What is a 640 credit score?
640 FICO® credit ratings are in the poor to fair range, indicating the individual has had some credit difficulties such as 30-day late payments. People with significant difficulties on their credit records, such as bankruptcies or foreclosures, will see a significant drop in their FICO® Scores, but these incidents can be overcome after a few years.
A credit score is a three digit figure that indicates a person’s credit worthiness and the possibility of prompt loan repayment. People with good credit are more likely to be offered better terms and a wider selection of loan options. Credit scores of 700 or greater are considered good, indicating that you are a suitable candidate for financing and have a lower chance of default. A score of 750 or higher is considered exceptional.
Is a Credit Score of 640 Good or Bad?
The answer to “Is 640 a good Credit Score?” is no, it is not “excellent” but it isn’t bad either. In fact, it usually falls into the category of reasonable. It may be difficult to secure a mortgage with a 640 credit score, and credit rehabilitation may be required to improve your chances of acceptance. It may also make it more difficult for you to get work or rent an apartment. Furthermore, compared to a customer with a credit score of 700 or above, it might cost you thousands of dollars in extra interest over the life of a mortgage.
Can You Buy a House With a 640 Credit Score?
Although it is very possible, most lenders will need a better score. You may be asking if there is a specific credit score that qualifies a person to buy a house. The truth is that there is no set score that guarantees an approval and it varies based on the loan type. However, there are many loan options with a credit score of 640. This is based on the assumption that you are purchasing a home that is within your financial means and that you are able to secure a mortgage that meets your needs. If all of the following is true and you’re considering applying for a mortgage, a score of 640 is a safe bet that you’ll be approved for a loan.
Can I Get a Car With a 640 Credit Score?
Whether shopping for a mortgage or a car loan, it’s a good idea to check your credit ratings and see how they can affect the terms offered by auto lenders for a used or new car loan. Aside from that, double-check your credit reports for any errors that could lower your score. Credit ratings have a big impact on your ability to secure a car loan and the interest rate you’ll be offered.
How to Improve a 640 Credit Score?
Here is how to improve your 640 credit score:
- Apply for a secured credit card.
- Take out a credit-building loan if you want to improve your credit.
- Make a debt-management strategy.
- Pay your bills on time.
Credit utilization is a term that describes how the balances on your monthly credit card statements correspond to the credit limitations. For example, if the credit limit on a credit card is $1000 and your balance is $900, you have a high credit utilization. So, one way to improve credit scores is to ensure the credit utilization is always below 30%. In that same scenario, the balance should always be below $300. Three ways to lower your utilization are making larger payments, paying your bill a couple of times a month to reduce balances and spending less. One other option is to request greater credit limits, however this is more difficult to manage if you are not responsible.
For more information on how to improve your credit score and get a better mortgage contact Mortgage Rates Today at 877-879-7775
Last Updated on 05/25/2022 by Mark Verhoeven
Financial Consultant and Author