Jelena Stanojkovic / Getty Images
Fact checked by Brendan HarknessFact checked by Brendan Harkness
What Is a Fair Credit Score?
A fair credit score falls from 580 to 669 on the FICO score range or 601 to 660 on the VantageScore range (though VantageScore calls this “near prime”). This credit score tier sits above poor credit and below good credit.
The fair credit score range is also well below the average credit score among Americans, which is 717, according to a FICO report from October 2023, the most recent data available.
Having a fair credit score can make it challenging to qualify for competitive rates on loans, among other difficulties. However, you can take steps to improve your score and push it into the good range (or higher).
Key Takeaways
A fair credit score is a FICO score of 580 to 669 or a VantageScore of 601 to 660.Fair credit can indicate to lenders that you’ve had trouble managing money in the past and can make it difficult to qualify for a loan or access competitive interest rates.There are steps you can take to improve a fair credit score, including paying your bills on time and reducing your credit utilization.You can check your credit score through any one of a variety of credit monitoring services, and if you need help coming back from past mistakes you can hire a credit repair company.
FICO vs. VantageScore
A fair credit score falls from 580 to 669 on the FICO range and from 601 to 660 on the VantageScore range (VantageScore calls this tier “near prime”).
The most common models of FICO credit scores range from 300 to 850 and fall into five categories:
Credit Score Tier
FICO Score Range
Exceptional
800–850
Very good
740–799
Good
670–739
Fair
580–669
Poor
300–579
VantageScores have the same overall range of 300 to 850 but are grouped into four categories:
Credit Tier
VantageScore Range
Super prime
781–850
Prime
661–780
Near prime
601–660
Subprime
300–600
Either way, a “fair” or “near prime” credit score can limit your borrowing options. You might need to enlist a co-signer to get approved for a loan and may have limited options when it comes to credit cards. Even if a lender approves your application for credit, you could end up with a smaller loan amount, higher interest rates, and more fees than someone with good or excellent credit.
For example, here are the interest rates for new and used car loans by VantageScore tier, according to Experian’s State of the Automotive Finance Market Q2 2024 report. Near prime (fair) credit leads to interest rates nearly twice as high as those assigned to borrowers with super prime credit.
Credit Score Tier
Average Interest Rate for New Car Loans
Average Interest Rate for Used Car Loans
Super prime
5.25%
7.13%
Prime
6.87%
9.36%
Near prime
9.83%
13.92%
Subprime
13.18%
18.86%
Deep subprime
15.77%
21.55%
Reasons for a Fair Credit Score
A fair credit score can make lenders wary of approving you for credit, as it indicates you may have fallen behind on payments or had financial troubles in the past. There are several reasons why your credit score could have fallen into the fair range, such as:
Late or missed payments on loans, credit cards, or utility billsAn account that went to collectionsHigh credit utilization, i.e., carrying high balances on your credit cards A short credit history or limited credit accounts Lots of hard credit inquiries in a short period of time
If none of the above apply, you could also see damage to your credit score due to mistakes on your credit reports. If you find errors on your reports, dispute them with the credit bureaus to have them removed.
Important
An unexpected drop in your credit score could also be a sign of identity theft, which can drag down your credit score and harm your finances.
How a Higher Credit Score Can Help You
A higher credit score can open the door to a variety of financial opportunities. Here are some of the benefits of a good credit score.
Easier to get approved for loans: Lenders look favorably on good credit and will be more likely to approve your application for a loan or line of credit. Better interest rates: You’ll also typically get better rates, which could significantly lower the cost of borrowing money. Access to rewards credit cards: A higher credit score can help provide access to valuable credit cards that offer perks like travel rewards and cash back. Increased loan amounts and credit limits: Since lenders see strong credit as less risky, they may be willing to offer you higher loan amounts or increase your credit limit. Fewer hoops to jump through: You may have an easier time accessing unsecured credit, whereas someone with weak credit may need to provide collateral or a co-signer to get approved. Better chance of being approved for a rental home: Some landlords run a credit check when considering your application, and a higher score could make you a more appealing candidate. Lower insurance premiums: Insurance providers consider your credit as a factor when determining your home and car insurance premiums in states where this is allowed. No utility security deposits: Some utility companies, such as for gas, electricity, and water, may require a security deposit if you have poor or fair credit.
