A 633 credit score is considered slightly below average and is categorized in the “fair credit score” group. Despite the fact that you are not in the poor score category, there is still so much room for growth, and you should take advantage of it. Think of your score as a stepping stone to bigger...
A 627 credit score is something to work on and improve as it falls into the fair credit score range. Consumers in this category may be regarded as subprime borrowers. They statistically have a higher rate of becoming delinquent than borrowers in higher credit score categories.
The impact of poor scores may be felt in other areas. For instance, low credit scores may result in higher insurance premiums because of the increased perceived risk. Landlords may be hesitant to approve rental agreements for apartments.
You’ll be learning about the best ways to improve a 627 credit score. If you need loans for 627 credit scores, we’ll also cover some available options for auto loans, credit cards, and mortgages.
- Is 627 a Good Credit Score?
- Credit Cards for a 627 Credit Score
- Car Loan Rates for a 627 Credit Score
- Personal Loan for a 627 Credit Score
- Mortgage with a 627 Credit Score
- How to Improve a 627 Credit Score?
Is 627 a Good Credit Score?
It’s generally not a good score because it’s far below the limit imposed by lenders for conventional credit products. For instance, many card issuers typically require applicants to have scores of at least 660.
According to the FICO score ranges, this score falls into the fair category.
While about 90% of top lenders use the FICO scoring model, some use the VantageScore model. It has a range of 300 to 850 with the following categories.
There is no hard-and-fast rule regarding score ranges. You will also find some unique tables. For instance, Experian categorizes credit scores ranging from 601 to 660 as fair. A large majority of lenders may regard borrowers with scores of 630 and below as having poor credit.
All things considered, a 627 credit score carries a negative meaning. It may imply that you have had recent run-ins with credit mistakes, for instance:
- Missing a payment by 30 days, 60 days, or 90 days;
- Having a charged-off account;
- Maxing out credit cards, which increases the credit utilization rate.
Credit mistakes tend to significantly impact consumers with a relatively short credit history or few active accounts. Their impact diminishes as they age, and most negative marks fall off reports after they have aged for seven years.
Credit Cards for a 627 Credit Score
Unfortunately, a credit score of 627 is too low to qualify even for fair unsecured credit cards offered to consumers with not-so-good scores.
Credit cards for 627 scores will be secured and designed to help the applicant build up their credit rather than assisting them to access new credit. Here are some secured credit cards that you may have:
BankAmericard® Secured Credit Card
The card is specifically geared at helping applicants establish, strengthen, and rebuild their credit. It has a 0$ annual fee with a standard variable APR of 22.99%. You get some extras like monthly free FICO® score updates and a $0 liability guarantee.
Discover it® Secured Card
With no annual fee and a 2% cashback program at selected gas stations and restaurants, the Discover It® Secured credit card is as good as it gets for credit cards for a 627 credit score.
Cardholders also get a 1% cashback on other purchases. Discover reports the payment history to the three credit bureaus, and you’ll only need to make a $200 security deposit to get started.
Citi® Secured MasterCard®
Applicants only need to make a minimum security deposit of $200 to receive the Citi Secured MasterCard. It does not have an annual membership fee, and the purchase APR is 22.49%.
Car Loan Rates for a 627 Credit Score
Is it possible to get a car loan with a 627 credit score? Yes, it’s quite likely, but you will end up paying higher interest rates than consumers with better credit.
What will be the interest rate for the 627 credit score? ValuePenguin estimates that people with a 627 FICO score may end up paying a rate of 9.72% compared to consumers with excellent credit who may pay 3.60%. The auto loan term may also influence the rates. For instance, 72-month term loans tend to have higher interest rates than 36-month loans.
You will also need to choose your lender carefully. There are various sources for car loans, including captive finance lenders (lending companies associated with particular dealerships), credit unions, banks, and buy-here-pay-here lots.
If mainstream lenders turn you down for credit, it may be tempting to choose alternative loan options from buy-here-pay-here lots. However, these loans may be quite expensive. Avoid them altogether.
