Is 637 a Good Credit Score? Here’s the Straight Dope

A credit score of 637 lands squarely in the “fair” credit score range. While it’s not a terrible score, it’s definitely not considered “good.” Think of it as being in the middle of the pack. You might qualify for some loans and credit cards, but you’ll likely face higher interest rates and less favorable terms than someone with a “good” or “excellent” credit score.

Decoding the Credit Score Landscape

Understanding where your 637 falls within the broader credit score spectrum is crucial. The most commonly used credit scoring model is FICO, which ranges from 300 to 850. Here’s a breakdown:

• Exceptional (800-850): The gold standard. Unlock the best interest rates and loan terms.
• Very Good (740-799): Excellent credit. Still very competitive rates and terms.
• Good (670-739): Above average. You’ll qualify for most loans and credit cards.
• Fair (580-669): Average credit, where your 637 resides. Higher interest rates are likely.
• Poor (300-579): Significant challenges in obtaining credit.

A 637 score indicates that you’ve likely had some credit missteps in the past, such as late payments or high credit utilization. It’s a signal to lenders that you pose a moderate risk.

The Implications of a “Fair” Credit Score

Having a “fair” credit score isn’t the end of the world, but it does come with its own set of consequences:

• Higher Interest Rates: This is perhaps the most significant impact. Whether you’re applying for a car loan, mortgage, or credit card, you’ll pay more in interest over the life of the loan.
• Lower Credit Limits: Credit card issuers are less likely to offer high credit limits to individuals with fair credit.
• Difficulty Renting an Apartment: Landlords often check credit scores as part of the application process. A “fair” score might require a larger security deposit or even a co-signer.
• Higher Insurance Premiums: In some states, insurance companies use credit scores to determine premiums. A lower score can translate to higher car insurance costs.
• Limited Loan Options: Some lenders may be hesitant to approve loans for individuals with fair credit, especially for larger amounts.
• Less Favorable Loan Terms: Even if you are approved, you might face stricter repayment terms, such as shorter loan durations or higher fees.

How to Improve Your Credit Score from 637

The good news is that a 637 is far from unfixable. With a focused effort, you can improve your credit score significantly. Here are some actionable steps:

• Pay Your Bills on Time, Every Time: This is the single most impactful action you can take. Late payments have a major negative impact on your credit score. Set reminders, automate payments, do whatever it takes to avoid missing deadlines.
• Reduce Your Credit Utilization: Credit utilization is the amount of credit you’re using compared to your total available credit. Aim to keep it below 30%, and ideally below 10%. This shows lenders you’re not overly reliant on credit.
• Check Your Credit Report for Errors: Obtain free copies of your credit reports from Experian, Equifax, and TransUnion at AnnualCreditReport.com. Dispute any inaccuracies you find.
• Become an Authorized User: If you have a friend or family member with excellent credit, ask if you can become an authorized user on their credit card. Their positive credit history can help boost your score. (Just make sure they pay their bills on time!).
• Consider a Secured Credit Card: If you’re having trouble getting approved for a traditional credit card, a secured credit card can be a good option. You’ll need to put down a security deposit, but it can help you build or rebuild credit.
• Be Patient: Credit improvement takes time and consistent effort. Don’t expect to see results overnight. Stay focused on your goals, and you’ll eventually see your score rise.

FAQs: Decoding the Mysteries of a 637 Credit Score

1. How long will it take to improve my credit score from 637?

The timeframe varies depending on the factors dragging down your score. Consistent on-time payments and reduced credit utilization can show improvements within a few months. Addressing errors on your credit report can have an immediate impact. More significant improvements take longer, often several months to a year.

2. Will checking my own credit score hurt my score?

No. Checking your own credit score is considered a “soft inquiry” and does not impact your credit score. Only “hard inquiries,” which occur when you apply for credit, can potentially lower your score slightly.

3. What’s the difference between a FICO score and a VantageScore?

Both are credit scoring models, but they use different algorithms and may weigh factors differently. FICO is the more widely used model by lenders. VantageScore is another legitimate model. Your scores may vary between the two.

4. Is it possible to get a mortgage with a 637 credit score?

Yes, but it will likely be more challenging and expensive. You’ll need a larger down payment and be prepared for higher interest rates. Exploring FHA loans might be a good option, as they have more flexible credit score requirements.

5. Can I get a car loan with a 637 credit score?

Yes, but again, expect higher interest rates. Shop around for the best rates and terms. Consider making a larger down payment to lower your monthly payments.

6. What is a good credit utilization ratio?

Aim to keep your credit utilization below 30%, and ideally below 10%. For example, if you have a credit card with a $1,000 limit, try to keep your balance below $300 (or even better, below $100).

7. How many credit cards should I have?

There’s no magic number. Focus on responsible credit management. Having one or two well-managed credit cards is better than having several cards that you struggle to keep up with.

8. What if I have no credit history at all?

Start by applying for a secured credit card or a credit-builder loan. Becoming an authorized user on someone else’s credit card can also help establish credit.

9. Will closing a credit card improve my credit score?

It depends. Closing a credit card can lower your overall available credit, potentially increasing your credit utilization ratio and negatively impacting your score. However, if you’re struggling to manage multiple cards, closing one might be beneficial in the long run.

10. What is a credit mix, and does it matter?

Credit mix refers to the variety of credit accounts you have, such as credit cards, installment loans (like car loans or mortgages), and lines of credit. Having a diverse credit mix can positively impact your score, but it’s not as important as payment history and credit utilization.

11. Are credit repair companies legitimate?

Some credit repair companies can be helpful, but be wary of those that make unrealistic promises or charge exorbitant fees. You can often achieve the same results yourself by disputing errors on your credit report and practicing good credit habits. Be extremely careful of credit repair scams.

12. How often should I check my credit report?

You are entitled to a free credit report from each of the three major credit bureaus (Experian, Equifax, and TransUnion) every 12 months. Take advantage of this and check your reports regularly for errors and signs of identity theft. Many credit card companies and financial institutions also offer free credit score monitoring services.