also have room to improve.

Credit Cards

A 636 credit score may not get you the best credit cards with rewards and low interest rates but there are still options:

1. Secured Credit Card: Secured credit cards require a deposit so they’re available to those with average credit. They can help build credit if used responsibly. OpenSky is a good option.
2. Unsecured Cards for Fair Credit: These often come with annual fees and higher interest rates but no deposit required.
3. Store Credit Cards: Easier to get than standard credit card issuers, store cards can be a good way to start rebuilding credit. But they may have high rates so pay the balance in full each month.

Loans

When it comes to loans, a 636 score may limit the number of lenders that can offer you good terms. But you can still get a personal loan:

• Unsecured Personal Loans: Some lenders offer loans to fair credit borrowers though interest rates may be higher. You may still qualify for a car loan via a credit union as they tend to be more lenient.
• Debt Consolidation Loans: If you have existing debt, a consolidation loan can simplify your payments and potentially lower your overall interest rate.
• Cosigner Option: Having a cosigner with good credit can get you a better loan rate.

Credit Score Factors and Ranges

A credit score is a summary of your creditworthiness used by lenders to assess your financial stability. The reports from the credit bureaus is what makes up your score.

You may see multiple credit scores for yourself depending on where you’re viewing your score but overall credit score factors may be the same.

Here’s the factors used when calculating credit scores:

1. Payment History (35%)

Payment history has the biggest impact on your score. It shows how you’ve paid your bills over time. Late or missed payments and accounts in collections can hurt your score big time while a long history of on-time payments can help boost it.

2. Credit Utilization Ratio (30%)

Credit utilization is the amount of credit you’re using vs. your total credit limit on your credit card accounts. Keep your utilization below 30% and avoid a high credit card balance.

3. Length of Credit History (15%)

Length of history looks at the average age of all accounts and how long each account has been open. A longer history generally means higher credit score as it provides more information about your credit habits over time.

4. New Credit Inquiries (10%)

When you apply for new credit, a hard inquiry is added to your credit report. One or two inquiries may not hurt but multiple recent hard inquiries can hurt your score.

5. Credit Mix (10%)

Having multiple credit cards, auto loans, mortgages, etc. is good for your score as it shows you can handle different types of credit accounts responsibly.

Credit Score Range

Credit scores fall into the following ranges:

1. Poor (300-579): Scores in this range means you have major credit issues like missed payments or high debt.
2. Fair (580-669): A 636 score falls in the fair range and is an average credit score. It means you had some past credit issues and room for improvement.
3. Good (670-739): Scores in this range are good, means you’re managing credit responsibly.
4. Very Good (740-799): This range means you have a strong credit history with few negative marks.
5. Excellent (800-850): Scores in this range means you’re credit and financially perfect.

Now that you know what affects your score, here’s what to do:

How to Improve

• Pay on Time: Payment history is key. Set up reminders or automatic payments.
• Reduce Credit Card Balances: Lowering your utilization ratio can help a lot.
• Limit New Credit Applications: Applying for new credit too frequently can hurt your score.
• Check Your Credit Report: Monitor for errors that’s pulling down your score.

Building Credit from Zero with a 636 Score

Starting from scratch or rebuilding credit can take time but there are ways to do it:

1. Credit Builder: There are places like CreditStrong and Kovo that can help you build credit.
2. ExperianBoost: This service allows you to add qualifying payments like utilities or streaming subscriptions to your credit history.
3. Keep Balances Low: Use your card but keep balances minimal, pay as much as you can each month.

Check Your Credit

Regular credit check helps you stay on top of your score and detect issues:

• Errors: Mistakes on your credit report can hurt your score. Dispute errors with a credit repair company to fix them.
• See Results: Regular checks helps you see the progress of your efforts to improve.
• Prevent Identity Theft: Monitoring helps detect fraud which can affect your credit.

Summary

A 636 score has its challenges but there are many ways to improve it. Now that you know what affects your score and what to do, take action. For a more efficient credit improvement, sign up with Dovly AI. Our platform has the tools and expertise to help you boost your credit and achieve your financial goals. Start with Dovly AI today!