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A fair credit score falls in the mid-lower range of the credit-scoring spectrum. With the FICO® scoring model, which ranges from 300 to 850, a fair score is 580 to 669.

Fair credit is better than poor credit but below the average credit score. While you’ll likely be able to get a credit card or loan with fair credit, you probably won’t qualify for the most favorable rates and terms.

Read on to learn how fair credit compares with other credit score ranges, the difference having good credit can make, and what you can do to build your credit.

What Is Fair Credit?

What “fair credit” means will depend on the scoring model. With FICO, the most widely used credit scores by lenders in the U.S., fair credit is a score between 580 and 669. With VantageScore®, another popular scoring model, fair credit is a score of 601 to 660.

The fair credit range is above poor credit but below good credit, and is considered to be in the subprime score range.

Credit scores are calculated using information found in your credit reports (you have three, one from each of the major consumer credit bureaus). People typically have multiple, not just one, credit score, and these scores can vary depending on the scoring model and which of your three credit reports the scoring system analyzes. While each score may be slightly different, they typically fall into similar ranges and scoring categories, such as poor, fair, good, and excellent/exceptional.


💡 Quick Tip: A low-interest personal loan from SoFi can help you consolidate your debts, lower your monthly payments, and get you out of debt sooner.

Is Fair Credit Good or Bad?

As the name “fair” implies, this score is okay, but not great. A fair credit score isn’t the lowest category on the FICO chart — that’s the poor credit category, which runs from 300-579. But it’s definitely not the highest either. Above fair credit, there is good credit (670-739), very good credit (740-799), and exceptional credit (800-850).

With a fair credit score, lenders will likely see you as an above-average risk and, as a result, charge you more upfront fees and higher interest rates. They may also approve you for a lower loan amount or credit limit.

With fair credit, you might also have difficulty getting approved for certain financial products. For example, you might need a higher credit score to get the best rewards cards or certain types of mortgages. Landlords and property managers may also have credit score requirements. You might have to pay a larger security deposit if you have a fair credit score.

Is a 620 Credit Score Fair?

Yes, 620 is within the 580-669 range for a fair FICO score and, thus, would be considered a fair credit score. A 620 is also in the VantageScore range for fair (580 to 669).

Recommended: 8 Reasons Why Good Credit Is So Important

Why Do I Need to Know My Credit Scores?

A credit score is a three-digit number designed to represent someone’s credit risk (the likelihood you’ll pay your bills on time). Lenders use your credit scores — along with the information in your credit reports — to help determine whether to approve you for a loan or credit line and, if so, at what rates and terms. Many landlords, utility companies, insurance companies, cell phone providers, and employers also look at credit scores.

Knowing your credit scores can help you understand your current credit position. It also provides a baseline from which you can implement change. With time and effort, you may be able to build your credit and gradually move your credit score into a higher category, possibly all the way up to exceptional.

Recommended: How Often Does Your Credit Score Update?

Using Credit Bureaus to Find Credit Scores

It’s a good idea to periodically review your credit report from each of the three major credit bureaus (Equifax, Experian, and TransUnion) to make sure all of the information is accurate, since errors can bring down your scores. You can get free weekly copies of your reports at AnnualCreditReport.com .

However, your credit reports will not contain your credit scores.

Fortunately, there are easy ways to get your credit scores, often for free. Many credit card companies, banks, and loan companies have started providing credit scores for their customers. It may be on your statement, or you can access it online by logging into your account.

You can also purchase credit scores directly from one of the three major credit bureaus or other provider, such as FICO. Some credit score services and credit scoring sites provide a free credit score to users. Others may provide credit scores to credit monitoring customers paying a monthly subscription fee.

Recommended: How to Check Your Credit Score for Free

Reasons Your Credit Score Might Be Fair

Your credit scores are based on information in your credit reports, and different things can help or hurt your scores. FICO scores are based on the following five factors.

1. Payment History

This looks at whether you’ve made your debt payments on time every month and is the most important factor in computing your FICO credit score. Even one payment made 30 days late can significantly harm your score. An account sent to collections, a foreclosure, or a bankruptcy can have even more significant and lasting consequences.

