656 Credit Score: Good or Bad?

Last Updated: Mar 22, 2023

  • A 656 credit score is considered "Fair"
  • Having a “Fair” credit score can cost you 1000s of dollars in extra interest over the lifetime of your loans
  • Call us today to find out how you can repair your credit (fast)!

Is 656 a good credit score?

As mentioned above, a 656 FICO® Score is considered “Fair”. This is typically a result of situations such as:

  • You’ve had payment problems (late payments, missed payments, etc)        
  • Accounts have been charged off & sent to collections        
  • Sometimes even foreclosures & bankruptcies

Approximately 17% of all consumers in America have FICO® Scores in the “Fair” range (656-669).

With a 656 FICO® Score, you’ll mostly be dealing with “subprime” lenders. Which means you’ll be charged relatively high interest rates & fees.

How to improve a 656 credit score

To improve your credit score, you need to focus on fixing the underlying factors.

  • Always make your minimum payments, and ensure they’re paid on time        
  • Keep your credit card balances as low as possible (also known as a low utilization rate)        
  • Build your credit file by making sure the accounts you do open, get reported to the 3 major credit bureaus (Equifax, Experian & Transunion)        
  • Only apply for credit when necessary, this keeps your hard inquiries at a minimum

Not sure where to start? A dedicated credit repair agency, like us, can work with you to ensure you’re maximizing all avenues when it comes to improving your score.

What can you do with a 656 credit score?

As mentioned previously, a 656 credit score is considered “Fair”. So your lending options are going to be somewhat limited. You’ll mostly get lending through subprime lenders.

Subprime lenders will charge higher interest rates & fees, as they’re taking on “higher risk” clients.

What kind of interest rate can you get with a 656 credit score?

It will typically only be subprime lenders that will approve your applications, and this comes with higher interest rates & fees.

These higher interest rates can cost you thousands of dollars in added interest over the lifetime of your loans, in comparison to if you had a “Good” credit score.

We highly recommend you take the necessary steps towards repairing your credit, and securing a better financial future for yourself, before applying for loans.

The Importance of Regularly Monitoring Your Credit Score

Irrespective of whether your credit score is low or high, it's crucial to monitor it frequently. Regularly monitoring your score helps you identify potential errors, and fraudulent activity, enabling you to take immediate action to correct them.

Moreover, monitoring your credit score gives you a better understanding of how your financial choices impact your creditworthiness. It allows you to identify any areas in which you need to improve and take measures to boost your score.

It's also a means of early detection of identity theft or fraudulent activity, which can minimize the level of damage done, and protect you from future financial harm.

Thankfully, monitoring your credit score is relatively straightforward. Many credit card companies offer free credit score monitoring services, and several free credit score websites are available online.

Understanding Credit Scores

Credit scores are numerical values that represent a person's creditworthiness, calculated using complicated algorithms. Several factors, such as payment history, credit utilization, length of credit history, and credit types used, contribute to the calculation.

Credit scores range from 300-850, with higher scores implying better creditworthiness. A score of 670 or above is considered good, while a score below 580 is deemed poor.

It's crucial to grasp your credit score's significance because it impacts your capacity to secure loans, credit cards, and other financial products. It also affects the interest rates charged on loans and credit cards.

Frequently examining your credit score for precision and taking necessary actions to improve it is vital. Numerous credit reporting agencies offer free annual credit score reports, so exploit this resource to remain updated on your credit status.

Need help improving your credit score?

Can I get a mortgage/home loan with a 656 credit score?

It will be difficult to secure a mortgage with a 656 credit score, but it is definitely possible.

It will be expensive (higher interest rates & fees), and can cost you 10s of thousands of dollars in extra interest over the lifetime of your loan.

Instead, we recommend focussing on improving your credit score, to at least 670-739 (which is considered “Good”). Once you’ve increased your score, you’ll be in a much better place to apply for a mortgage & most importantly, you’ll save yourself a ton of money on interest payments.

Can I get a car loan with a 656 credit score?

You shouldn’t have any problems getting an auto loan with a 656 credit score. But do expect to pay more for the loan than what you would with a “Good” credit score (between 670-739).

You will still be considered higher risk by the lender and subsequently be charged higher rates, so you might consider increasing your credit score before getting an auto loan.

Can I get a personal loan with a 656 credit score?

Yes you should be able to get a personal loan with a 656 credit score. It may take a little bit of searching around for the right lender, but it is possible.

Bottom Line

Let’s face it, a 656 credit score is OK, but can be better. Applying for any forms of lending is slightly difficult, and you’ll pay higher interest rates & fees.

The best course of action (by far), is to improve your credit score first before you apply for loans. Not only will it open more doors for you, it will also save you a ton of money in the long run (due to lower interest rates).

Need help improving your credit score?

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