When it comes to credit scores, knowing where you stand is essential for your financial health. A credit score of 639 falls into the “Fair” category, sitting just below the threshold for what is generally considered “Good” credit. While it’s not the worst score, it can affect your ability to secure loans, credit cards, and even rental agreements. If you have debt weighing you down, your score may be impacted even further—but the good news is that you have options to regain control of your finances.
If you’re wondering whether 639 is a good credit score, what it means for your financial opportunities, and how you can improve it, this guide has you covered.
Understanding Credit Scores
Credit scores typically range from 300 to 850, with higher scores indicating better creditworthiness. These scores are derived from the information in your credit reports, which are maintained by the three major credit bureaus: Experian, Equifax, and TransUnion. Credit scoring models, like those from FICO and VantageScore, analyze various factors in your credit report to assign your score.
The ranges are generally classified as follows:
| Credit Rating | Score Range |
|---|---|
| Excellent | 800-850 |
| Very Good | 740-799 |
| Good | 670-739 |
| Fair | 580-669 |
| Poor | 300-579 |
Excellent (800-850):
Individuals with an excellent credit score of 800-850 are considered top-tier borrowers. They have a proven track record of managing credit responsibly, which makes them highly attractive to lenders. People with excellent scores receive the best interest rates and terms on loans and credit cards. This category reflects a strong history of timely payments, low credit utilization, and long-standing credit accounts, all contributing to their high creditworthiness.
Very Good (740-799):
Borrowers in this category are seen as very dependable. They are likely to receive favorable loan terms and interest rates, although not as advantageous as those offered to individuals with excellent credit.
Good (670-739):
This range indicates a solid credit history with few minor issues. Borrowers with good credit scores are generally approved for most credit products, although they might not get the lowest available interest rates.
Fair (580-669):
This category includes individuals who have experienced some credit difficulties. They might have late payments, high credit utilization, or other negative marks on their credit reports. Lenders see them as higher risk, so they often face higher interest rates and less favorable loan terms.
Poor (300-579):
Borrowers in this range have significant negative issues in their credit history, such as defaults, bankruptcies, or numerous late payments. They find it very challenging to obtain credit, and when they do, it’s often at very high interest rates and with strict terms.
A score of 639 falls into the “Fair” category, just below the “Good” range. This positioning has several implications for your financial standing, impacting your ability to borrow money, the cost of that borrowing, and even aspects of your daily life such as renting an apartment or purchasing insurance.
Implications of a 639 Credit Score
- Loan Approval: While a score of 639 isn’t the worst, it may limit your ability to qualify for loans, especially those with favorable terms. Lenders may consider you a higher risk, which can lead to more rejections or the need for additional documentation to secure approval.
- Interest Rates: If you do qualify for loans or credit, you’re likely to face higher interest rates compared to those with higher scores. This is because lenders compensate for the perceived higher risk by charging more for borrowing.
- Credit Card Options: You may not be eligible for premium credit cards that offer the best rewards and lowest interest rates. Instead, you might have to rely on cards designed for building or repairing credit, which can come with higher fees and lower credit limits.
- Rental Applications: Landlords often check credit scores as part of the rental application process. A score of 639 might make it harder to secure rental agreements in competitive markets, or you might be asked to pay a higher security deposit.
- Insurance Premiums: Some insurance companies use credit scores to help determine premiums. With a 639 score, you might face higher rates for auto and home insurance.
Steps To Improve Your Credit Score
Raising a Fair credit score takes time, but small, consistent steps can make a big difference. Whether your score is affected by past financial struggles or high debt levels, you can take action today to build better credit.
1. Get A Secured Credit Card
A secured credit card requires a refundable deposit, which acts as your credit limit. Using it responsibly—keeping balances low and making on-time payments—can help rebuild your credit, as activity is reported to national credit bureaus.
2. Consider A Credit-Builder Loan
Credit unions offer credit-builder loans that help establish positive payment history. The loan amount is held in a savings account until it’s fully paid off, at which point you gain access to the funds—plus any interest earned. Just ensure the lender reports payments to all three major credit bureaus.
3. Explore A Debt-Management Plan
If debt is overwhelming, a debt-management plan (DMP) could help. A credit counseling agency negotiates with creditors to create a structured repayment plan. While this temporarily impacts your credit score, it’s a better alternative than bankruptcy and can help you regain control. Even if a DMP isn’t right for you, speaking with a certified credit counselor can provide valuable financial strategies.