2. Amounts Owed

This notes the total amount you’ve borrowed, including how much of your available credit you’re currently using (called your credit utilization rate). If you’re tapping a sizable percentage of your available credit on your credit cards (such as 30% or more), for example, that can have a negative impact on your score.

3. Length of Credit History

Experience with credit accounts generally makes people better at managing debt (research bears this out). As a result, lenders generally see borrowers with a longer credit history (i.e., older accounts) more favorably than those that are new to credit. All things being equal, the longer your credit history, the higher your credit score is likely to be.

4. Credit Mix

This looks at how many different types of debt you are managing, such as revolving debt (e.g., credit cards and credit lines) and installment debt (such as personal loans, auto loans, and mortgages). The ability to successfully manage multiple debts and different credit types tends to benefit your credit scores.

5. New Credit

Research shows that taking on new debt increases a person’s risk of falling behind on their old debts. As a result, credit scoring systems can lower your score a small amount after a hard credit inquiry (which occurs when you apply for a new loan or credit card). The decrease is small, typically less than five points per inquiry, and temporary — it generally only lasts a few months.

Steps That Can Help Improve Fair Credit

While you may still be able to qualify for loans with fair credit, building your credit can help you get better rates and terms. Here are some moves that may help.

•   Pay your bills on time. Having a long track record of on-time payments on your credit card and loan balances can help build a positive payment history. Do your best to never miss a payment, since this can result in a negative mark on your credit reports.

•   Pay down credit card balances. If you’re carrying a large balance on one or more credit cards, it can be helpful to pay down that balance. This will lower your credit utilization rate.

•   Consider a secured credit card. If you’re new to credit or have a fair or low credit score, you may be able to build your credit by opening a secured credit card. These cards require you to pay a security deposit up front, which makes them easier to qualify for. Using a secured card responsibly can add positive payment information into your credit reports.

•   Monitor your credit. It’s a good idea to closely examine the information in your three credit reports to make sure it’s all accurate. Any errors can drag down your score. If you see any inaccuracies, you’ll want to reach out to the lender reporting the information. You can also dispute errors on your credit report with the credit bureaus.

•   Limit hard credit inquiries. Opening too many new credit accounts within a short period of time could hurt your scores because credit scoring formulas take recent credit inquiries into account. When shopping rates, be sure that a lender will only run a soft credit check (which won’t impact your scores).

Reasons to Improve Your Credit Score

Building your credit takes time and diligence, but can be well worth the effort, since our scores impact so many different parts of our lives.

Loans

Credit scores are used by lenders to gauge each consumer’s creditworthiness and determine whether to approve their applications for loans. A higher score makes you more likely to qualify for mortgages, auto loans, and different types of personal loans. It also helps you qualify for more favorable lending rates and terms.

Credit Cards

Credit card issuers typically reserve cards with lower annual percentage rates (APRs), more enticing rewards, and higher credit limits for applicants who have higher credit scores. A fair credit score may qualify you for a credit card with a high APR and little or no perks. Improving your credit score could potentially give you the boost you need to qualify for a better credit card.

Security Deposits

Just found your dream apartment? A fair credit score could mean a higher security deposit than if you had a good or better credit score. With a poor or fair credit score, you may also be asked to pay security deposits for cell phones or basic utilities like electricity.

Housing Options

A fair or poor credit score can even limit which housing options are available to you in the first place. Some landlords and property management companies require renters to clear a minimum credit bar to qualify.

Recommended: Typical Personal Loan Requirements Needed for Approval

Can You Get Personal Loans With Fair Credit?

It’s possible to get a personal loan with fair credit (or a FICO score between 580 and 669) but your choices will likely be limited.

Personal loan lenders use credit scores to gauge the risk of default, and a fair credit score often indicates you’ve had some issues with credit in the past. In many cases, borrowers with fair credit may be offered personal loans with higher rates, steeper fees, shorter repayment periods, and lower loan limits than those offered to borrowers with good to exceptional credit.

Although some lenders offer fair credit loans, you’ll likely need to do some searching to find a lender that will give you competitive rates and terms.


💡 Quick Tip: Generally, the larger the personal loan, the bigger the risk for the lender — and the higher the interest rate. So one way to lower your interest rate is to try downsizing your loan amount.

