At a Glance
A 635 credit score is below the US average and considered a "Fair" credit score. Your credit score is more significant because it decides whether you qualify for credit cards or loans and what the interest rate will be even if you do.
12.5% of Americans have credit ratings that fall in the “Fair” credit score range as of April 2021.
A credit score of 635 is not at all bad, but it is also not good either. Because of this, some lenders may reject credit applications from people with 635 credit score as having negative credit, while others may approve your loan but are likely to impose steep interest rates and costs. According to research, over 27% of consumers with credit scores in the “Fair” range are likely to become substantially delinquent in the future.
Is 635 Credit Score Good or Bad?
A credit score of 635 is neither good nor bad. FICO and VantageScore (the companies that produce the leading credit scoring models) have placed 635 in the fair credit score range.
By reviewing your credit report, you can learn what actions caused your credit score to be 635. You can start setting the foundation for a better credit score if you stop the activities that caused your score to decline.
What Impacts your 635 Credit Score?
Your debt-management history, which is reflected in your credit file, is typically used to calculate your credit score. The score is a reflection of your credit and bill-paying behaviour. Your credit score will rise if you have good credit habits, while fall if these are bad or irregular. Your 635 credit score is affected by several variables, including:
- Public information
- Credit Utilization Ratio
- Late or missed payments
- Length of credit history
- Total debt and credit mix
- Recent credit activity on your account
If bankruptcies or other public records appear on your credit report, it can severely impact your credit score as it indicates that you are a high-risk credit individual.
Credit Utilization Ratio:
To determine your Credit Utilization Ratio, add up the balances on your revolving credit accounts and divide them by the total credit limit. For example, if your credit card has a limit of $10,000 and you owe $1,500, your Credit Utilization Ratio is 15%. It is recommended that you keep your Credit Utilization Ratio within 30% to avoid lowering your credit scores. Credit usage is responsible for about 30% of your credit score.
Late or Missed payments:
Delinquent accounts, and late, or missed payments can harm your credit score. Making it a habit of paying your bills on time will help your credit score. It has the single biggest influence on your 635 credit score, which accounts for 35% of your FICO score.
Length of Credit History:
Along with other things, the length of your credit history is also a detriment to your credit score. The number of years you have been a credit user can influence up to 15% of your FICO score. NTC (New to Credit) users must be patient and careful to avoid destructive credit behaviours.
Total Debt and Credit mix:
If you have multiple credit accounts, revolving and installment credit, then the FICO credit score will usually work in your favour. On the other hand, if you have only one kind of credit account and your credit score is 635, it might help if you broaden your credit portfolio. The total debt and credit mix make up 10% of your total FICO score.
Recent Credit activity:
If you are someone who keeps applying for new loans and credit cards, your credit score might take a hit. Some companies trigger a check known as a hard inquiry when you apply for loans or credit cards. What happens during the hard inquiry is that the lender obtains your credit score to determine if you can get the credit line or not. Hard inquiries might drop your credit score by a few points, but it rebounds within a few months if you keep up with your credit card bills. New credit activity can account for up to 10% of your FICO scores.
What does a Credit Score of 635 mean for your Life and Finances?
There is an opportunity for growth even though a credit score of 635 is not always poor. A credit score of 635 will have a variety of effects on your life and finances. Your life and finances will be impacted in several ways if your credit score is 635, including:
- Personal loans with a high APR
- High-interest rates or refusal to approve unsecured loans
- Obtaining cell phone connectivity
- Having trouble finding apartments
- Cards with high-interest rates
Can you get a Credit Card with a 635 Credit Score?
Yes, you can get the Azpire Credit Builder Card to raise your 635 credit score. With a credit score of 635, obtaining a credit card is not very challenging, but there is a considerable risk that the lender would charge you considerably high interest, and other banks might deny your application; but not with Azpire. Even if you are a NTC (New to Credit) user, you can still get this secured credit card. Applying for it and then using it wisely is one of the greatest strategies you can use to repair your credit.
How to Improve your 635 Credit Score?
With good credit habits and dedication, your low credit score will gradually rise from 635 to a good (670-739) rating. Some of the ways that might help you increase your credit score are:
- Paying your bills on time
- Avoiding high credit utilization
- Debt management plan
- Credit builder loan
- Use a secured credit card
- Establish a credit mix
Paying your bills on time:
The secret to improving your credit score is to pay your obligations on time. This is the best course of action if your credit score is 635 and you're looking for ways to improve it.
Avoid high credit utilization rate:
Regardless of how many accounts you have, strive to maintain your credit utilization below 30% to prevent your 635 credit score from declining below.
Debt management plan:
A debt management strategy may be useful if you're having trouble making your credit card payments. To develop a feasible repayment schedule, you must work with a non-profit credit counselling organization. If you believe this is excessive, consult a credit counsellor to improve your 635 credit score.
Credit builder loan:
These small loans are provided by some credit unions and are intended to help NTC users establish credit. If you continue to make the required payments, these loans aid in the development of your credit.
Apply for a secured credit card:
A deposit equal to the entire credit limit is usually required for this, which often has a low credit limit of just a few hundred thousand dollars. The creditor reports to the three main credit bureaus your use of this card and prompt, consistent payments.
Look no further if you want to improve your 635 credit score by applying for a secured credit card.
Folks, meet the
Zolve Azpire Card
What is it?The Zolve Azpire card helps you build credit using your own money. It is a credit builder card that helps you start building your credit score from the first transaction. It is available to all, even if your credit score is 635.
We record every swipe of your Zolve Azpire card, and by the month’s end, we add up all the transactions for the month and report it to the bureaus so that your credit score gets built for a better financial future.
Establish a credit mix:
The FICO scoring algorithm favours users with many credit accounts and a range of loans, including installment loans like mortgages, auto loans, and home equity loans.
When you apply for loans or credit cards, you may encounter difficulties or high interest rates if your credit score is 635. You should therefore pay attention to this and work to raise your credit score. If you enhance your credit score from 635 to the good (670-739) range, you can have better access to loans, waived fees, favourable terms, and cheaper interest rates.