How to Improve a Fair Credit Score
Given all the benefits of good credit, it’s worth putting in the effort to improve a fair credit score. Although you can do any of the following yourself, you can also hire a credit repair company to help. Some steps you can take include:
Make on-time payments on your bills: Your payment history has a big impact on your credit score. In fact, it makes up 35% of your FICO score.Pay down your credit card balances: This strategy can reduce your credit utilization, which can have a positive impact on your score.Request a credit limit increase: Increasing your credit limit can also reduce your credit utilization, as long as you don’t start spending more. Contact your credit card companies or check your online dashboards to see if this is an option.Avoid too many hard credit inquiries at once: If you’re applying for a loan, such as a mortgage, try to keep your applications within a short window. Lots of hard credit checks can ding your score, but multiple inquiries clustered in a short period of time are counted as only one inquiry for scoring purposes.Keep your old accounts open: Avoid closing old credit accounts that are in good standing so you don’t reduce your available credit and increase your utilization. And if you close a credit account, eventually it’ll fall off your credit reports and potentially shorten the average age of your credit history, which can damage your score.Check your credit report for errors: Review a free copy of your credit reports at AnnualCreditReport.com for any mistakes (or use a credit monitoring service). If you spot any, submit a dispute with the credit bureaus.
Frequently Asked Questions (FAQs)
Why Did My Credit Score Drop From Good to Fair?
There are several reasons why your credit score may have dropped from good to fair, such as missing payments on your debts, a high credit utilization ratio, or lots of hard credit inquiries in a short period of time.
A drop in your credit score could also be the result of errors or identity theft, so it’s a good idea to check your credit reports right away.
Can I Get a Credit Card With Fair Credit?
You can qualify for some credit cards with fair credit, but you may face higher interest rates and limited credit limits. You also may not qualify for the best rewards cards with a score in the fair range.
How Long Does It Take to Improve My Credit Score?
The amount of time it takes to improve your credit score depends on your individual situation, including your record of past mistakes, if any, and the steps you take. It may take a few months or years to see a significant improvement in your score. Some things, like paying off credit cards to reduce utilization, can have a very rapid effect on your scores, while others, like building up a positive payment history, can take much longer.
What’s a Good Credit Score for My Age?
According to Experian data from 2023, the average credit scores by age are:
Gen Z (ages 18–26): 680Millennials (27–42): 690Gen X (43–58): 709Baby boomers (59–77): 745Silent Generation (78+): 760
A good credit score for people of all ages starts at 670 in the FICO scoring model.
How Many People Have Exceptional Credit Scores?
Nearly 22% of American consumers have exceptional credit scores of 800 or higher, according to 2023 data from Experian.
What’s the Difference Between FICO Scores and VantageScores?
Both FICO scores and VantageScores use the information on your credit reports to assign you a credit score between 300 and 850. However, the scoring models are unique and consider the impact of specific factors, such as payment history and credit utilization, somewhat differently. For example, payment history makes up 35% of your FICO score but 41% of your VantageScore.
FICO says its scores are used in 90% of lending decisions.
The Bottom Line
Fair credit is better than poor credit, but it can still make it challenging to qualify for a loan or access competitive interest rates. If your credit score falls into the fair range, there are steps you can take to increase it, such as paying your bills on time and reducing your credit utilization. Although you can’t fix your credit overnight, taking consistent action should help you see a net improvement over time. And if necessary, there are credit repair companies available to help.
Read the original article on Investopedia.
Jelena Stanojkovic / Getty Images
Fact checked by Brendan HarknessFact checked by Brendan HarknessWhat Is a Fair Credit Score?A fair credit score falls from 580 to 669 on the FICO score range or 601 to 660 on the VantageScore range (though VantageScore calls this “near prime”). This credit score tier sits above poor credit and below good credit. The fair credit score range is also well below the average credit score among Americans, which is 717, according to a FICO report from October 2023, the most recent data available. Having a fair credit score can make it challenging to qualify for competitive rates on loans, among other difficulties. However, you can take steps to improve your score and push it into the good range (or higher).
Key TakeawaysA fair credit score is a FICO score of 580 to 669 or a VantageScore of 601 to 660.Fair credit can indicate to lenders that you’ve had trouble managing money in the past and can make it difficult to qualify for a loan or access competitive interest rates.There are steps you can take to improve a fair credit score, including paying your bills on time and reducing your credit utilization.You can check your credit score through any one of a variety of credit monitoring services, and if you need help coming back from past mistakes you can hire a credit repair company.
FICO vs. VantageScoreA fair credit score falls from 580 to 669 on the FICO range and from 601 to 660 on the VantageScore range (VantageScore calls this tier “near prime”).The most common models of FICO credit scores range from 300 to 850 and fall into five categories:
Credit Score Tier
FICO Score Range
Exceptional
800–850
Very good
740–799
Good
670–739
Fair
580–669
Poor
300–579
VantageScores have the same overall range of 300 to 850 but are grouped into four categories:
Credit Tier
VantageScore Range
Super prime
781–850
Prime
661–780
Near prime
601–660
Subprime
300–600
Either way, a “fair” or “near prime” credit score can limit your borrowing options. You might need to enlist a co-signer to get approved for a loan and may have limited options when it comes to credit cards. Even if a lender approves your application for credit, you could end up with a smaller loan amount, higher interest rates, and more fees than someone with good or excellent credit. For example, here are the interest rates for new and used car loans by VantageScore tier, according to Experian’s State of the Automotive Finance Market Q2 2024 report. Near prime (fair) credit leads to interest rates nearly twice as high as those assigned to borrowers with super prime credit.