The Takeaway

Having a fair credit score is better than having a poor credit score and doesn’t necessarily mean you won’t qualify for any type of credit. However, the rates and terms you’ll be offered may not be as favorable as those someone with good or better scores can get. With time and effort, however, you can move up the credit scoring ladder. If you work on building your credit score until you have good or better credit, you’ll gain access to credit cards and loans with lower interest rates and more perks.

Think twice before turning to high-interest credit cards. Consider a SoFi personal loan instead. SoFi offers competitive fixed rates and same-day funding. Checking your rate takes just a minute.

FAQ

Is fair credit good or bad?

A fair credit score is neither good nor bad, it’s just okay. FICO credit scores range from 300 to 850 and a fair score is 580 to 669. It’s better than a poor credit score but below the average credit score.

What’s considered a fair credit score?

According to the FICO scoring model, which ranges from 300 to 850, a fair credit score is one that falls between 580 and 669. It’s one step up from a poor credit rating but below good, very good, and exceptional.

Is a 620 credit score fair?

Yes, a 620 credit score is considered to be in the fair range. According to the FICO scoring model, which ranges from 300 to 850, a fair credit score is one that falls between 580 and 669.

Photo credit: iStock/Ivan Pantic

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SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.

Disclaimer: Many factors affect your credit scores and the interest rates you may receive. SoFi is not a Credit Repair Organization as defined under federal or state law, including the Credit Repair Organizations Act. SoFi does not provide “credit repair” services or advice or assistance regarding “rebuilding” or “improving” your credit record, credit history, or credit rating. For details, see the FTC’s website .

Non affiliation: SoFi isn’t affiliated with any of the companies highlighted in this article.

Checking Your Rates: To check the rates and terms you may qualify for, SoFi conducts a soft credit pull that will not affect your credit score. However, if you choose a product and continue your application, we will request your full credit report from one or more consumer reporting agencies, which is considered a hard credit pull and may affect your credit.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

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Losing your job can be emotionally painful (weren’t you doing a good enough job?) and can throw your finances for a major curveball. How will you pay your bills? How long will this situation last?

Take a deep breath, and arm yourself with knowledge for financially surviving a layoff. Whether you’re going through this situation right now or are worried it might occur, you can likely make adjustments and you can make and tap resources to weather this challenge. It’s a phase to move through but not to define you. Read on to learn:

•   How to budget when laid off

•   How to file for unemployment benefits

•   How to prioritize debt

•   How to bring in income.

Preparing Financially for a Layoff

Unfortunately, layoffs seem to be a part of modern life. In the first nine months of 2023, there were more than 605,000 layoffs, which marked a 198% increase versus the year prior. That’s not heartening, but it’s a way of saying that if you are laid off, you are not alone, and it can also be wise to prepare financially for a layoff if you are currently employed.

Not having a steady income probably means you’ll have to figure out how to pay your bills when laid off. Until you find another stream of income, it’s important to keep your budget in order and learn to live within your means. Being financially prepared means having a clear understanding of what your expenses are so you can stay on track, especially with debt, if you have it. There are also resources you can access that may help with your cash flow during this difficult time.

Steps to Take to Prepare for a Layoff

Here are some smart moves that can help you be prepared and not panic if you do get laid off.

Start an Emergency Fund

A common strategy is to build up an emergency fund prior to an event like job loss. It’s a way of preparing for a layoff before it happens. An emergency or rainy day fund is typically a savings account that you’ve been adding to on a weekly or monthly basis. Having roughly three to six months’ (or more) worth of monthly expenses is helpful. That sum can tide you over at a moment of job loss and give you peace of mind.

•   You may want to automate your savings and have a small amount ($25 can get the ball rolling) transferred from checking to savings every payday. Or have that amount direct-deposited into savings.

•   The emergency fund should only be accessed for emergencies, as its name suggests. (No fair dipping into this kind of savings account when there’s an amazing sale at your favorite store.)

•   If you have the opportunity to contribute more than usual (say, you receive a financial windfall, like a bonus or a tax refund), do boost your emergency savings because you never know when you will need to tap into that account.

Budget, Budget, Budget

If you have an inkling that your company is preparing to lay off some employees or if you lose your job, it’s wise to double-check your weekly budget. This means separating your necessary spending from your discretionary spending.

•   Necessary expenses include things like rent or a mortgage, utilities, food, and health insurance. Don’t forget about minimum debt payments, such as student loan and credit card payments.

