If you have a credit score of 656, you may be wondering how it affects your financial situation and what steps you can take to improve it. In this article, we will explore the basics of a 656 credit score, the factors that influence it, and provide tips on how to boost your creditworthiness.
Understanding a 656 Credit Score
A credit score of 656 falls within the fair credit range, which typically ranges from 580 to 669. While it’s not excellent, it’s also not poor. Lenders consider this score when determining your creditworthiness for loans, credit cards, and other financial products.
Factors Affecting Your 656 Credit Score
Several factors contribute to your credit score, and understanding them can help you make informed decisions to improve your creditworthiness. The main factors include:
1. Payment History: Your payment history accounts for about 35% of your credit score. Consistently making on-time payments positively impacts your score, while late payments can lower it.
2. Credit Utilization: This factor accounts for approximately 30% of your credit score. It measures how much of your available credit you are using. Keeping your credit utilization below 30% is generally recommended.
3. Length of Credit History: The length of your credit history contributes around 15% to your credit score. Having a longer credit history can be beneficial, as it shows lenders how you manage credit over time.
4. Credit Mix: The variety of credit accounts you have, such as credit cards, loans, and mortgages, impacts around 10% of your credit score. A healthy mix of credit types can positively influence your score.
5. New Credit Inquiries: Applying for new credit accounts or loans can temporarily lower your credit score. This factor makes up about 10% of your credit score.
Tips to Improve Your 656 Credit Score
If you have a credit score of 656 and want to improve it, consider the following tips:
1. Pay Your Bills on Time: Consistently making on-time payments is crucial for improving your credit score. Set up payment reminders or automatic payments to avoid missing due dates.
2. Reduce Credit Card Balances: Aim to keep your credit card balances below 30% of your available credit. Paying down debt can have a positive impact on your credit score.
3. Avoid Opening Multiple New Accounts: While it’s important to have a mix of credit, opening too many new accounts within a short period can lower your score. Only apply for credit when necessary.
4. Check Your Credit Report: Regularly review your credit report for errors or discrepancies that could be negatively impacting your score. If you spot any inaccuracies, dispute them with the credit bureaus.
5. Be Patient: Improving your credit score takes time. Focus on consistent positive financial habits, and you will see gradual improvements over time.
FAQs about a 656 Credit Score
1. Can I get a loan with a 656 credit score?
While a credit score of 656 may not qualify you for the best loan terms, you can still find lenders who are willing to work with you. However, you may face higher interest rates or stricter requirements.
2. How long does it take to improve a 656 credit score?
The time it takes to improve a credit score varies depending on individual circumstances. Consistently practicing good credit habits, such as making on-time payments and reducing debt, can help improve your score over time.
3. Will a 656 credit score affect my ability to rent an apartment?
Some landlords may consider a credit score of 656 acceptable, while others may have stricter criteria. It’s best to be prepared by demonstrating other positive rental qualities, such as a stable income or good rental history.
4. Can I get a credit card with a 656 credit score?
Many credit card issuers offer options for individuals with fair credit scores. Look for credit cards specifically designed for people in this credit range to increase your chances of approval.
5. How can I monitor my 656 credit score?
There are several ways to monitor your credit score. You can sign up for free credit monitoring services, use online credit score platforms, or check your credit score through your bank or credit card provider.