What Is a Fair Credit Score?

In the eyes of lenders, your creditworthiness is measured by your credit score. Lenders use this three-digit score to determine how likely you are to repay your debts, and therefore, how risky a borrower you are.

Those with higher credit scores reap the rewards, like a low or zero-percent interest rate, higher credit limits and lower monthly payments. But what about borrowers whose scores are less-than-perfect? In this guide, we’ll explore what it means to have a fair credit score, how your score can impact you and what you can do to raise it.

What is a fair credit score?

FICO Scores range from 300 to 850.  This score is a representation of your credit habits and is used to assess your financial health. A credit score that falls in the fair range (580-669) could use some improvement. In fact, it’s considered a subprime score, which means that it is lower than what’s desired by most financial institutions. Here’s a breakdown of FICO Scores:

Credit rating Credit score range
Exceptional 800-850
Very good 740-799
Good 670-739
Fair 580-669
Poor 579-300


If you’re in this range, you’ve likely made some financial mistakes along the way. But does it mean you’ll be unable to purchase a home or a car or struggle to rent an apartment? Do you get to reap any rewards? Well, the answer is: It depends.

How can a subprime credit score hurt you?

Your credit score can affect many aspects of your life. With a lower credit score, you’ll struggle to qualify for credit opportunities or you’ll receive higher interest rates and lower loan amounts.  Many mortgages, credit cards and personal loans require a minimum score of 660, so depending on your score and the financial product you’re shopping for, you may still be in luck.

Here’s how having a subprime credit score can hurt you:

    • High interest rates: Because of the perceived risk of lending to a borrower with a subprime score, lenders offer higher interest rates in an effort to recoup potential losses from non-payment. A study from September 2022 revealed that raising your credit score from fair to very good could save you nearly $50,000 in interest charges and fees over the lifetime of your loans.
    • Credit cards: Although you may be able to qualify for some credit cards, they might not be among the best cards you could get. The cards with the best benefits — cash back, airline miles or perks for everyday spending — typically require a credit score in the 700 range. There are credit cards designed for consumers with bad credit, but they come with higher interest rates, lower credit limits and some require security deposits.
    • Less attractive loan terms: If you’re able to qualify for credit opportunities with a subprime score, you’re likely to be offered shorter repayment terms, lower borrowing limits and additional fees. This all translates to higher monthly payments and a higher total cost of borrowing.
    • Employment: If you’re applying for a job that requires handling money, a subprime credit score could stand in the way of a job offer. Many employers require applicants to submit to a full background check, which can include accessing your credit report. A subprime score may signal to the employer that you don’t make responsible financial decisions.
    • Insurance: A fair credit score can result in higher insurance rates because it may indicate to insurers that you’re more likely to file an insurance claim or behave irresponsibly.

How is your credit score determined?

Understanding your credit score is simple — just like in school, the higher your score, the better. Your score shows lenders whether you can repay your loans on time and whether you’re already carrying too much debt compared with your income.

Your credit score is based on information found in your credit report. You can use AnnualCreditReport.com to receive a free credit report from each of the three major credit bureaus: Equifax, Experian and TransUnion.

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

  • Payment history: 35%
  • Amounts owed: 30%
  • Length of credit history: 15%
  • New credit accounts: 10%
  • Credit mix: 10%

A subprime credit score is a product of negative information, including late payments, maxed-out credit accounts, loan defaults, accounts sent to collections, repossessions, foreclosures or bankruptcies. A single late payment or too many hard credit inquiries won’t be enough to tank your score. If you have a subprime credit score, your credit report is likely to reveal a history of credit missteps.

But all hope is not lost — even the lowest credit score can rebound with diligent effort.

How can you improve your score?

So how can you improve your credit score? There are several steps you can take to get started:


Resolve to make a change in the way you think about money. The most impactful thing you can do is to make every payment on time since your payment history is the largest factor weighed when determining your score. Sign up for auto-pay, set recurring reminders on your phone or download a budgeting app to help yourself stay on top of your payments.


Negative information, like a late payment or an account in collections, has a statute of limitations for how long they can legally be included on a credit report — typically seven years. Once the clock runs out, credit reporting agencies are no longer allowed to report that information. When a negative item falls off your report, your credit score may see a boost.


Unfortunately, it is common for errors to appear on your credit report. Maybe your credit report shows information for someone else with a similar name or maybe you closed a credit card account that is still showing as open. If you identify an error on your report, you can and should dispute the inaccurate information.

Under the Fair Credit Reporting Act, you have the right to challenge inaccurate information with the credit reporting agencies or the relevant lender. They are required to investigate your claim, and if they agree that the disputed information is inaccurate, they must either correct it or remove it.


Carrying too much debt could be weighing down your credit score. For example, your credit report might include a few student loans, several maxed-out credit cards and a long-term car loan. If you are carrying too much debt, reducing it can actually push your credit score up a bit because your credit utilization ratio will improve.

To resolve your debt, you may consider a personal loan to consolidate debt at a lower rate than you have on your current accounts.

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