Understanding Your 645 Credit Score

645 is a fair credit score. A fair credit score falls between the "poor" and "good" credit score ratings. Fair credit indicates a borrower may have issues with their debt obligations.

Borrowers with a 645 credit score may qualify for different types of installment loans, such as personal loans, mortgages, and auto loans. However, the loan terms may be less-than-ideal.

Borrowers can improve a 645 FICO score by reducing their personal debt, avoiding late payments, and using financial tools for credit rebuilding.

Too much credit card debt can decrease your credit score and result in excess interest fees. It can also increase your credit utilization rate, which is the percentage of available credit that you’re using on your credit accounts.

Generally, it’s best to avoid using more than 30% of your total available credit. Suppose you have two credit cards with a combined $10,000 credit limit. In that case, you should avoid carrying a balance higher than $3,000. If you have a lot of personal debt, you can pay it down faster by paying more than the minimum balance every month.

A late payment will result in a late payment charge. Most businesses charge a flat penalty of 1% to 1.5% of the overdue amount.2 And if a payment is more than 30 days late, it can end up on your credit report for up to seven years! Late payments on a credit report can significantly decrease your credit score and make it more challenging to increase your credit. Borrowers can improve their payment history by signing up for autopay or monthly payment reminders.

Your credit reports contain crucial financial information that helps lenders make approval decisions. Credit reports are generated by the three major credit bureaus. While it’s rare, mistakes do happen, and consumers may get incorrect information on one or more credit reports.

Monitoring your credit report can help you spot mistakes that are negatively affecting your credit. For example, a balance may be higher than it is, or a payment may be listed as late. If you spot an error on a credit report, you can dispute it with the credit bureau and have your information corrected. Removing inaccurate information may help boost your credit scores.