Financial Education

Understanding Your 639 Credit Score

A 639 credit score falls within the “fair” credit category, which ranges from 580 to 669. People with this score may struggle to get approved for certain loans. Improve it by making on-time payments and paying off as much of your loan and credit card balances as possible.

Lenders consider individuals with “poor” or “fair” credit to be subprime borrowers.

Most financial institutions have a minimum credit score requirement. Some lenders only work with good credit scores, which are higher than 670 points. By improving your credit score, you could increase your lending options and secure better terms.

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Key Takeaways for a 639 Credit Score

Overview of Your Rating

639 is a fair credit score. Fair credit indicates that a borrower is a moderate credit risk. Many borrowers with fair credit have a history of late payments or too much credit card debt.

Borrowing Options

You may still be eligible for various types of secured and unsecured loans. However, rates and terms on financial products will be less than ideal.

Improving Your Score

You can steadily improve your credit score over time by avoiding late payments, reducing your credit usage, and limiting your credit inquiries.

Is a 639 Credit Score Good?

FICO is a data analytics firm whose credit scoring model is used in 90% of lending decisions.1 A 639 FICO Score is categorized as “fair.” But if you can raise your current score by 31 points, you can upgrade to the “good credit” category, which includes scores between 670 and 739. Good credit scores generally receive better rates and terms on loans and credit cards.

Pro Tip: Many lenders look beyond just the score. Consistent income and recent payment history can still unlock opportunities.

US Population Credit Score Distribution

Poor

Fair

Good

Very Good

Exceptional

300-579

580-669

670-739

740-799

800-850

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Personal Loans

You may be eligible for a personal loan with a fair credit history. Most online personal loan lenders have flexible credit score requirements, so you could qualify for quick cash loans. Personal loans can provide small or large lump sums, which makes them ideal for all types of unexpected expenses.

Bank Loans

Your eligibility for a bank loan depends on the financial institution and the loan type. Banks offer various financial products, such as mortgages, home equity loans, and unsecured loans. It may be easier for you to get approved for secured bank loans with fair credit. While you could qualify for an unsecured loan, be prepared for an unattractive interest rate.

Credit Cards

Credit card issuers usually require good credit for qualification. If you do get approved for an unsecured credit line, your annual percentage rate (APR) may be excessively high. According to a Bankrate survey, the highest APR on a credit card is currently 33.24%!²

If you want to get better loan deals in the future, consider secured credit cards instead. Responsibly managing a secured card can improve a fair credit score over time. However, in order to qualify, you must provide a refundable security deposit.

These are some of the best secured card options:

• Capital One Platinum Secured Card (minimum $49 deposit)

• First Progress Platinum Elite Mastercard® Secured Card (minimum $200 deposit)

• Discover it® Secured Credit Card (minimum $200 deposit)

• Chime Credit Builder Secured Visa® Credit Card (no deposit; uses linked checking account)

• BankAmericard® Secured Card (minimum $200 deposit)

• OpenSky® Plus Secured Visa® Credit Card (minimum $300 deposit)

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Action Plan

How To Improve Your 639 Credit Score

Consumers can improve low credit scores by following these helpful financial tips:

Reduce Your Credit Usage

Your total credit card balance can negatively affect your credit score. If you want to improve your score quickly, focus on debt repayment. Ideally, you should not use more than 30% of your total credit limits. The best way to pay off credit card debt is to pay more than the minimum every month.

If you’re struggling with high interest rates on multiple cards, you can also try consolidating your debt with a balance transfer credit card. Just ensure that your new rate is lower and that the balance transfer fees do not outweigh the benefits.

Limit Your Credit Inquiries

You can improve low credit scores by limiting the number of credit inquiries you make. Every loan application you make will stay on your credit report for two years and decrease your current credit score by a few points. Too many inquiries on a credit report can negatively impact your credit profile and make you appear financially unstable. It’s in your best interest to avoid having more than six credit inquiries on a credit report.

Monitor Your Credit Reports

Your credit reports directly affect approval for financial products, insurance, and housing. That’s why it’s crucial to monitor your credit reports at least once a year. You can download your free credit report from each of the major credit bureaus through the Annual Credit Report website. Monitoring your reports can help you identify errors that decrease your credit score.

Can I Buy a House With a 639 Credit Score?

It is entirely possible to buy a home with a 639 FICO Score. However, your rates will depend on the type of mortgage you get, as well as other factors. Many borrowers with low credit use FHA loans to purchase a primary residence.

An FHA loan is a mortgage backed by the United States Federal Housing Administration. FHA loans are meant for prospective home buyers with low credit and low to moderate income. Since your credit is higher than 580, you could provide a down payment as low as 3.5% of the home’s purchase price! Talk to an FHA-approved lender for more information and to see if you qualify.

Mortgage Type

Description

Credit Score Requirements

Key Features

FHA Loan

Insured by Federal Housing Administration.

As low as 500 with 10% down.

Lower down payment requirements.

VA Loans

Backed by Dept. of Veterans Affairs.

Typically 620 (varies by lender).

No down payment required; no PMI.

USDA Loans

For homebuyers in rural/suburban areas.

640 for automatic underwriting.

No down payment required.

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