Key insights:
- What’s considered a fair credit score depends on the credit scoring model
- Your credit score has a significant impact on the credit cards and interest rates you may be eligible for, so it's valuable to know where it stands
- You can see if you pre-qualify for Citi credit cards without getting a hard check on your credit report
A credit score is a 3-digit number that aims to predict the likelihood that you'll pay back debt. It’s based on factors that make up your creditworthiness, such as credit history, credit mix or credit utilization. A fair credit score is in the range above poor but below good. Lenders may view someone with a fair credit score as less likely to pay back borrowed money than someone with good or excellent credit. There are many credit cards for fair credit scores, but you may have fewer choices and higher interest rates.
Let’s look at how a fair credit score may affect your financial decisions and what steps you can take to improve your score.
What is a fair credit score?
What’s considered a fair credit score will depend on the credit scoring model. Credit rating companies calculate credit scores by using credit report data that weigh various creditworthiness factors such as the average age of accounts, outstanding debts and payment history.
Specific score models may weigh some factors more or less than others. For example, one credit scoring model may weigh payment history and credit utilization more than the average age of accounts and credit mix.
Because different scoring models may have different ranges for what’s considered a fair score, it’s always important to know what credit scoring model an issuer uses when you apply for a credit card or loan. You can find the score ranges on the credit scoring model’s website.
Why you might have a fair credit score
Although scoring models may rate you a fair credit score based on different factors, these models will typically use criteria such as:
- Payment history: How consistently you make on-time debt payments
- Credit utilization: The percentage of your total available credit you’re using
- Credit mix: The diversity of credit accounts you have open
- Credit history: The length of time your credit accounts have been open
If you find out you have a fair credit score, it can help to examine these factors and consider how they might be affecting your current credit score.
What’s the difference between a fair credit score vs. good credit score?
Both fair and good credit scores attempt to assess how risky you are as a borrower. A good credit score indicates you may be more likely to pay back debt than a borrower with a fair credit score.
Someone with a fair credit score may have a harder time finding their ideal interest rates or credit limits when applying for credit cards than someone with a good credit score. They may also be less likely to get approved for financial products like personal loans, credit cards or mortgages.
Are there credit cards for fair credit?
You can still qualify for a credit card if you have a fair credit score. However, you may have fewer options to choose from and receive offers with higher interest rates.
Before you apply for a credit card and get a hard credit check that could temporarily lower your credit score, consider seeing if you pre-qualify for any cards. You can check for pre-qualified offers on Citi credit cards to see the cards and terms you’re most likely to qualify for without any impact on your credit.
How do you improve your credit score?
Improving from a fair to a good credit score requires patience and proper strategy. It’s possible to improve your credit score over time if you take action.
Pay down your outstanding credit card balances
Paying off your existing credit card balances can help improve your credit score. Check the balances on your credit cards, figure out what you owe overall and come up with a plan to pay these debts off.
When you pay down your credit cards, you will lower the amount of available credit you’re using, which improves your credit utilization ratio, a factor in determining credit score.
Use a credit card to build credit
You can build credit over time by using your credit card responsibly.
Responsible credit card usage involves making all your minimum credit card payments by the due date and keeping your balances low (a good rule is to keep your credit utilization below 30%). These actions can keep your credit utilization low and continue to build your repayment history, which can help you continue to improve your credit score.
Consider using a secured credit card
A secured credit card requires a security deposit that typically serves as your credit limit. If you can’t make payments, the card issuer can use your deposit to cover the outstanding balance. Secured credit cards can help people who might not qualify for unsecured credit cards to demonstrate responsible credit card usage and build their credit history.
Don’t apply for too much new credit at once
Applying for a new credit card or loan can trigger a hard inquiry on your credit report, which can lower your credit score. While hard inquiries don’t hurt your score too much, they can add up over time if you’re frequently applying for new credit cards and loans. Many hard inquiries at once can also signal to lenders that you’re trying to take on more new debt than you can manage.