Personal Loan for a 627 Credit Score
Is 627 a good credit score to obtain a personal unsecured loan? Installment loans have an added risk to lenders because they’re not backed by any assets. They are often called signature loans because the borrower is only bound by their signature on the loan agreement to repay the loan. That’s why borrowers often require good credit, sometimes 680+, and verifiable income to qualify.
Outside the mainstream lenders, alternative loan providers may offer unsecured installment loans to customers as long as they demonstrate the ability to repay. Some of these companies should be closely scrutinized, mainly if their APRs are above 35.99%. So-called payday and tribal lenders may offer personal loans with triple-digit APRs, making them too expensive to manage.
Mortgage with a 627 Credit Score
Qualifying for a conventional mortgage with a 627 credit score may be a bit tricky. There are not as many traditional lenders that offer loans to subprime borrowers any more.
You can check it out yourself by trying to get pre-approved for a mortgage by your targeted lender. Pre-approvals often involve a soft credit check. They’re also quite fast, and you might even get an automated reply in as little as 10 minutes.
Now, getting a mortgage with a 627 credit score may be more likely if you consider an FHA loan. Here are some of the mortgage requirements:
|580+||Required down payment of 3.5%|
|500 – 580||Required down payment of 10%|
The only limitation of FHA loans is that they will be restricted to a maximum limit.
|2021 FHA loan ceiling, high-cost counties||Up to $822,375 for single-family homes|
|2021 FHA loan ceiling, low-cost areas||$356,362 for single-family homes|
You can see mortgage rates for FHA loans by getting pre-approved by lenders such as Quicken Loans, Penny Mac, or AmeriSave Mortgage.
Some borrowers may also qualify for USDA or VA loans that typically have lower score requirements. Because the chances of buying a house with a credit score of 627 may be low, you may consider putting off the purchase for another suitable time when your score is better.
How to Improve a 627 Credit Score?
An improved credit score will unlock better real-world opportunities. You will have more confidence applying for new jobs. It will be much easier to sit down with the loan officer and discuss your options. You may even enjoy hidden perks like not having to offer a security deposit for your utilities. Now, here is how to get there:
Assess your credit report for inaccurate details
The credit reporting process is vulnerable to errors. For instance, mistakes may be made in updating your payment information, resulting in a late or missed payment entry.
Start checking for errors by using annualcreditreport.com to obtain free credit reports from the three bureaus. If you find inaccuracies, file disputes with the bureaus through their online dispute centers or write physical letters. You can also get credit help from a repair company. They have more expertise in identifying potential dispute candidates and will facilitate the dispute process on your behalf.
Rebuild your credit with new credit cards or installment loans
Find and apply for secured loans or credit cards. You’ll have a higher chance of approval and only work with lenders or companies that report repayments to all the bureaus.
Now, following a new credit application, it’s typical for your scores to take a slight hit. That’s because the lender will need to record a hard inquiry if they’re specifically evaluating your application to offer the loan.
Make timely payments once the loan or credit card comes up for repayment each month. The lender will report your track record, resulting in boosted scores.
Aim to reduce your revolving account balances by at least 25%
According to the FICO Consumer Credit damage assessment report, you can see a significant credit boost if you reduce your credit utilization rate by 25%. For instance, someone with a score of 607 may have their score increase to 635.
You may need to make some life adjustments to generate the extra money for debt repayment. It’s equally important to find additional ways of increasing your income.
Become an authorized user
If you want to get a loan with a 627 credit score, You might consider approaching someone with better credit than you and asking them to add you as an authorized user on one of their credit card accounts.
The account should ideally have a low utilization rate, for instance, less than 30%. It should also have a high credit limit and longer credit age than your current accounts.
While you can certainly find mortgages, personal loans, or credit cards for people with a 627 credit score, it’s better to have a decent score as it gives you more opportunities.
You can certainly improve a credit score of 627 to the 700s range by making easy changes to how you manage debt. Throughout your journey, you should also be avoiding routine mistakes such as closing down aged accounts or overlying on your credit cards.