637 Credit Score: What Does It Mean? and Is It a Good or Bad Credit Score?
There’s no getting around it: credit scores are hugely important.
A credit score demonstrates to banks and credit lenders—those who have the power to lend you money for auto loans, home mortgages, and credit for smaller-scale, everyday things—how financially responsible you are. And the higher your credit score, the better it is for you and your quality of life.
But what does having a 637 credit score mean, exactly? How will it impact your life? And are there ways to improve upon that score?
In this Grow Credit post, we’ll explore the 637 credit score in detail—a specific score that many people, especially younger folks like Gen Z (around 40.9% according to Credit Karma) and Millennials (around 43.5%), will be close to or may even have themselves.
By reading through, you’ll discover if 637 is an objectively good or bad credit score, why people end up with such a score in the first place, what you can and can’t do with a 637 or similar credit score, and how to improve it going forward.
Sound good?
Good.
Just read through the following sections:
Is 637 a good or bad credit score?
What causes a 637 credit score?
What you can and can’t do with a 637 credit score
Quick tips to improve a 637 credit score
How you can easily build and improve your credit score with Grow Credit
Now, let’s dive straight in.
Is 637 a good or bad credit score?
A 637 credit score on the FICO score scale is defined as “fair.” However, this “fair” score is nearly 100 points below the U.S. national average credit score of 711.
This means, then, that a 637 isn’t bad per se—it isn’t in the “poor” category, which is the bottom category for those just building a credit history or those who are facing credit difficulties—but it certainly isn’t in the higher and objectively better FICO categories, either: the “good,” “very good,” and “excellent/exceptional” categories.
A swathe of banks and credit lenders simply won’t do business with applicants who are a part of the “fair” category, as it’s perceived as rather risky—in their view, the applicant is either not so great with handling their available credit, or they’re young and don’t have sufficient experience with using credit responsibly. Inevitably, this makes getting loans particularly tricky for “fair”-scoring applicants. And, generally speaking, if you’re able to clinch a loan as a “fair”-scoring applicant, the loan itself could very well be subject to higher-than-normal costs.
TL;DR: A 637 credit score is so-so, and to have more financial flexibility, you’ll want to climb up the FICO categories as high as possible.
What causes a 637 credit score?
Your credit score is the reflection of how well (or how badly) you’ve handled the credit you’ve been lent.
If you’re currently on or near a credit score of 637, this could mean that:
You haven’t paid bills on time, every time. Not paying bills on time—and not paying bills at all—dramatically affects your credit score, and the longer you take to pay a bill after its deadline, the more your credit score will be negatively affected. It pays to pay bills on time!
You’ve used too much credit. It’s not a good idea to use the bulk of the credit that’s been given to you: doing so could seem like you’re financially in over your head. That’s why it’s recommended that you utilize 30% or below of your available credit.
You don’t have an established credit history. When looking at the stats, it’s evident that people in older generations have better credit scores. That’s because they’ve simply been alive longer, and have had more time to use more and more credit, pay it all back, and show lenders that they’re responsible. Younger folks usually won’t have that opportunity until they, too, get older—which means a 637 credit score or similar might not necessarily be due to any fault of your own, but rather, it’s because of a lack of credit history.
You’ve opened too many new lines of credit in a short amount of time. This usually signifies that somebody has recently come against hard circumstances, such as a job loss or a divorce, where a larger sum of money is needed quickly. And while having multiple lines of credit isn’t unusual—in fact, it’s the norm—opening up numerous credit lines within a short space impacts credit scores for the worse.
You’re not handling multiple types of credit. An account mix (e.g. having revolving credit and installment credit) shows you’re capable of handling different kinds of credit, which banks and lenders like to see. However, it may be harder to achieve a good account mix when you’re at a score like 637: you may need to clinch a higher credit score and be in the “good” FICO score category before you’re eligible to be approved for installment credit.
However, not everything affects your credit score. For instance, these things do not have a direct influence on your credit score:
Employment history
Monthly income
Child support payments
Marriage and relationship status
Geographical location
While they may make things like applying for credit or larger credit sums easier (or harder), when it comes to your credit score specifically, it’s more related to your own, individual actions. Ergo: your credit score is all about you using credit sensibly.
To learn more about credit scores in general, including a percentage breakdown of how certain actions can negatively impact your overall credit score, check out our previous article What Credit Score Do You Start With? (Plus 5 Tips to Build a Healthy Credit Score!).
With a deepened understanding of what a 637 credit score is and how you might’ve ended up with that score or one close to it, it’s time to look at how a “fair” score places limitations on you.
