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Fact Checked
Update date 07.04.2025
With a credit score of 650, which is fair, borrowers can still get loans. However, the terms may not be as good as those for higher scores. These loans can help with buying a home or car, paying for education, or consolidating debt. Approval and terms depend on the credit score, income, job history, and debt-to-income ratio. These factors affect loan amounts, interest rates, and repayment periods. While loans are available, borrowers may face stricter terms, higher interest rates, or limits on how much they can borrow. Missing payments can also hurt future credit opportunities.
Requirements and Conditions
Requirements
You must be at least 18 or 19 years old, depending on where you live.
You need a valid government-issued photo ID to prove your identity.
You may need proof of residence to confirm your current address and personal details.
You usually need proof of income, like pay stubs or bank statements, to show you can repay.
Lenders prefer applicants with a stable job history and reliable income sources.
They may check your debt-to-income ratio to see if it meets their standards.
Some lenders might ask for credit counseling before they approve your loan.
Conditions
Interest rates may be higher if you have a fair credit score and a higher lending risk.
Loan amounts depend on your income, debt, and the lender’s rules.
Repayment terms can range from a few months to several years.
Origination fees and other charges may apply, raising the total loan cost.
A soft or hard credit check may happen during the application process.
Collateral may be needed based on the type of loan.
Insurance may be required for certain secured loans, like auto or home loans.
How you can use the funds may be limited by the lender’s terms.
Loan availability can vary based on your province or territory.
Lenders may ask for documents that support how you plan to use the loan, especially for larger amounts.
Loans for people with fair credit scores, around 650, are important for financial inclusivity. These scores may not be great, but they show many people are managing their finances. Lenders who see the value in fair credit scores help make credit available to more people. This access allows for goals like buying a home or getting an education. Providing customized loan options shows support for these individuals and helps create a fairer financial system. It is important to push for equal access to financial resources and improve loan options for those with fair credit scores.
FAQ
What does it mean to have a 650 credit score?
Having a 650 credit score suggests a moderate credit standing. This score, typically categorized as fair, reflects an individual's creditworthiness based on their credit history. A 650 credit score indicates a mix of both positive and negative elements in the credit report. While it may not qualify as excellent, it is generally high enough to make individuals eligible for various credit accounts and loans. However, the terms and interest rates for loans at the 650 credit score level may not be as favorable as those available to individuals with higher credit scores. Individuals in this range need to be mindful of managing their credit responsibly to improve their scores over time and access better financial opportunities.
What is a bad credit score in Canada?
In Canada, credit scores range from 300 to 900, and a score below 560 is generally viewed as poor by many lenders. Having a low score can make it harder to qualify for credit or secure favorable terms like low interest rates. However, a bad credit score isn’t permanent. You can start improving it by making consistent on-time payments and keeping your credit balances low compared to your limits. Over time, responsible credit use can help you rebuild your score and expand your financial options.
