What is a fair credit score? If you have fair credit, you might be wondering whether that’s a bad thing. The good news is that having fair credit is much better than having poor credit, in terms of the financial opportunities available to you — but if you work on building your credit score until you have good or excellent credit, you’ll gain access to better credit cards, lower interest rates and more.
What is fair credit? Is fair credit the same thing as average credit? What credit cards are available to people with fair credit, and how can you use those credit cards to improve your credit score? Let’s take a close look at what fair credit is, how it might affect your financial life and what you can do to go from fair credit to good credit.
Is a fair credit score average?
A fair credit score is sometimes referred to as “having average credit.” However, this only means that people with fair credit, which includes anyone with a FICO score between 580 and 669, fall in the middle of the credit score ranges. It does not mean that the average American has a fair credit score.
Currently, FICO credit scores start at 300 points and run all the way to 850 points. In 2018, the average FICO credit score was 704 points — which means that in 2018, the average American had good credit, not fair credit.
If you have fair credit, your credit score is neither good nor bad. It’s somewhere in between, which is why a fair credit score is often described as “average.”
What is the range of credit scores?
Every FICO credit score falls within one of five ranges: Excellent (sometimes called “Exceptional”), Very Good, Good, Fair and Poor. If you have a fair credit score, your credit score ranges between 580 and 669 points. You don’t have bad credit, but you don’t have great credit either.
Here’s how the FICO credit scoring system ranks credit scores:
Very Good: 740-799
Fair vs. good credit
Fair credit and good credit are next to each other on the credit score scale, but your financial opportunities get significantly better once you pass the threshold of a 670 score. Credit cards for people with good credit offer higher rewards, whether you’re hoping to earn points and perks on travel, dining or everyday spending. You’ll probably pay lower interest rates on your credit cards, too — and if you’re applying for a car loan, a personal loan or a mortgage, you’ll likely have more options and better interest rates if you have good credit.
People with fair credit are already better off financially than those with poor credit, but you shouldn’t stop there. If you have a fair credit score, one of the best things you can do for yourself is get that number into the good credit score range as quickly as possible.
What cards can I apply for with fair credit?
While many of the top rewards credit cards are only available to people with good or excellent credit, there are still many worthwhile credit cards for people with fair credit.
The Capital One QuicksilverOne Cash Rewards Credit Card, for example, is a cash back credit card that offers unlimited 1.5 percent cash back on all purchases. This card comes with a $39 annual fee, but it includes two key benefits: You can use Capital One’s CreditWise® tool to monitor and improve your credit score, and with responsible use you’ll be automatically considered for a higher credit line after six months of card ownership.
You might also want to consider the Discover it® Secured credit card, a cash back rewards card that is specifically designed to help you build your credit history and boost your credit score. When you apply for a secured credit card, you put down a refundable security deposit in exchange for a line of credit. With the Discover it Secured card, your account will be reviewed after eight months to determine whether you qualify to get your security deposit back.
As you use your Discover it Secured card, you’ll earn 2 percent cash back at gas stations and restaurants on up to $1,000 in combined purchases each quarter and 1 percent cash back on all other purchases. Plus, you’ll get to reap the benefits of Discover’s Cashback Match program, which matches all the cash you earn in your first year as a cardholder. You can also view your free credit scorecard with your FICO Credit Score when you log into your Discover account or use the mobile app — so you can check your score regularly and watch it improve.
Want to see if you pre-qualify without affecting your credit score? Check out our CardMatch feature and get matched with a card that best fits your needs.
How to improve fair credit
A fair credit score means you don’t have poor credit — but it also means you have a lot of room for improvement. If you want to improve your credit score, here’s our advice:
Make all of your credit card payments on time. The largest factor impacting your credit score is your payment history, accounting for 35 percent, so avoid late payments whenever possible. If you accidentally miss a payment, try to pay it off before it becomes 30 days past due. You’ll avoid late fees and penalty APRs, and your late payment won’t be reported to the three credit bureaus.
Keep your balances as low as possible. Your credit score is also largely based on your credit utilization — the amount of credit you’re using compared to the amount of credit available to you — as this makes up 30 percent of your score. By keeping your balances low or paying them off in full, you’ll decrease your credit utilization ratio and increase your credit score.
Increase your available credit. Believe it or not, you can boost your credit score by requesting a credit limit increase or applying for a new credit card. If you have more credit available to you — and if you can avoid turning that new credit into new debt — your credit utilization ratio will go down and your credit score should go up.
Check your credit reports for errors. According to a 2013 Federal Trade Commission study, 5 percent of Americans had errors on at least one of their three credit reports — and inaccurate information could be dragging your credit score down. Check your Experian, Equifax and TransUnion credit reports regularly and dispute any errors you find.
As you continue to use credit responsibly — by making on-time payments every month and paying off your balances as quickly as possible — you should see your credit score improve over time. In fact, depending on where you are in your credit-building journey, you could see significant improvement in just a few months. Improving your credit will give you access to better credit cards and lower interest rates, and your credit options will only continue to expand as your credit score continues to grow.