653 Credit Score: Understanding Its Impact and How to Improve It

A 653 credit score places you in the “fair” category, offering both opportunities and challenges in securing loans and credit. While approval for financial products like auto loans, credit cards, and personal loans is possible, you may face higher interest rates and stricter terms. Understanding how your score is calculated, dispelling common credit myths, and taking steps to improve your credit can help. Services like Dovly AI can guide you through credit monitoring and repair, helping you boost your score and unlock better financial opportunities. Sign up with Dovly to start your credit improvement journey today!

A credit score is one of the most important numbers in your financial life. With a 653 credit score, you fall into a middle ground—neither excellent nor poor, but still with room for improvement. Understanding what a 653 score means, how it affects your financial opportunities, and what steps you can take to improve it can help you better manage your financial future.

In this blog, we’ll explore the significance of this score, how credit scores are calculated, common myths, and how credit repair and monitoring services, such as Dovly AI, can help boost your score.

Credit score scale

Understanding a 653 Score

A credit score of 653 is considered a fair credit score. This score is a key indicator used by lenders to assess the risk of lending to you. Essentially, a higher score suggests lower risk and better creditworthiness.

What This Means for Financial Access

With this score, you might encounter some hurdles when seeking approval for loans and credit products with the most favorable terms and rates.

However, it’s not all doom and gloom. While you may face higher rates and stricter terms, approval is still possible.

Common Financial Opportunities with This Score

While this score may limit some opportunities, there are still financial products you can access, including:

  • Auto loans: You may qualify, though with higher rates.
  • Credit cards: Cards for fair credit are available, though with lower limits and higher interest.
  • Personal loans: You may be approved, but often with stricter terms and conditions.

Understanding Credit Scores

Credit scores are calculated based on several factors. These scores are derived from the information in one’s credit file, which includes details like payments and public records:

  • Payment history: Accounting for 35% of your score, missed payments are critical.
  • Credit utilization ratio: This measures how much of your credit you’re using and contributes 30% to your score.
  • Length of credit history: The longer your account(s) have been open, the better, as it shows stability.
  • New credit inquiries: Each time you apply for credit, a hard inquiry may lower your score slightly.
  • Credit mix: A variety of account types, such as credit cards and loans, shows lenders you can manage different forms of debt responsibly.

Credit Score Range and What it Means in Different Credit Scoring Models

Scores are classified into different ranges:

  • 300-579: Poor. You may have trouble getting approved for most loans or credit cards.
  • 580-669: Fair. Financial products are available, but often with higher interest rates or fees.
  • 670-739: Good. You’re seen as a low-risk borrower and can qualify for better terms.
  • 740-799: Very Good. You’ll have access to more favorable rates and products.
  • 800-850: Excellent. You qualify for the best financial products and lowest rates.

Boost your credit score by 79pts!

Credit Myths: What to Believe and What to Ignore

There are several common myths about credit that can be misleading:

  • Myth 1: Checking your credit score lowers it. Fact: A soft inquiry from checking your score doesn’t affect it.
  • Myth 2: Closing old account(s) improves your score. Fact: Closing accounts can shorten your history and lower your score.
  • Myth 3: You only have one credit score. Fact: You have multiple scores from different credit bureaus and scoring models.
  • Myth 4: Having a high credit limit is bad for your credit. Fact: A high credit limit can positively impact your credit utilization ratio.

Next Steps

Taking Control of Your Credit Future

Improving your credit isn’t just about getting better financial products—it’s about securing a stable financial future. By taking steps to understand your score and build positive habits, you can steadily increase to a good credit score.

Services like Dovly AI can assist in this journey by helping you monitor and repair your credit, empowering you to take control of your financial well-being.

Monitoring

Monitoring your credit regularly is essential for maintaining and improving your score. It helps you detect errors early, track your progress, and spot signs of fraud. By monitoring your credit report, you can ensure any mistakes or unauthorized activity are addressed quickly.

Repair

Repairing your credit is essential when errors or negative items affect your score. Here’s some credit repair steps:

  1. Review Reports: Access your credit reports from Experian, Equifax, and TransUnion through AnnualCreditReport.com.
  2. Identify Errors: Review for mistakes like incorrect personal info, wrong account statuses, or unfamiliar accounts.
  3. File a Dispute: Submit a dispute to the relevant credit bureau, either online or by mail.

Building and Improving Your Credit Utilization Rate

Individuals with fair credit scores, such as a 653, can improve their scores by following certain strategies. To improve your credit, focus on:

  • Paying bills on time: Late payments negatively affect your score, so setting up automatic payments can help.
  • Keeping balances low: Using less than 30% of your available credit can improve your utilization ratio.
  • Limiting credit applications: Multiple hard inquiries can reduce your score, so apply for credit only when necessary.
  • Maintaining a variety of credit types: A mix of credit accounts shows lenders that you can manage different forms of debt responsibly.

Man checking his credit score on his phone.

Summary

In summary, a 653 credit score presents both challenges and opportunities for financial growth. Understanding its implications is crucial to enhancing your creditworthiness. Focus on correcting inaccuracies, making timely payments, and managing your credit utilization to improve your score over time.

By debunking common credit myths and regularly monitoring your credit, you can catch issues early and stay on track. Taking proactive steps now will lead to better financial opportunities and a more secure financial future

To accelerate your credit improvement journey, consider enrolling in Dovly AI’s credit repair and monitoring services. Dovly uses advanced technology to help you repair your credit, monitor progress, and achieve your financial goals faster.

Enroll in Dovly AI today and receive a TransUnion report and score, plus disputing capabilities – for FREE!

Frequently Asked Questions

Is a credit score of 653 ok?

A credit score of 653 is considered “fair.” While it’s not ideal, it indicates that you have some credit history and have managed it reasonably well. This score may limit your options, or you may face higher interest rates and less favorable terms when applying for credit, but isn’t a barrier to basic financial products. Strengthening your credit habits—like paying bills on time and reducing debt—can help boost your score into the “good” range. Need help with that? We’re here to help! Sign up for Dovly and start improving your credit score for free!

Can I buy a house with a 653 credit score?

Yes, you can buy a house with a 653 credit score, but it may be more challenging. Many lenders might approve your mortgage application, but you may encounter higher interest rates and stricter terms. Some government-backed loans, like FHA loans, may be available to you with a 653 credit score. These loans often have more lenient credit requirements, making homeownership more accessible.

Can I get a car loan with a 653 credit score?

You can get a car loan with a 653 credit score. However, you might face higher interest rates than borrowers with higher scores, so it’s essential to shop around for the best loan terms. Want to stop paying extra fees? Sign up for Dovly and start improving your credit score for free!

Can I get an apartment with a 653 credit score?

Many landlords and property management companies will consider applicants with a 653 credit score. However, some may require additional documentation or a larger security deposit due to the fair score. If your credit score is a concern, be prepared to explain any negative marks in your credit history. Providing evidence of consistent income and a strong rental history can help alleviate landlord concerns. Another option would be to sign up for Dovly and start improving your credit for free!
Tedis Baboumian
Tedis Baboumian is Dovly’s Co-Founder and Chief Credit Officer. With over 20 years of experience in the consumer credit industry, Tedis is an authority on the credit industry and has cultivated dee… Read More