Is 670 a Good Credit Score?
A credit score of 670 is at the very lowest edge of the “good” category. So is a 670 credit score good? Technically, yes, and you should be able to qualify for most types of loans.
But is 670 a good credit score in terms of getting the best rates and lowest fees? Not usually. You’ll need to work on building your credit score to earn lower interest rates and fees, higher borrowing amounts, and more flexible terms.
Below, you’ll learn the full story on what a 670 credit score means and what types of loans you can get with this score.
Below, you’ll learn what it means to have a credit score of 670, including what kinds of loans you’ll qualify for and what rates you can expect.
What Does a 670 Credit Score Mean?
Think of your credit score as a grade. Credit scoring companies like FICO® and VantageScore review your credit report (you have one with each of the three major credit bureaus) and assign a number to you based on how reliable you are when borrowing money. On-time payments, a healthy credit mix, and low credit utilization are some of the factors that affect your credit score.
The most popular credit scoring model in the U.S. is FICO, which has five credit score ranges:
Exceptional: 800 to 850
Very Good: 740 to 799
Good: 670 to 739
Fair: 580 to 669
Poor: 300 to 579
A 670 FICO score is officially in the “good” range — but just barely. To get the most out of a “good” credit score (like low interest rates and low fees), you should aim to build your score into the 700s or beyond.
What Can You Get with a 670 Credit Score?
A 670 credit score is at the absolute bottom of the “good” range in the FICO credit scoring model. While the score indicates that you should qualify with lenders advertising loans for borrowers with good credit, your status right on the edge might throw your application into question.
Even if you do qualify for loans, you likely won’t enjoy as low of interest rates and fees as you might if you were on the higher end of the “good” range or had a score in the “very good” or “exceptional” range.
But don’t let that discourage you. With the right lenders, you should still be able to qualify for all major types of loans. Keep reading to learn more.
Can I Get a Credit Card with a 670 Credit Score?
The minimum credit score to get a credit card is 300, which is the absolute lowest score you can have. In fact, some credit card issuers will give you a credit card even if you haven’t established any credit history at all.
The caveat? You’ll likely only qualify for a secured credit card (that means making a cash security deposit as collateral on the card), and interest rates will be high. However, using this card responsibly means that, over time, you can expect to build your credit history and score.
With a 670 credit score, you’ll probably qualify for a wider range of credit cards, including unsecured credit cards (no security deposits required!). However, a 670 score is typically not good enough to get rewards credit cards that offer cash back or travel points. You may also still have a low credit limit and high interest rate until you build your score.
Can I Get a Personal Loan with a 670 Credit Score?
Along the same lines as credit cards, there’s no official minimum credit score to get a personal loan. Instead, each lender sets its own requirements, and many lenders — especially those found online via lending marketplaces — are available to those with poor credit. Again, these might be secured loans and have steep interest rates, which can go as high as 36%.
With a 670 credit score, however, you don’t likely have to worry about a security deposit and interest rates that steep. Lenders that are willing to work with good credit will still likely have high interest rates and origination fees, but there may be some more flexibility with how much you can borrow and how long you have to pay it back.
Credit scores are only one factor lenders consider when approving you for personal loans, however. They typically also consider your income streams and outstanding debts before approving you. If you’re hoping to consolidate multiple outstanding debts with the personal loan, make this known to the lender. Getting a credit card consolidation loan can be a way to combat competing payment due dates and high interest rates and pay off your debt.
Can I Get a Mortgage with a 670 Credit Score?
You can get a mortgage with a 670 credit score, as long as you meet other qualification requirements. In fact, the minimum credit score needed to buy a house with a conventional mortgage is 50 points lower: 620.
And even those prospective homebuyers with scores below 620 have options through government-backed loans, such as FHA loans, VA loans, and USDA loans.
Buying a home with a 670 credit score is popular. According to Experian, 27% of people with a 670 credit score have a mortgage loan in their credit portfolio. Just remember that credit score is only one facet of the loan approval process; lenders will also want to see steady income, a low debt-to-income ratio, and enough funds to cover your down payment. At the very least, you’ll need 3% in cash for a down payment when purchasing a home through a conventional mortgage.
Can I Get an Auto Loan with a 670 Credit Score?
You can also get a car loan with a 670 credit score. However, auto lenders typically use a specialized auto credit scoring model, either the FICO Auto Score or VantageScore 3.0 or 4.0, instead of the traditional scoring model. The FICO Auto Score runs from 250 to 900.
Technically, there’s no minimum credit score to buy a car. Even borrowers with subprime credit can usually find some kind of loan, though the amount they can borrow might be low, and the rate will certainly be high — and falling behind on payments means the car could be repossessed.
Borrowers with a 670 credit score are in a much better place when it comes to financing a car. While you won’t get the lowest rates and fees available, you should be able to drive away from the dealership in a new set of wheels without much hassle. In fact, 44% of borrowers with a 670 credit score have an auto loan, according to Experian.
Leasing a car with a 670 credit score can be more challenging. While car dealerships will lease cars to drivers with a lower credit score, 680 is the preferred threshold.
The Takeaway
A 670 credit score is considered a good credit score on the FICO scoring model — but only just barely. It’s on the cusp of “fair” and “good.” You’ll be able to qualify for credit cards, personal loans, mortgages, and auto loans, but 670 is not good enough to get the industry’s best rates and lowest fees. It may be wise to keep working to build your credit score, and consider applying for a loan once you’ve made it to the “very good” level (740 to 799), if possible.
