After college and taking out loans and getting in a little credit card trouble, I graduated and found out my credit score was 660 and sucked. I did a little research about this.
A 660 credit score is mostly based on the past two years. While FICO score is figured on 7 years of information, anything older than two years makes up 30% of the score.
This is why it is vital to keep several lines of open and good credit on all reports. It wouldn’t be considered good credit if you just pay off collections, medical bills, cell phone bills, utility bills and rent. A better option is to have several open credit lines, including car loans, personal loans and credit cards that report to every credit bureau.
Room for improvement
Credit scores from 300 to 499 are considered very bad. Scores from 500 to 570 are considered poor. Scores from 580 to 619 are still considered low, though.
If your score is between 620 and 679, then you are right in the middle of the spectrum. This means that a 660 credit score isn’t actually good or bad; it is just average. There’s nothing wrong with average. You do have room to improve, though.
If your score is from 680 to 699, it is considered good. And, if your score is from 700 to 850, then it is absolutely excellent.
How Credit Scores are Calculated
Credit score calculations are based on five factors:
- Payment history
- Balances carried
- Credit history
- Types of accounts you have
- Credit inquiries
Timeliness is important. Pay off your home loans, car loans, bills and credit cards in a timely manner and you will be rewarded. Find a way to get 500 dollars now or more and pay on time. Timeliness makes up 35 percent of your score.
Is also includes late payments, delinquencies and bankruptcies into account. Make a late payment, have a judgement or collection against you and your score could dip by 15 to 40 points.
Your current credit accounts for 30 percent of your score. This includes current debt on loans and credit cards. Even if you don’t make any late payments, your credit score could decrease if you show more than 80% of debt against a high credit limit.
Duration of creditworthiness is important, which makes about 15 percent of your score. This will depend on how long you have had your loans and credit cards and how much you use them.
Banks will typically look for three accounts that have been active for at a year. If your account has been inactive, then it won’t play a role in your credit at all.
The types of credit that you have take up 10% of your score, too. This includes credit cards, installment loans, car loans and mortgages.
If you have a lot of open credit cards and small finance company loans, then your credit score could fall by as much as 40 points.
Any new credit acquisition will take up the rest of the 10% of your score. So, if you keep opening new credit accounts within a small amount of time, your credit score could dip in no time at all.
Can I get a car loan with a 660 credit score?
While 660 isn’t really considered to be a bad credit score, you might have trouble getting a good interest rate on a car loan with it.
Generally speaking, car loans with the best rates are only given out to people with credit scores that range from 720 to 850.
If you are able to make a big down payment and if you currently have a good job, then your chances of getting a car loan will be much higher. You do have to keep in mind that your interest rate will be much higher, as well.
An important point: Make sure your lender reports to all of the credit bureaus.
You should have a decent gross income and your debt to income ratio hasn’t reached more than 45% when applying. Ideally, it should stand under 30%.
If your bureau-reported debt is at around 45% or more, showing your credit report as proof of your ability to make the monthly payments will do nothing but ensure that your loan doesn’t get approved, even if you have a 660 credit score or more.
If you want to get a car loan, though, the ideal credit score for you to have would definitely be 720. This would be especially important if you want to keep your interest rates low.
Improve your score
If you want to get a better credit score in order to improve your chances of getting loans, make sure you pay all of your bills on time. This includes cell phone bills, medical bills, satellite contracts and cable bills. If you don’t, then your credit score will go down.
Ideally, you should have three to six active accounts, as well. Keep in mind that your credit score mostly consists of the past two years.
Having several good and active credit accounts would be vital. Naturally, it goes without saying that your credit card balances should be kept on the down low. If you pay down balances right away, your credit score will go up.
You should avoid closing down any credit cards, especially if you have had the cards for a long time. You should also avoid getting new ones for now and avoid getting loans while you’re at it.
I hope this information about a 660 credit score has been helpful.