How to Build Your Credit Score From Fair to Good Credit
If you have fair credit, you’re just a little bit away from better interest rates. You may also gain access to higher credit lines if you can bump up your score. Typically, a ‘fair’ score ranges from 630 to 689, and a ‘good’ score ranges from 690 to 719. This article will go over several ways how you can build your credit score with fair credit. We will also define what a fair and good rating is according to FICO and Vantage measures.
What Factors into Defining a Good or Fair Credit Score?
Each lender has their own definitions of good and fair credit. However, many of them use the FICO and Vantage scores as a model. It is in your best interest to get your credit rating as high as you can. However, you won’t know how to fix them until you know what criteria they use to get your score. The credit bureaus base your FICO and Vantage scores on these factors in order of importance:
- Credit Card and Loan Payment History
- Total Debt Balances
- Credit History Length
- New Credit and Your Credit Account Types
- Payment History
- Age, Type of Accounts, Percent of Your Credit Limit That’s Used
- Total Debt and Balances
- Recent Credit Inquiries and Available Credit
The more of these things that are negative, the lower your credit score will be. The first thing you should do is pull your credit report for free from annualcreditreport.com. This will also tell you exactly what number your credit rating is sitting at. Once you know this, you can compare it to the table below and see what level your credit is classified.
|FICO Score||Vantage Score|
|Very Poor||300 to 579||300 to 549|
|Fair||550 to 669||550 to 549|
|Good||670 to 739||650 to 699|
|Very Good||740 to 799||700 to 749|
|Exceptional||800 to 850||750 to 850|
How Long Will It Take to Build Your Credit Score?
How long it takes to raise your credit score depends on two factors. The first one is how low it is to begin with. The second is how hard you’re willing to work at it. There are several ways you can begin to raise your credit score from fair to good. However, you have to be willing to work at it and be patient. This isn’t a quick fix, but it didn’t lower overnight either. You should also double check your credit report for errors. This could pull your score down even lower, and the quicker you dispute this the quicker it will be fixed. This next section will go over how to turn your fair credit rating to a good credti rating.
How Does This Score Hurt You?
The first thing you’ll notice is your interest rate. The lower your credit score is, the higher your interest rates will be. This is because lenders see you as a high risk for not paying back what you borrow. This interest rate can end up costing your hundereds of dollars each year. You might also find yourself getting denied for a credit card. If you managed to get a mortgage, you’d potentially pay a higher down payment as well.
Fair credit Card Recommendation: Capital One Platinum MasterCard
How Can You Fix and Build Your Credit Score?
There are several ways for you to start raising your credit. It will take time and patience, but it’s worth it for the lower fees and interest rates you’ll be offered.
- Ask Your Lender to Lower Your APR. If your APR is high, call your lender and ask them to lower it for you. This process can save your hundreds or thousands of dollars each you. You can use this money to pay down your debt faster.
- Pay Down Any Existing Balances. If you have any high balances, pay them down as quickly as you can. You want to end up with a credit utilization ratio of 30 percent or below. So if your credit line is $1,000, you don’t want to use more than $300.
- Pay Any Existing Collections Accounts. Once you have your current debt paid down, work on your collections accounts. These can have a negative impact on your credit score. You can get the name of the collection company from your credit report. Contact them and request to pay the balance off. If you can’t do this all at once, set up a payment plan and stick to it. You may also be able to negotiate a write off for some of the balance if you pay a certain amount.
- Pay Each Bill On Time, Each Month. Missing or late payments are reported to the credit bureaus. This can damage your score quickly, and they’ll keep adding on. Set alerts if you forget to send a payment. If you can do automatic payments, take advantage of it and use them.
- Open a Secured Credit Card. A secured card for fair credit can help you build your score up. You have to use this card responsibly for it to work in your favor though. The Discover it Secured Card or the Capital One Secured Mastercard are both good choices. You should only do this if you know you can make your payments on time. If not, wait on this step until you’re in a better place financially.
Build Your Credit Score and Improve Your Credit by Following these Steps
This article has gone over what fair and good credit scores are. We touched on FICO and Vantage definitions of the terms. We also talked about how a lower credit score could hurt you. Lastly, we offered several ways to build your credit score from fair to good. Lastly, if you follow the steps that are listed here, you should have success. It will take time, but your credit score should slowly go up.
CreditFast has reviewed the best credit cards for fair credit on the market. Some of the credit card offers are from our advertising partners. CreditFast has objectively reviewed the features and benefits of each credit card. We have chosen credit card offers for average credit based on our editor’s recommendations.