A 645 Credit Score Is Not a Bad Score

The bottom line is that while a 645 credit score is still 66 points below the average credit score in the United States according to Experian, it is far from a “bad” score. To illustrate this point we will make use of statistical data courtesy of FICO.

The above chart shows the estimated default rate on new loans two years after origination based on credit score. This chart provides some perspective on how lenders use credit scores. Lenders primarily view your credit score as a measure of the likelihood that you are going to pay back the money that they lend you. In short, your credit score helps in their assessment of the risk of lending you money. As you can see from the chart above, the lower your credit score the higher the likelihood that you default within two years of being issued the loan.

Lenders are going to be weary of lending money to consumers that have a higher probability of not paying them back. The good news is that a 645 credit score is in the 3rd least risky category of scores. Statistically speaking, borrowers with a 660 credit score (right in the middle of the 640-679 range) will not default in the first two years of being granted a loan 91% of the time. Another way of looking at this score is that you are more than 40% less likely to default on a loan compared to a consumer with a 600 credit score. So while a 645 credit score is far from perfect (it is still below the average credit score after all) it is far from a bad credit score.

What You Can Get Approved For With a 645 Credit Score

As indicated earlier, most of the time there are no hard and fast rules when it comes to how lenders decide on approving applications for new credit. There are a number of factors that they will consider in addition to your credit score, including your monthly income. But in the sections below we have outlined what we believe is the most likely outcome based on our research on credit scores and lender criteria.

Can You Get a Credit Card with a 645 Credit Score?

The short answer is yes. You will be able to get approved for many credit cards with a 645 credit score including a number of branded credit cards offered by banks. Looking at lender disclosures we found that the following banks had credit card customers with credit scores in the 645 range:

• Bank of America – 11% of its customers had credit scores between 620 and 680
• Wells Fargo – 15% of its customers had credit scores between 640 and 679
• Capital One – 29% of its customers had credit scores below 660
• JPMorgan Chase Bank – 11% of its customers had credit scores below 660

On the one hand, clearly these banks (which are the largest banks in the United States) have provided credit cards to consumers with credit scores around the 645 level. This is based on their disclosed credit card portfolio statistics.

However, as should be observable, credit scores below the 660 mark represent a minority of their credit card portfolios. Said another way – while it is possible to get approved for a branded credit card with a 645 credit score, it is far from a guarantee.

Can You Get a Mortgage with a 645 Credit Score?

It is unlikely that you will be approved for a mortgage with a 645 credit score, but not impossible. The chart below shows the categorization of mortgage approvals in the United States by credit score and is based on data from 2016 to 2021 from the FHFA database.

What should be pretty clear is that the overwhelming majority of mortgage approvals are to people that have credit scores that are considered “good” or better. For the two lowest categories, “poor” and “very poor” they represented only 3% of mortgage approvals over this 5 year period. Importantly, the second lowest category (which is where a 645 credit score would fall) represented less than 3% of mortgage originations. Therefore, while getting a mortgage with a credit score this low is not impossible, the odds are strongly against you.

Can You Get an Auto Loan with a 645 Credit Score?

The short answer is yes, most likely. You will be able to get approved for an auto loan with this credit score. However, the interest rate offered to you will be higher than the prime rate and there will be a fewer number of lenders available.

Can You Get a Personal Loan with a 645 Credit Score?

You will be able to get approved for personal loans, but the number of options will be more limited, and the rate charged will be higher, as discussed and shown earlier.

Can You Get an Apartment Rental Lease with a 645 Credit Score?

The short answer is yes, most likely. A study by RentCafe in 2020 found that the average credit score of renters in the United States was 638, and so you are just above the average. This doesn’t mean that you will definitely get approved for any apartment rental as the standards that landlords set will vary but the odds are in your favor of getting approved.

Is 700 a Good Credit Score?

