Having a credit score of 650 is not ideal, but it's far from bad. It's in the “fair range” according to FICO and VantageScore, the two main scoring models used in the US. With a credit rating of 650, you should be able to get a credit card or loan, but you won't have access to the best options. To improve your credit score, you need to take some steps and strategies.
The most important factors that affect your credit score are payment history and credit utilization. Payment history is the record of how you have paid your bills in the past, while credit utilization is the ratio of how much you have spent on your credit card to the card limit. To improve your credit score, you should pay your bills in full and on time, and reduce your credit utilization rate. If you don't have a credit card, another way to establish credit is to have an installment loan.
However, taking out a loan is generally not recommended unless you really need it. A secured credit card is always your best option if your primary goal is to increase your credit. Credit reports for individuals with fair credit scores often list late payments (30 days or more in arrears) and collection accounts. If that happens, there will be a write-off or collection account, seriously damaging your credit rating.
To repair your credit, you need to correct the behaviors that led to those events and work steadily to improve your score. It's possible to reach (and even exceed) the good credit score range with a little work. This could mean having access to a wider variety of credits and loans with better interest rates. Credit Sesame members were able to improve their score in three, six months and 12 months using some of these strategies. Ultimately, the time it will take to repair your credit depends on your credit history, personal finances, and the decisions you make.
Meeting with a credit counselor (not a credit repair company) can give you some new tools to increase your credit. As long as you continue to make timely payments, your credit score usually recovers quickly from the effects of difficult inquiries.