Lowest Score to Be Considered Fair Credit

When negatives prevent your credit score from entering into the excellent range, you at least want "fair" credit or you may not qualify for a loan at reasonable terms. The lowest score in the fair range constantly changes and even if you have fair credit with one bureau you could have terrible -- or excellent -- credit at another.

Identification

As of 2011, most lenders consider fair credit any score in the range of 620 to 659, according to the BCS Alliance. Changes in the state of the lending industry, which often follow the overall economy, can tighten lending standards. After the credit crisis of 2008 some lenders moved their "fair" credit tier up to a minimum of 675.

Considerations

A score of 620 is usually the lowest score you can have to qualify for a loan with a typical bank in any lending environment, but this does not mean you get a low rate on a loan. Only scores in the top tier get the prime rate. As of 2011, this is usually a score of at least 750 to 760. Low interest rates on a loan mean you pay hundreds or even thousands less over the course of the loan.

Variance

It always pays to shop around for the best rate on a mortgage or car loan because lenders can consider scores lower than 620 to be "fair" and the FICO scoring models counts all applications for these loans in a 45-day period a single inquiry. The Federal Housing Administration, for instance, tends to have very low credit score requirements. In 2011, it accepted applications from borrowers with scores as low as 580. Also, most borrowers have different scores from all three major credit bureaus because of variation in reporting standards and missing some items. Lenders usually standardize the variance in scores by taking the middle score or averaging all three.

Tip

If you have a score that falls into the fair range you probably have a few negative items or too much debt dragging it down. Get your free credit reports from all three agencies via AnnualCreditReport. The reports will contain tips on your weaknesses as a borrower and dissect your outstanding debts. Pay off as much credit card debt as possible, but make sure you never pay less than the minimum on any account.