With a 645 credit score your sights should rightfully be set on increasing your score to the 700 threshold. Not only is that the logical next milestone, but it also would shift you from the “poor” categorization into the “fair credit” category. A 700 credit score is still below the average credit score in the United States of 711, so we still don’t consider it a good credit score, but admittedly it is also not a bad score.

What is considered a Good Credit Score?

We consider a 750 credit score to be a good credit score. The answer to this question will vary depending on who you ask, but in our view a good credit score is high enough to allow you to get approved for most forms of credit extension. With a 750 credit score not only are you comfortably above the average credit score in the United States, but when it comes to getting approved for a mortgage (the gold standard of credit approvals) your score places you above the median. This means that your odds of being approved for a mortgage with a 750 credit score are very good. With a 750 credit score you will also be eligible for most credit cards, personal loans and auto loans with attractive features and rates.

How Can You Improve From a 645 Credit Score?

A 645 credit score is not a bad score to have but there is a lot to be gained from improving your score from this level including access to more financial options and also cheaper financing costs. The following are steps you can take:

• Get Copies of Your Credit Reports: the first step we’d recommend would be to obtain a copy of your credit reports from each of the credit bureaus (Experian, TransUnion and Equifax) and review them thoroughly to first ensure that all the information on the reports is accurate. It is very important to understand what happened that resulted in your score falling to this level. Every consumer is entitled by law to a free copy of their credit report from each of the three credit bureaus once a year. You can do this by visiting the Annual Free Credit Report. If you notice that there are irregularities on your credit report, you can act by sending a letter to the relevant credit reporting company disputing the information. Viewing your credit reports will also provide you with an idea of what has impacted your score in the past such as late payments and delinquent accounts. You can find more information about disputing information on your credit reports here:
  • Equifax: visit their Credit Dispute Page
  • TransUnion: visit their Disputes Page
  • Experian: visit their Disputes Page
• Prioritize Paying Your Bills On-time – not making your payments on your outstanding credit or making late payments is an easy way to impact your credit score. Your payment history is responsible for 35% of your credit score and so having a poor payment history is one of the common causes of low credit scores. A good practice that is easy to implement is to enroll in auto-pay for not just your credit repayments but other bills. Doing this at least helps you significantly lower the risk that you forget to make a payment and end up becoming delinquent.
• Limit Opening New Accounts – one of the inputs the credit reporting agencies use in calculating your credit score is the length of your credit history. Therefore, each time you open a new account, the length of your history declines. The impact can be more significant if you open a large number of new accounts in a short period of time. This doesn’t mean that you should never open new accounts; rather, it is good practice to avoid opening multiple new accounts each year, especially if it’s just in the pursuit of rewards or cash bonuses.
• Keep Credit Card Utilization Low – another input the credit bureaus use in calculating your credit score is to look at the total amounts owed on revolving credit, such as credit cards, relative to the allowable limits on the credit cards. Keeping credit cards fully maxed out is not only financially imprudent but it has a negative impact on your overall credit score. Ideally, it is good practice to pay off your credit card balance each payment cycle. More practically, prioritize keeping your revolving credit well below the limits.
• Monitor Your Credit Reports Closely – finally, it is a good idea to pay close attention to your credit scores. Checking your credit reports once a year should be the minimum frequency as while the information might not change every day, over the course of a year a lot can change. Monitoring your credit reports monthly (what we would recommend) allows you to keep track of the progress you’re making in improving your credit scores and enables you to be proactive in the event that an issue arises. There are a host of free credit monitoring tools including Credit Karma and Credit Wise.

Next Steps

While a 645 credit score is still considered poor, by implementing some of the best practices we outlined above you can start to see an improvement in your credit score in a matter of months. But you should view your credit score and credit history over a longer time frame and plan to develop habits that you can sustain over the long run. Your score is also on the threshold of the next highest category and moving up will significantly increase the number of lenders that are willing to provide credit to you as well as the rates and terms they offer.

Similar Credit Scores: 575, 585, 598, 600, 610, 613, 615, 627, 633, 660, 671, 750