4. Pay Bills On Time
Late or missed payments are a major factor in low credit scores. Set up automatic payments, calendar reminders, or budgeting tools to stay on track. Consistency in on-time payments leads to long-term credit improvement.
5. Keep Credit Utilization Low
Your credit utilization rate (how much of your available credit you’re using) makes up about 30% of your credit score. Ideally, keep it below 30%—but the lower, the better. Among consumers with a 639 FICO® score, the average utilization rate is 52.8%, which may be dragging their score down.
6. Maintain A Healthy Credit Mix
A good mix of revolving credit (credit cards) and installment loans (auto, student, or personal loans) can positively impact your score. However, avoid unnecessary debt—only borrow what you can manage.
Frequently Asked Questions
1. Can I get a loan with a 639 credit score?
Yes, you can get a loan with a 639 credit score, but you may face higher interest rates and less favorable terms compared to borrowers with higher credit scores. It’s important to shop around and compare offers from different lenders to find the best possible terms. Additionally, you may need to provide more documentation to prove your creditworthiness.
2. How long does it take to improve a credit score from 639 to 700?
The time it takes to improve your credit score depends on various factors, including your current credit situation and the steps you take to improve it. With consistent efforts such as paying bills on time, reducing credit card balances, and avoiding new credit inquiries, you may see improvement within a few months to a year. It also helps to maintain a low credit utilization ratio and avoid any negative marks on your credit report during this period.
3. Will checking my credit score lower it?
No, checking your own credit score is considered a soft inquiry and does not affect your credit score. Regularly monitoring your credit can help you stay informed about your financial health and catch any errors or fraudulent activity early. It’s a good practice to check your credit reports from each of the three major credit bureaus annually.
4. What is the most important factor affecting my credit score?
Payment history is the most significant factor affecting your credit score. Making all your payments on time is crucial for maintaining and improving your credit score. Other important factors include credit utilization, length of credit history, types of credit accounts, and recent credit inquiries.
5. Can debt relief programs help improve my credit score?
Debt relief programs can help you manage and reduce your debt, which can positively impact your credit score over time. Successfully completing a debt relief program and paying off debts can lead to an improved credit profile.
6. Are there specific credit cards available for a 639 credit score?
Yes, there are credit cards specifically designed for individuals with a “Fair” credit score. These credit cards may offer lower credit limits and higher interest rates, but they can be useful for rebuilding your credit. Some options include secured credit cards, which require a security deposit, and certain unsecured cards tailored for credit building.
7. What steps should I take if I find errors on my credit report?
If you find errors on your credit report, you should immediately dispute them with the credit bureau that issued the report. You can do this online, by mail, or by phone. Provide documentation to support your claim, and the credit bureau will investigate the issue. Correcting errors can quickly improve your credit score if the inaccuracies are significant.
8. How does high credit utilization affect my credit score?
High credit utilization, which means using a large percentage of your available credit, can negatively impact your credit score. It’s generally recommended to keep your credit utilization ratio below 30%. Reducing your balances and increasing your credit limits (without increasing debt) can help improve this ratio and, consequently, your credit score.
9. How do personal loans impact my credit score?
Taking out a personal loan can impact your credit score in several ways. Initially, there may be a slight dip due to the hard inquiry when you apply. However, if you make timely payments, it can positively affect your payment history and contribute to a better credit mix. Conversely, missed payments or defaulting on the loan can significantly harm your credit score.
Final Thoughts: Empower Your Financial Future
We understand that navigating a credit score of 639 and managing debt can feel challenging and stressful. It’s normal to have questions and worries about loan approvals, high interest rates, and how your financial habits might be affecting your future. The good news is that every step you take—whether it’s paying bills on time, reducing your balances, or disputing errors—brings you closer to a healthier financial profile.
Remember, improving your credit and managing debt is a journey, and you don’t have to go it alone. With small, consistent efforts and the right guidance, you can build a stronger credit history and access better financial opportunities. If you’re feeling weighed down by debt or need help mapping out the next steps, our team is here to support you every step of the way.
Take the first step toward relief and financial freedom—schedule a free consultation with us today and let’s explore the best debt relief solutions tailored to your unique needs.