This article originally appeared on SoFi.com and was syndicated by MediaFeed.org.
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The #1 Thing That Could Hurt Your Credit Score
As of 2022, the average American has a credit score of 714. But how was that number arrived at, and, more importantly, how is your own credit score determined?
There are five primary credit score factors, each with its own level of significance. According to the Fair Isaac Corporation, which issues FICO® scores (one of the most commonly used personal credit scores), the breakdown for the FICO score is as follows:
- Payment history
- Debt amounts owed
- Length of credit history
- New credit/recent inquiries
- Credit mix
Here’s an explanation of each one, starting with those that have the largest impact.
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Your credit score is most affected by how consistently you pay your bills on time. However, not every bill you pay is tracked by the three major credit bureaus (Equifax®, Experian®, and TransUnion®). Instead, credit lines are what are primarily listed on your report and included in calculating your score. These typically include your credit cards, loans, and any lines of credit you might have.
Don’t be concerned that you'll see a negative entry just because you were a day late on your credit card payment. Creditors don’t report a late payment until it’s at least 30 days overdue (although you may still accrue late fees before then).
If you still don’t make a payment after that period, the creditor can report additional missed payments at the 60, 90, 120, and 150 day marks until you either make the payment or the account is considered a charge-off (meaning that the creditor considers the bill unlikely to be paid).
(Learn more atPersonal Loan Calculator)
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Another factor that can affect your credit score is your total amount of debt, including the amount you owe across all of your accounts and how many of your accounts have balances. You may appear to be financially overextended if you have multiple credit lines with outstanding charges.
Keep in mind that each account is considered individually. Carrying a large balance compared to your available credit line can lower your score. This applies to both credit cards and installment loans. The more you pay down your credit cards and loan balances, the better your score is likely to be.
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Another factor that can affect your credit score is the length of your credit history. The longer you’ve had an account open, the more of a track record you have to demonstrate your creditworthiness. The age of your oldest and newest accounts are evaluated, as is the overall average age of all your accounts.
However, closing a credit card account won’t hurt your score because of the length factor. That data stays on your credit report for 10 years after the account is closed and is still included as part of your account average until it drops off. Your score could drop, though, when you initially close a credit account because your overall available credit will be lower.
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Your credit score also takes into account how much new credit and new inquiries from creditors you are accumulating. Opening too many new credit accounts in a short period of time may suggest that you’re facing financial hardships. Whenever a creditor performs a hard pull on your credit report, you could see a small dip in your credit score. Each inquiry stays on your report for two years, but only affects your score for the first year.
Different types of inquiries vary in their impact on your score. Multiple credit card applications hurt your score more because lenders associate them with greater risk. But multiple inquiries in a short period of time for things like a mortgage or auto loan are typically viewed as rate shopping and won’t dramatically affect your score. You can try to maintain a good credit score by strategically applying for new credit and paying attention to the timing of your applications.
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Your credit mix consists of all the different types of debt you have, though they’re not all weighted equally when your credit score is calculated.
It’s typically best to have a mix of revolving credit and installment loans. Revolving credit is more flexible and includes things like credit cards, a home equity line of credit, and store credit cards. An installment account has a fixed monthly payment, such as a mortgage, auto loan, or student loan.
This category doesn’t weigh as heavily as your payment history and amounts owed, but having experience with a diverse range of credit types can help build your score.
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Some of these credit score factors weigh more heavily than others. Late payments can cause a major drop, especially if you end up defaulting on your loans or credit cards.
These entries stay on your credit report for seven years. Even though the effect on your score lessens over time, lenders can still see that negative history, making it important for you to stay on top of your monthly payments.
If you’re unsure of how to improve a bad credit score, consider credit score monitoring. Not only can you get an idea of where your current score stands, but you can also receive actionable tips about how to build your score based on your own history.
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The best thing you can do for your credit score is to pay your bills on time. This accounts for 35 percent of your credit score, making it the biggest contributing factor. Also try to keep your credit card and loan balances as low as possible, since maxing out your accounts also has a major impact.
Another tip is to diversify your credit mix. Installment loans like student loans and mortgages, for instance, are counted more favorably than credit card debt. While you shouldn’t take out a loan just for the sake of your credit score, consider the impact when weighing multiple financing options or investigating a personal loan.
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If you’re a business owner, the importance of your credit score doesn’t just affect your personal life, but your business one, as well. Your individual credit score is often used in conjunction with your business credit score when you’re applying for financing. It can be especially important when your business is new and doesn’t have a substantial credit history.
Startup business loans with bad credit and no collateral usually include things like credit cards, invoice factoring, and merchant cash advances. Oftentimes, you’ll encounter high fees and interest rates, but you may qualify for better terms if you have a good personal credit score.
An unsecured business line of credit for startups is another option to consider for financing a new venture. Each lender has its own eligibility requirements, which could include a minimum time in business and specific revenue qualifications. Since it’s hard for many new businesses to meet those requirements, having a good personal credit score lets you pursue other ways to launch your startup, like a personal loan or credit card.
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Understanding what influences your credit score is a good way to start taking control of your finances. Get empowered to make the right decisions about how to manage your money, like prioritizing credit payments and keeping your balances low.
This article originally appeared on SoFi.com and was syndicated by MediaFeed.org.
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