A fair credit score is usually defined as any score in the range of 640-699. Roughly 13.5% of people have fair credit, according to WalletHub data. The average person with fair credit is 47 years old and has an annual income of $54,000 per year.
Bear in mind that not all lenders define fair credit the same way. Some may have slightly lower standards, for example, starting the fair credit range as 620 and ending it at 659. Furthermore, fair credit is far from a life sentence. Graduating to good credit could take as little as one month, depending on your circumstances. You can see exactly where you stand and how long it will take to improve by checking your latest credit score for free on WalletHub.
In addition to free daily updates to your credit score and report, you will also get a personalized credit analysis. That guidance, combined with the additional fair credit info that you’ll find below, will help you reach Top WalletFitness® in no time.
Do I Have Fair Credit?
In addition to a score in the same range, people with fair credit tend to share other traits. For example, they usually have less than $5,000 in available credit.
You can see how you compare to the other credit tiers and to the average person with fair credit below:
|Category||Score Range||% of All Scores||Average Age||Average Income||General Qualifications|
|Bad||300-639||31.08%||52||$45,797||Behind on payments
High credit utilization
60+ days late on payment in last 90 days
Bankruptcy in last 3 years
|Fair||640-699||13.47%||47||$53,947||1+ credit cards/loans
Less than $5k in credit lines
60+ days late on payment no more than once in last 12 months
|Good||700-749||17.33%||45||$58,740||3+ years of credit history
$5k+ in credit lines
Not 60+ days late on payment in last 12 months
|Excellent||750-850||38.12%||41||$64,269||5+ years of credit history
$10k+ in credit lines
Never 60+ days late on payment
Never declared bankruptcy
Is a Fair Credit Score Average?
Some people use the terms “fair credit” and “average credit” interchangeably, and that’s fairly accurate. The average credit score is 695, according to WalletHub data, which is toward the high end of the fair-credit range.
Fair vs. Good Credit
There’s a big difference between fair credit and good credit. Not in terms of the actual credit score ranges, which aren’t separated by much. Rather, good credit scores grant you a lot more perks.
With a good credit score, you can look forward to:
- More attractive offers on loans and credit cards. Lenders naturally give more favorable terms to people who demonstrate more responsibility as borrowers. You’ll have a better chance of getting a rewards credit card. You’ll receive higher credit limits. And you’ll pay lower interest rates. For example, the average APR among credit card offers for people with good credit is 18.84%, while the average for fair credit is 23.05%, according to WalletHub’s latest Credit Card Landscape Report.
- Better chance of renting or leasing. The person from whom you rent/lease an apartment or car will likely check your credit score to see your payment history. People with good credit will seem more trustworthy.
- Greater likelihood of employment. An employer can’t check your credit score. But they can look at your credit report if they have your permission and a “permissible purpose.” Responsible payment history is what they’re looking for most.
- Lower insurance premiums. There is a strong correlation between higher credit scores and lower insurance premiums. And people with excellent credit save anywhere from 29% to 50%, depending on the state, compared to folks with no credit.
How to Improve Fair Credit
Improving your credit may take some time. But there certainly are some steps that you can take to put yourself on the path to Top WalletFitness®. The most important thing to do is to make good decisions consistently and to not fall back on old habits.
Here’s what you need to do:
- Dispute credit report errors/fraud. It’s important to regularly set aside some time to make sure everything on your report is valid. Removing mistakes and reporting fraud when you find them are easy ways to raise a lower score.
- Pay on time and reduce debts. Prompt payments on new charges are absolutely crucial for raising your score. When paying off already existing debts, take care of the ones with the highest interest rate first to avoid as much new interest as possible.
- Reduce your credit utilization. The amount of your available credit that you use each month comprises about 30% of your credit score calculation. Ideally you should use less than 30% of your credit line. The lower, the better.
- Get a no annual fee credit card. You won’t be able to qualify for great rewards or 0% rates until you reach good credit. So your objectives in the meantime should be to build credit and save money. A no annual fee credit card is the best tool for the job. And if you’re concerned about getting approved, you can always place a security deposit on a secured credit card.
Finally, make sure to sign up for a free WalletHub account. Not only will you receive free credit scores and reports updated daily, but you’ll also get a personalized credit analysis. This will tell you exactly how to improve (and even how long it will take). For more advice, check out WalletHub’s complete list of credit improvement tips.