640 Credit Score. Is 640 a Good Credit Score or Bad?
“My credit score is 640! What do I do?”
Having a 640 credit score isn’t a good score. You’ll need a score of 700 or higher to obtain “good credit.” However, a 640 score isn’t bad either. In fact, it’s a “fair” credit score. It doesn’t matter if your 640 credit score good or bad, you still need to have your finances organized so you can improve it.
Fear not. Having a low credit score isn’t a bad thing if you don’t have too much credit history. But this is something you need to fix if you’re if you want to obtain affordable rates. While the score isn’t bad, you might get locked out of getting approval for loans and the best interest rates.
As a result, you’ll be able to obtain a loan or credit card with a 640 credit score. But having a bit of credit improvement will help save you money and give you more options. With some credit improvement, you’ll have more options and more able to obtain more money.
Here, we’ll show you what you’re eligible to apply with your current credit score, the types of people who have A 640 credit score, and the procedure that gives you more options and help you save more money.
Credit scores tend to change daily or weekly, so you’ll already a larger credit score than you already think. Make sure you get you to stay active on your financial management to ensure that your score will increase in the long run.
What Does a 640 Credit Score Mean?
So what is a 640 credit score?
Generally speaking, having a credit score of 720 or higher is considered a good score. Since your score is at 640, you just need to make a few adjustments in order to be in good financial standing.
With a 640 score, you can get accepted for a few loans, but you’re still at a disadvantage. By not taking the correct steps to increase your score, it can cause a hindrance to accomplish certain activities and milestones in your life.
Failing to raise your credit score will negatively affect your ability to obtain car loans, credit cards, and mortgages. Additionally, it can prevent you from completing basic lifestyle needs such as applying for utilities (electric, gas, etc.).
No matter how you got to your 640 scores, your credit will take some time to overcome. No credit score is permanent. This means you can increase them over time by taking effective action. If you look at your credit report and analyze your FICO score, you can identify multiple events that reduced your score.
As time progresses, the events that have caused a negative impact on your score will be diminished. If you’re patient, avoid making the same mistakes, and take the proper steps to help improve your credit score, and your credit score will begin to increase.
What Can a 640 Credit Score Get You?
Item |
Do You Qualify?
|
---|---|
Any Credit Card | NO |
No Annual Fee Credit Card | YES |
Big Initial Credit Card Bonus | NO |
Credit Card with 0% Financing | YES |
No Foreign Fee Credit Card | YES |
Favorite Store’s Credit Card | YES |
Airline/Hotel Credit Card | NO |
Best Mortgage Rates | NO |
Auto Loan with 0% Intro Rate | NO |
Lowest Auto Insurance Premiums | NO |
Personal Loan | MAYBE |
Apartment Rental | MAYBE |
Finding a place to live is difficult, and having a credit score of 640 might complicate your search. Most prospective landlords may or may not create a hard cutoff below or above your score.
They might have a bad experience with “fair” credit lenders and fear getting scammed again. It’s impossible to determine.
One thing you can count on is the classic economic rule of “supply and demand.” If your landlord owns a nice housing complex in a popular neighborhood, the landlord might have the ability to pick a more qualified tenant.
Having a 640 credit score can put you at a disadvantage. Being absent from a high level of demand, your potential landlord might look over your score when evaluating your creditworthiness. They can base their decision based on your payment history, references, or payment history from your previous landlords.
Some states allow for prospective employees to look at the important factors that make up your credit score. They can do so with your permission and only see a smaller version of what is given to creditors, and they’ll be unable to view your credit score.
Remember, having a 640 credit score isn’t terrible, but it can make your life difficult. We suggest that you proactively manage your credit score so that it can improve within the following months.
What Does It Mean If You’re at 640 Credit Score and Rising?
With a 640 credit rating, you’re on the average side of the spectrum, but there are still some things you can do to help increase it. Remember, the difference between having bad marks on your credit score and having no credit history is important to achieve a better score.
On average, it can take around 10 years to recover from bankruptcy fully. For mortgage loans, it will take around 3-8 years to recover if you’re late on your monthly payments. To give an estimate, FICO states that your score drops around 80-100 points if you’re 30 days late on the mortgage.
Additional drop marks on your credit report can become fatal with a drop around 140-250 points after getting bankruptcy or foreclosure. The deciding factor on how far your credit score drops depends on your previous score.
Either way, having a missed payment can cause severe damage to a 640 credit score. Repairing your credit score means that you’ll have to remove bad marks from your credit history, making payments on time, and consolidating your debt into a personal loan.
Just because you’re eligible for a loan at 640, doesn’t mean you should jump at the first offer. Most personal loan sites give loans to borrowers with a score of 540 or lower. And we’ve seen auto loans be delivered to borrowers within the 400 range.
