At a Glance
As of April 2021, 12.5% of Americans have credit scores in the “Fair” range. A credit score of 645, which is lower than the US average, is considered "Fair." More so than you might realize, your credit score greatly impacts whether you're approved for credit cards or loans and the interest rate you'll have to pay even if you are.
A 645 credit score is neither awful nor particularly outstanding. It lies somewhere at the edge of a good and a bad credit score. A credit score of 645 may indicate that you have previously struggled with credit. Due to this, some lenders may reject credit applications from borrowers with credit scores of 645 and consider them bad credit users. Others might agree to your loan request, but they'll probably charge you outrageous fees and interest rates. As a result, you will pay more interest rates than someone whose credit score is in the good range.
Is 645 Credit Score Good or Bad?
A 645 credit score is neither good nor bad. It falls between the two extremes. Given that it falls within the "Fair" credit score range, well-known credit scoring systems classify 645 scores as average.
You can discover the credit conduct that caused your score to be low by looking at your credit report. You can establish the foundation for a better score if you stop the activities that led to the decline in your credit score.
What Impacts your 645 Credit Score?
Information from your credit file, which contains information about your debt management history, is typically used to compute your credit score. Your credit and bill-paying habits affect your credit score. If you have solid credit habits, your credit score will go up; conversely, if you have negative or irregular habits, your credit score will go down. Several factors, such as the following, could have an impact on your 645 credit score:
- 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. Even though your credit score may increase before the bankruptcy report disappears from your record, there is a high possibility that lenders might refuse to work with you because of bankruptcy billing.
Credit Utilization Ratio:
To determine your Credit Utilization Ratio, add up the balances on your revolving credit accounts and divide them by your total credit limit. For example, if your credit card has a limit of $10,000 and you owe $2,500, your Credit Utilization Ratio is 25%. You should keep your Credit Utilization Ratio within 30% to avoid lowering your credit score. 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 improve your credit score. It is the biggest influence on your 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 645 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 credit account and your credit score is 645, it might help if you broaden your credit portfolio. The debt and credit mix makes up 10% of your total FICO score.
Recent Credit activity:
If you keep 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. During the hard inquiry, the lender obtains your credit score to determine if you can get the credit line. 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 645 mean for your Life and Finances?
Even though your credit score of 645 isn't always bad, there is room for growth. Your life and finances will be impacted with a 645 credit score. If your credit score is 645, for instance, it may have an effect on your life and finances in the following ways:
- Personal loans with a high APR
- High-interest rates or refusal to approve unsecured loans
- Obtaining cell phone connectivity
- Having trouble finding apartments
- Credit cards with high-interest rates
Can you get a Credit Card with a 645 Credit Score?
Yes, you can apply for the Azpire Credit Builder Card in order to raise your 645 credit score. The ability to obtain a credit card with a credit score of 645 is still possible, but there is a great likelihood that the lender will charge you a high interest rate and that other banks will reject your application. Even if your credit score is 645, you can still apply for a secured credit card like the Zolve Azpire Card without paying a hefty interest rate. Applying for this secured credit card is one of the best things you can do to enhance your credit.
How to Improve your 645 Credit Score?
Your low credit score will eventually increase from 645 to a decent (670-739) rating with consistent good credit behaviour and practice. The following are a few strategies that could aid you in raising your 645 credit score:
- 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 645 credit score is to pay your obligations on time. This is the best course of action if your credit score is 645 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 credit score from declining.
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 or consult a credit counsellor to improve your 645 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 improvement of your credit score.
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. Your FICO score is based on information from your credit files regarding how you have previously handled credit.
Look no further if you want to improve your 645 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 645.
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.
Your ability to obtain loans or credit cards may be hampered if your credit score is 645. This is important to know and you should take action to raise your 645 credit score. You may be qualified for better terms, cheaper fees, and lower interest rates if you improve your credit score from 645 to good (670-739).