•   Discretionary spending may include traveling, dining out, new clothes, and entertainment.

It can be helpful to focus on how much you need to spend each month for necessary expenses (some people refer to this as their monthly “nut.”) Make a list of these basic living expenses and see what they total. Then, pre-layoff, you’ll also see how much you can allocate for activities that you want to do. It’s probably not the best idea to spend every penny each month. You want to have extra money at the end of the month to put toward savings.

If and when a layoff hits, you’ll focus on necessities and minimize your discretionary spending (more details below). You can also tweak your budget when unemployed to, say, cut back on some long-term savings to get you through this moment.

File Unemployment Benefits

If you do lose your job, you may be able to qualify for unemployment benefits. This can get some funds flowing your way to help tide you over.

•   Read the eligibility requirements to see if your situation aligns with the rules for unemployment. The eligibility requirements are likely to vary from state to state and may be determined on a case by case basis; payment amounts will vary as well.

•   If you qualify, filing for unemployment benefits will allow you to receive payments if you are out of a job due to no fault of your own. (There is a possibility that those who are fired because they don’t meet job qualifications may receive funds as well.)

•   Generally, to qualify for unemployment benefits, you should be able and available for work, as well as be looking for employment. Once you’ve determined your eligibility, you can file on your state’s official government office of unemployment compensation website. The site should give you guidance on when to expect benefits.

Ask About Severance Packages

Severance pay can be provided for employees after they are no longer employed at a company. Severance is based on the duration of employment, but your employer is not required to provide severance upon termination.

If you were terminated through no fault of your own, employers may pay, for example, two weeks of salary for each year of employment. Severance may also include health insurance benefits and even services to help you find a new job. These can be very helpful supports when you’ve lost your job.

Use Credit Cards Only for Emergencies

If you become unemployed, it’s wise to stop using credit cards to make purchases. Paying with your credit card creates debt that comes with high interest rates (currently more than 20%). At such high interest rates, debt can really snowball.

Also, when you are out of work, it can be challenging to pay an existing credit card balance. If you manage to pay the minimum balances of your credit card debt rather than paying in full every month, the credit card debt may cost you more over time since you also have to factor in added interest.

If you find yourself in this kind of a bind with credit card debt, take action. Consider a balance transfer credit card that offers no or very low interest rates for a period of time. Or speak with a debt counselor at a nonprofit organization like the National Foundation for Credit Counseling (NFCC).

Make Sure Emergency Funds Are in Order

Emergency funds, as mentioned above, are an important part of a financial plan and can be a lifesaver for someone who is unemployed. If you are in a situation where you unexpectedly don’t have a stream of income until you find another job, you’ll be more at ease if you have built up an emergency fund over time, as mentioned above.

In this case, you can dip into your emergency fund for mandatory expenses to fulfill your short-term needs. If you don’t have emergency funds, unemployment benefits become that much more important. Borrowing from a close friend or a family member might also be an option.

Practical Tips for Saving Money After a Job Loss

Saving money after a layoff can certainly be difficult. You don’t have the usual cash infusion to pay your bills and buy groceries. That is why you need to proceed with caution and learn how to economize when you lose your job. Here are strategies for making ends meet during this difficult time.

Get Back on LinkedIn and Start Networking

If you’re job-hunting, Linkedin can be a great tool for networking. The platform is set up so you can find and interact with former colleagues, alumni from your college, and professionals at companies you aspire to work for.

•   Start commenting on people’s Linkedin posts and have conversations with existing connections.

•   Build up your profile so recruiters know your job history, your professional skills, and that you are looking for work. This can lead to job opportunities.

Prioritize and Negotiate Any Debts if Needed

Continuing to pay down debt while unemployed should still be a priority. One strategy to pursue is paying off debt that has the highest interest rate. Debt with higher interest rates cost more, so paying this off first will have you saving money in the long-term.

But “How can I pay down debt if I don’t have income?” you are probably wondering. One answer: Try to negotiate your debt. It can be possible to work with your credit card company to negotiate interest rates, payment amounts, and the terms on your credit card debt.

Avoid Luxuries Temporarily

Being unemployed can be a frightening experience. You no longer have a steady flow of income and may not feel financially prepared to weather short-term expenses. To ease this burden, work to eliminate spending on luxuries. Now might be a good moment to downsize streaming services and other subscriptions.

