What is a fair credit score?

You can qualify for personal loans, mortgages, credit cards and other financial products with fair credit, but you likely won't receive the best interest rates or terms.

Lenders use your three-digit score to determine how likely you are to make on-time regular payments. The higher your credit score, the more likely you are to be approved.

Find out what qualifies as a fair credit score, where to get your score and how to improve it.

Credit scoring models come from two main companies, FICO and VantageScore. Both use a scale from 300 to 850, but they use different formulas and weights, meaning your score will often look different on each.

Lenders are more likely to utilize FICO models, which are used in 90% of lending decisions in the U.S.

FICO

According to FICO, a fair credit score is anything from 580 to 669. Below that is considered poor, while above it puts you in good-to-excellent territory.

• Excellent: 800 to 850
• Very good: 740 to 799
• Good: 670 to 739
• Fair: 580 to 669
• Poor: 300 to 579

VantageScore

VantageScore has a slightly different scale, with fair (or "near prime") considered anything between 601 and 660. Below that is poor or "subprime," while above 660 is good (prime) or excellent (superprime)

• Excellent/Superprime: 781 to 850
• Good/Prime: 661 to 780
• Fair/Near Prime: 601 to 660
• Poor/Subprime: 300 to 600

Credit scores are calculated differently depending on the model used.

FICO Score 8

Payment history (35%): How often you've made payments on time is the largest factor in calculating your credit score.

Credit utilization (30%): The amount of credit you're using versus your total credit limit across all accounts is the second largest factor in determining your score.

Length of credit history (15%): The average age of your accounts. (Older accounts signal you have more experience handling credit.)

New credit (10%): Many recent credit applications and new accounts can signal financial difficulty.

Credit mix (10%): Lenders look for borrowers with experience with different types of credit, including credit cards and personal loans.

VantageScore 3.0

Payment history (40%): Your record of making loan payments on time. Multiple late payments can hurt your score.

Depth of credit (21%): The age and variety of your accounts.

Credit utilization (20%): The percentage of your total credit limit you're using.

Balances (11%): Your total balance across all accounts.

Recent credit (5%): Newer inquiries and credit accounts can lower your score.

Available credit (3%): Your total credit limit across all accounts.

Both FICO and VantageScore have separate scoring formulas for different products, but FICO Score 8 is the industry standard, used for most credit cards, auto loans and personal loans.

In addition, the information used to generate your credit score comes from credit histories kept by one of the three credit bureaus — Experian, Equifax and TransUnion. Your exact score may also differ based on which bureau a lender uses.

You can still qualify for credit cards and loans with fair credit, but you may be hindered by higher interest rates. Fortunately, there are steps you can take to raise your credit score.

1. Make on-time payments in full

 Payment history is the largest factor in your credit score, so paying on time has the biggest positive impact on your score. (Setting up autopay can ensure you never miss a bill.) And, while it's essential to make at least your minimum payment every month, you should aim to pay your bill in full each to reduce your credit utilization ratio

2. Increase your credit limit

Your credit utilization ratio is the amount you owe across your accounts compared to your total available credit, expressed as a percentage. Paying down your bills is the best way to lower your ratio, but you can also ask your credit card company for a limit increase. The catch is, you can't tap that additional credit or you'll just slide deeper into debt.

3. Avoid applying for too many accounts

When you apply for credit, the lender will run a hard inquiry that will temporarily lower your credit score by about five points. A lot of inquiries in a row can add up, and suggest you are having trouble staying on top of your finances. You can usually prequalify without hurting your score and get insight into the cards or loans that you have the best chances of getting.

4. Check your credit report for errors

Review your credit reports with all three credit bureaus for any errors that could be negatively impacting you. You can get free copies at AnnualCreditReport.com.

Common mistakes include accounts listed as unpaid that have been successfully settled, individual loans listed multiple times, incorrect balances, debts that are incorrectly reported as being in collections and fraudulent accounts listed as a result of identity theft or fraud.

Disputing a credit report error may take time and effort, but it's worth it. You can also subscribe to a credit repair service, which will work to correct any mistakes or fraudulent items on your credit report.

Credit card issuers typically give members free access to their credit scores, although they rarely offer both FICO and VantageScore numbers from all three bureaus. Most credit monitoring or ID theft protection services offer VantageScore scores.

CreditWise from Capital One provides free FICO Score 8 from TransUnion, while *Experian Boost® delivers your Experian credit report and the FICO 8 score it generates.

A paid subscription to myFICO comes with access to your FICO scores from all three bureaus, including specialized versions used for mortgages and auto loans.

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At CNBC Select, our mission is to deliver high-quality service journalism and comprehensive consumer advice to our readers, enabling them to make informed financial decisions. Every credit score article is based on rigorous reporting by our team of expert writers and editors with extensive knowledge of credit monitoring products. While CNBC Select earns a commission from affiliate partners on many offers and links, we create all our content independently of our commercial team and any outside third parties, and we pride ourselves on maintaining high journalistic standards and ethics.

*Results may vary. Some may not see improved scores or approval odds. Not all lenders use Experian credit files, and not all lenders use scores impacted by Experian Boost.