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What Is a Fair Credit Score?

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As adult consumers, you are measured by your FICO credit score, a type of score created by the Fair Isaac Corporation that lenders use to determine how much of a credit risk you are. If you want to buy a home or a car or rent an apartment, the lender, leasing company or landlord will ask to see a copy of your credit report, which includes your credit score.

It’s common knowledge that those with higher credit scores reap the rewards. Higher scores can provide consumers with perks like a low or zero-percent interest rate, higher credit limits and lower monthly payments.

But where does a “fair” credit score fall? Here’s a ranking of FICO Scores:

Ranking of FICO Scores
Credit rating Credit score range
Exceptional 800-850
Very good 740-799
Good 670-739
Fair 580-669
Very poor 300-579


A credit score that falls in the fair range (580 – 669) could use improvement. In fact, it’s considered a subprime score, which means it is lower than what is desired by financial institutions.

But if you’re in this range, does it mean you’re left out of purchasing a home or a car or the ability to rent an apartment? Do you get to reap any rewards? Well, the answer is it depends.

How a subprime credit score hurts you

“Your credit score impacts every aspect of your life,” said Anthony Davenport, president and CEO of Regal Credit Management in New York. “Even home and auto insurance rates are now looking at your FICO score to determine your premium amount and prospective employers are looking at credit.”

Understanding your credit score is simple — just like in school, the higher your score the better. Depending on how high or low your score is, it shows the lender whether or not you can pay your loans and pay them on time, and if you aren’t carrying too much debt compared with your income.

Davenport explained that a 660-699 credit score is the bare minimum to qualify for a mortgage or any credit card. Remember that the fair FICO credit score range tops out at 669. So you may still be in luck, depending on your score and what financial products you shop for.

However, you may have trouble in other areas.

You might not qualify for certain credit cards

Although you may be able to qualify for some credit cards, they might not be among the best cards you could get.

“Credit cards where you earn points, rewards, and bigger benefits are going to require FICO scores in the 700 range,” Davenport said. These types of credit cards could score you cash back, airline miles or other perks for everyday spending. However, if you have a habit of carrying a credit card balance from one month to the next, these perks would likely not be worth the interest you’d pay over time.

Your loan terms may be worse

Not only may you face hurdles snagging the best credit cards, you could face harsh loan terms.

“For example, the best published interest rates for auto loans are for people who have 720 and above,” said credit expert John Ulzheimer. “The best interest rates for mortgage loans are for people who have 760 and above. Lower credit scores always comes with more punitive terms, larger down payment requirements and much higher interest rates.”

Translating a lower credit score into dollars and cents can be quite startling.

Davenport explains that by age 40, the average American with an average credit score will have paid $40,000 more in interest than someone with a good credit score. “Throughout their lifetime, that same person will pay over $100,000 more in interest than a 760 score holder.”

What’s worse? “If you have a bad credit score of 620, you’ll owe over half a million dollars in interest more than that same person with a good credit score. And that’s just in average-cost areas — in high-cost cities like New York or LA, you can anticipate even more interest,” he said.

However, there actually is one time when you should be proud of a fair credit score. “That’s if you once had a poor score and moved it up to a fair score, then yes, be proud, but otherwise no,” said Davenport. “You’re paying significantly more for everything.”

Why you have a subprime credit score

Your credit score is based on information found in your credit report. You can use to receive a free credit report from each of the three major credit bureaus: Equifax, Experian and TransUnion. You can also use LendingTree’s app to see your credit score for free.

Your credit score is determined by a number of factors. Here’s a simple breakdown:

How your FICO Score is determined
Factor Weight
Payment history 35%
Amount of credit owed 30%
Length of credit history 15%
Type of credit 10%
New credit 10%


Ulzheimer said a subprime credit score is a product of negative information. “This means anything that indicates a non-performing obligation, so late payments, defaults, collections, repossessions, foreclosures, anything that indicates that the consumer is not making their payments on time with the lender,” he said.

Ulzheimer explains that someone with a credit score in the 500 range has financially harmful items on their credit report. “No one has a score in the 500s because they applied for credit a few too many times,” he said. “You’re in the 500s because you are missing payments on any type of an obligation; credit card, student loan, mortgage, auto or personal loan.”

4 tips to improving your credit score

So if you want to improve your credit score, how can you do it? There are several steps you can take to get started:

1. Wait it out

“Negative information, like late payments, defaults, collection, repos and bankruptcies, have a statute of limitations with respect to how long they can legally be maintained on a credit report,” said Ulzheimer. “Once the clock runs out, then the credit reporting agencies are no longer allowed to report that information.”

2. Fix errors on your credit report

Maybe your credit report is filled with credit issues for someone else with a similar name. Or maybe you closed a credit card account that is still showing as open. Perhaps the report doesn’t list your current employer. Write to the credit bureaus with anything that is inaccurate, such as the wrong employer, wrong address, wrong phone number.

“You have considerable rights under the Fair Credit Reporting Act,” said Ulzheimer. “You can challenge the information directly with the credit reporting agencies or challenge the information directly with the furnishing party, which is usually either a lender or a collection agency. Once you have notified them that you’re disputing the accuracy of the information, they have to perform an investigation into your claim.”

Ulzheimer explains that if they agree that the information is being reported incorrectly, they have to either correct it or remove it.

3. Reduce your debt load

What could be weighing down your credit score is simply too much debt. Your credit report might include a few student loans, several credit cards that are maxed out and a long-term car loan. If you are carrying too much debt, reducing it can actually push your credit score up a bit.

“People are accumulating debt at levels we haven’t seen since before the recession,” said Davenport. “Many people are also carrying 11 credit cards.”

To resolve the debt, he suggests looking at peer-to-peer lenders to consolidate debt at lower rates than what you could get through a standard bank.

Davenport also suggests borrowing money from your 401(k) to reduce your debt in one shot. “It doesn’t impact your credit score and can be at a significantly lower rate that credit card interest,” he said. Carefully consider this option, however. Borrowing from your retirement fund can be a costly decision.

4. Improve your credit utilization ratio

According to, you can either lower the amount of credit that you have in use, or increase your credit limits to ensure that you don’t use more than 30% of your available credit at any given time.

Your credit report gives you a snapshot into how many, but not all, of the financial aspects of your life. It tells you how much debt you have, whether you’re paying off your bills on time and how much credit you can actually afford to handle.

If your credit score falls into the fair range, you have some work to do to improve it. You can also turn to a credit repair company to raise your credit score. Once you bump up that score to the next level, you will see that better interest rates and lending opportunities will be your reward. Keep at it and before you know it, you’ll be at the top of the credit score class!


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