What you can and can’t do with a 637 credit score
It’s fair to say that a “fair” credit score makes life a little harder. Sure, you don’t have the worst credit score possible which does open your options slightly, but it’s also simply not high enough to take advantage of good (read: without super-high interest rates) loans for things like cars and homes.
So, here’s a rundown of what can and can’t be done with a credit score of 637.
Getting an auto loan with a 637 credit score
Qualifying for an auto loan—that is, being loaned the money to purchase a car as opposed to renting or hiring a car for a day or two—can be difficult with a credit score of 637 or similar. Because, while there isn’t technically a minimum credit score needed to qualify, the low score may not instill enough confidence in a lender to approve your application.
It’s possible to still get a loan with such a credit score, though, if you’re able to co-sign with a member of your family or partner, for instance. But if you’re wanting to do it solo and be solely responsible for loan repayments (which could be the safer option!), then naturally improving your credit score over time and then going back to the lender once you’ve jumped up a FICO category or two is the best bet.
Getting a home loan with a 637 credit score
There’s no hard-and-fast credit score you need for securing home loan approval. However, if you’re in the “fair” category, expect that the mortgage loans you’re offered come with eye-wateringly high interest rates. And in an economy where it’s harder than ever to get on the property ladder—especially in cities and more densely populated areas—such high interest rates may mean doing yourself a major disservice financially.
Again, like with auto loans, improving your credit score first is the savviest way to go about home loans and mortgages.
Getting a personal loan with a 637 credit score
There’s a wider variety of personal loans available to you if you have a 637 credit score or similar—from payday loans to loans from established credit lenders. But, you guessed it: they come with caveats.
Payday loans are notoriously bad in the long-term, to the point where it’s safer not to go down the payday route at all. Similarly, many personal loans and credit cards—like with any possible home loans and auto loans that you can find—will have high interest rates attached (in addition to the origination fee).
The takeaway here, then, is that before applying for any kind of loan, it’s crucial to consider whether you need the loan right now. Could you hold out a few months to better your credit score, meaning you’ll be in the position to shop around for a better deal? If the answer is “yes,” then here are a few quick tips to help you get your credit score from “fair” to “good” and beyond.
Quick tips to improve a 637 credit score
According to Experian, 74% of people in the U.S. have a credit score that’s higher than 637. Upon hearing this, you may feel a little flat—the majority of folks in the country have a higher score. However, it should be reassuring: it shows that it’s definitely possible to rise through the ranks of the FICO score categories.
Here are some quick pointers to start you off on your journey of bettering your 637 or similar credit score:
Ensure bills are always paid on time—and pay any outstanding bills ASAP. Seeing as the sooner you pay your bills, the better, ensure bills are always paid on time (or even ahead of time if possible!). If there are any outstanding payments—like that electricity bill you keep consciously or unconsciously putting off—get it sorted as soon as you’ve read this article.
Dispute errors and inaccuracies that appear on your credit report. Sometimes, errors and mistakes can show up on your credit report—like late bill payments that were in fact paid on time. These can be disputed, and the major credit bureaus in the U.S. can then rectify the issues, which will bump your score back up.
Improve your credit score efficiently and effectively with Grow Credit. There are initiatives out there—like Grow Credit—that can help people of newer generations, on top of those who have suboptimal credit scores, to rebuild their credit score and be a part of the 74% of U.S. people who have a higher score than 637. Specifically, with Grow Credit’s (free!) Mastercard, you can use the bills from Netflix, Hulu, and a range of other subscription services to your benefit.
Let’s discuss Grow Credit in a little more detail.
How you can easily build and improve your credit score with Grow Credit
Grow Credit enables U.S. residents to easily build and improve their credit over time. By paying off small-scale subscription bills through our free and virtual Grow Credit Mastercard, it’s simpler than ever to start your credit history off in the right way, and make sure that your credit score goes in the direction you need it to.
It doesn’t matter if you’ve already got lines of credit open, or if Grow Credit will be your first, though: as long as payments are made in good time, Grow Credit will help your credit score—whatever it may be—to rise.
Check out this short explainer video on how Grow Credit works in action.
Ready to apply for a Grow Credit Mastercard yourself?
It’ll take mere minutes if you have the following:
A bank account (that’s been open for at least 60 days)
An email address
A phone number
An SSN (social security number)
A physical U.S. address and resident status
A minimum income of $1,200 per month (for at least 2 months)
An account balance of at least $100
And age 18+
Apply via our iOS and Android apps, or through our website now! And for those who want to completely take control of their credit score, we offer two premium plans (the Grow Membership, $4.99 /mo, and the Accelerate Membership, $9.99 /mo). Read more about our plans here.
It’s time to grow with Grow Credit.