While the rate on the loan will be lower than what you’ll pay for a cash-on-advance, it will still cost you thousands in interest by the time you pay it off. Taking some months to boost your credit score can make a huge difference in reducing your interest rates.
No matter your financial status, you have to take the right steps to get your credit score back in good standing. Although your score is at 640, your score can turn to 480 if you’re not diligent with your finances.
As we stated earlier, you have to be proactive. Use software to track your expenses, speak to creditors who issued your credit card, create a calendar to mark payment due dates. By following these steps, chances are you’ll be able to increase your score to 700 or higher.
What It Means If You’re at 640 Credit Score and Dropping?”
If your credit score is dropping, then you’re financially at risk. This means that you have to create a strategy in order to make better financial decisions so that your score doesn’t continue to drop.
Debt consolidation can help borrowers reduce credit most scenarios, but we suggest that you use credit repair because it does a myriad if things improve your credit score.
- You can improve your credit utilization rate by paying off the balance. To protect your score, don’t rush to max out your credit score again.
- Changes the revolving debt from your cards to a non-revolving debt with a specific payoff date and fixed payment.
- Makes it easier for credit users to manage one payment instead of many so you won’t have to risk having late or missed payments.
- Saves interest and lowers monthly interest. You can use this prevent further debt or quickly pay off your debt.
The difference between having bad marks on your credit report and the lack of a credit history is important on how you’re going to increase your score.
On average, it can take around 10 years to fix your credit card rating after declaring bankruptcy. For mortgage payments, it can take around 3-8 years. Your credit card score falls under 80-100 points if you’re over 30 days late on your house mortgage.
This table shows the estimated time it takes to restore one’s credit score.
#1 Borrower | #2 Borrower | #3 Borrower | |
---|---|---|---|
Initial FICO Score | 620 | 720 | 780 |
Time to Recover Your Score: | |||
Mortgage – 30 days late | 9 months | 2.5 years | 3 years |
Mortgage – 90 days late | 9 months | 3 years | 3 years |
Short Sale/Settlement | 9 months | 7 years | 7 years |
Short Sale (deficiency balance) | 3 years | 7 years | 7 years |
Foreclosure | 3 years | 7 years | 7 years |
Bankruptcy | 5 years | 7-10 years | 7-10 years |
However, there are other bad marks on your report that can be worse depending on your initial score in the first place. The rate of how fast your credit score drops depends on how high your credit score was. The higher it is, the more you have to lose. Basically, protect your credit score, and you’ll be able to fix this financial issue within a few months or years.
Either way, having a missed payment can lower your pristine credit score under 640. Repairing your credit means getting all of the bad marks off of your credit report and consolidating all of your debt into a low-rate personal loan.
Additionally, you can sign up for a secured credit card. These cards allow for credit borrowers to obtain a card and start rebuilding their credit again.
How to Improve Your 640 Credit Score?
Most borrowers tend to ask, “Is 640 a bad credit score? How can I improve it?”
If you’re unable to wait for until your credit score improves, you’ll be able to make the attraction more appealing to lenders in multiple ways:
Have a Bigger Down Payment
A down payment that’s at 20% or increases the chance of getting an accepted loan. This is because you already have home equity on the house. Also having a larger down payment means smaller mortgage payments.
Lower the Debt-To-Income Ratio
The debt-to-income ratio compares the minimum monthly payment on your current debt. This includes your gross (monthly income, mortgage) monthly income before tax deductions are in place.
Any debt-to-income ratio that’s above 41% is considered high by most lenders, so having a lower number is better.
However, if you do apply and your mortgage proposal is turned down, it’s not the end of the world. We suggest that you ask your lender what procedure must be taken in order to obtain approval.
Or, you can find a lender that has more forgiving guidelines – they are out there.
Increase Your Cash Revenue
If you can show a document that explains you have over several months of mortgage payments in your bank, the lenders will have a more confidence that you’ll repay your loan during a cash crunch.
Stop Payment Shock
Payment shock occurs when the cost of your new housing payment is greater than your previous one. The approval chances increase if you’ve been paying a previous mortgage or rent in an account that’s similar to the recent payment.
Conclusion
A 640 score will make it difficult to obtain a loan, but it’s not impossible. However, you’re 40 points off from the best rates. So, you should take a few months to repair your credit score. Make sure that you focus on fixing your credit score, and you’ll gain access to a world of cheaper money within a year.

Darryl founded Smith Financial Advisors Inc. in 2006 after over 30 years experience in financial services including Mergers & Acquisitions, Investment Banking and traditional Commercial Banking activities at Bank One. Smith Financial Advisors is a Registered Investment Advisor in the State of Illinois. The firm specializes in Investment management, financial planning, and retirement planning.