Also eyeball what expenses you have on the horizon: If you had booked a vacation house or a cruise for a few months down the line, it may make good financial sense to investigate getting a refund. That money could be allocated toward your everyday expenses as you job-hunt.

Look at Investments and Retirement

If you are temporarily out of a job, do your best to keep your hands off your retirement funds. You worked hard to save that money, and it’s there to fund a long-term financial goal. That said, some people do tap their retirement accounts as a last resort when unemployed.

When you withdraw from your retirement account before the age of 59 ½, you will incur a penalty tax. However, there are some cases where you may be able to withdraw funds when unemployed without paying this.

You may be able to set up what’s known as a substantially equal periodic payments (SEPP) over five years or until you hit age 59 ½, whichever is greater. However, if you do receive this kind of distribution, it will likely count as income and may therefore lower any unemployment benefits you may be receiving. Talk with your plan administrator to learn more.

Start a Side Hustle

You might consider starting a side hustle to bring in some extra cash while looking for full-time work. There are many ways to earn more money. You could rent out an extra bedroom in your home or apartment, sell unwanted items, drive for Uber or Lyft, or market your professional skills on online service platforms such as Fiverr or Upwork. These are viable avenues to get some money coming in until you lock down a new job.

The Takeaway

Figuring out how to manage your finances when you are in between jobs can be stressful, but there are ways to prepare and then actions that can help you get by. Building and then tapping an emergency fund, accessing unemployment, and budgeting are some actions to take.

Also make sure your banking partner is making it easy and profitable for you to do business with them.

Interested in opening an online bank account? When you sign up for a SoFi Checking and Savings account with direct deposit, you’ll get a competitive annual percentage yield (APY), pay zero account fees, and enjoy an array of rewards, such as access to the Allpoint Network of 55,000+ fee-free ATMs globally. Qualifying accounts can even access their paycheck up to two days early.

FAQ

How do you manage the emotional impact of getting laid off?

Getting laid off or fired from your job is a tough challenge. You may feel angry and ashamed. Acknowledge those feelings, and remind yourself that millions of others have navigated this situation. You are not alone. Also, taking action can foster feelings of control and personal agency. Updating your resume, networking, reworking your budget, and engaging in self care rituals (like exercise) may also be positive steps.

How do you recover after being laid off?

Recognize the shock and upsetting feelings that you are likely experiencing. Then, take steps to improve your situation: Seek unemployment benefits, apply for jobs, start a side hustle, cut some expenses, and perhaps volunteer to build new skills and fill free time. These moves can help you move forward from your job loss.

Is it better to be fired or laid off?

In both scenarios, you don’t have a job, but if you are fired, it is typically due to a performance issue. With a layoff, you will likely be able to file for unemployment and you may receive severance pay from your employer. When you are fired, you may or may not be able to receive unemployment funds and you will probably not be eligible for severance.

Photo credit: iStock/skynesher

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As an alternative to direct deposit, SoFi members with Qualifying Deposits can earn 4.00% APY on savings balances (including Vaults) and 0.50% APY on checking balances. Qualifying Deposits means one or more deposits that, in the aggregate, are equal to or greater than $5,000 to an account holder’s SoFi Checking and Savings account (“Qualifying Deposits”) during a 30-day Evaluation Period (as defined below). Qualifying Deposits only include those deposits from the following eligible sources: (i) ACH transfers, (ii) inbound wire transfers, (iii) peer-to-peer transfers (i.e., external transfers from PayPal, Venmo, etc. and internal peer-to-peer transfers from a SoFi account belonging to another account holder), (iv) check deposits, (v) instant funding to your SoFi Bank Debit Card, (vi) push payments to your SoFi Bank Debit Card, and (vii) cash deposits. Qualifying Deposits do not include: (i) transfers between an account holder’s Checking account, Savings account, and/or Vaults; (ii) interest payments; (iii) bonuses issued by SoFi Bank or its affiliates; or (iv) credits, reversals, and refunds from SoFi Bank, N.A. (“SoFi Bank”) or from a merchant. SoFi members with Qualifying Deposits are not eligible for other SoFi Plus benefits.

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Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

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