Credit Score Tier
Average Interest Rate for New Car Loans
Average Interest Rate for Used Car Loans
Super prime
5.25%
7.13%
Prime
6.87%
9.36%
Near prime
9.83%
13.92%
Subprime
13.18%
18.86%
Deep subprime
15.77%
21.55%
Reasons for a Fair Credit ScoreA fair credit score can make lenders wary of approving you for credit, as it indicates you may have fallen behind on payments or had financial troubles in the past. There are several reasons why your credit score could have fallen into the fair range, such as:Late or missed payments on loans, credit cards, or utility billsAn account that went to collectionsHigh credit utilization, i.e., carrying high balances on your credit cards A short credit history or limited credit accounts Lots of hard credit inquiries in a short period of time If none of the above apply, you could also see damage to your credit score due to mistakes on your credit reports. If you find errors on your reports, dispute them with the credit bureaus to have them removed.
ImportantAn unexpected drop in your credit score could also be a sign of identity theft, which can drag down your credit score and harm your finances.
How a Higher Credit Score Can Help YouA higher credit score can open the door to a variety of financial opportunities. Here are some of the benefits of a good credit score.Easier to get approved for loans: Lenders look favorably on good credit and will be more likely to approve your application for a loan or line of credit. Better interest rates: You’ll also typically get better rates, which could significantly lower the cost of borrowing money. Access to rewards credit cards: A higher credit score can help provide access to valuable credit cards that offer perks like travel rewards and cash back. Increased loan amounts and credit limits: Since lenders see strong credit as less risky, they may be willing to offer you higher loan amounts or increase your credit limit. Fewer hoops to jump through: You may have an easier time accessing unsecured credit, whereas someone with weak credit may need to provide collateral or a co-signer to get approved. Better chance of being approved for a rental home: Some landlords run a credit check when considering your application, and a higher score could make you a more appealing candidate. Lower insurance premiums: Insurance providers consider your credit as a factor when determining your home and car insurance premiums in states where this is allowed. No utility security deposits: Some utility companies, such as for gas, electricity, and water, may require a security deposit if you have poor or fair credit. How to Improve a Fair Credit ScoreGiven all the benefits of good credit, it’s worth putting in the effort to improve a fair credit score. Although you can do any of the following yourself, you can also hire a credit repair company to help. Some steps you can take include:Make on-time payments on your bills: Your payment history has a big impact on your credit score. In fact, it makes up 35% of your FICO score.Pay down your credit card balances: This strategy can reduce your credit utilization, which can have a positive impact on your score.Request a credit limit increase: Increasing your credit limit can also reduce your credit utilization, as long as you don’t start spending more. Contact your credit card companies or check your online dashboards to see if this is an option.Avoid too many hard credit inquiries at once: If you’re applying for a loan, such as a mortgage, try to keep your applications within a short window. Lots of hard credit checks can ding your score, but multiple inquiries clustered in a short period of time are counted as only one inquiry for scoring purposes.Keep your old accounts open: Avoid closing old credit accounts that are in good standing so you don’t reduce your available credit and increase your utilization. And if you close a credit account, eventually it’ll fall off your credit reports and potentially shorten the average age of your credit history, which can damage your score.Check your credit report for errors: Review a free copy of your credit reports at AnnualCreditReport.com for any mistakes (or use a credit monitoring service). If you spot any, submit a dispute with the credit bureaus.Frequently Asked Questions (FAQs)
Why Did My Credit Score Drop From Good to Fair?
There are several reasons why your credit score may have dropped from good to fair, such as missing payments on your debts, a high credit utilization ratio, or lots of hard credit inquiries in a short period of time.A drop in your credit score could also be the result of errors or identity theft, so it’s a good idea to check your credit reports right away.
Can I Get a Credit Card With Fair Credit?
You can qualify for some credit cards with fair credit, but you may face higher interest rates and limited credit limits. You also may not qualify for the best rewards cards with a score in the fair range.
How Long Does It Take to Improve My Credit Score?
The amount of time it takes to improve your credit score depends on your individual situation, including your record of past mistakes, if any, and the steps you take. It may take a few months or years to see a significant improvement in your score. Some things, like paying off credit cards to reduce utilization, can have a very rapid effect on your scores, while others, like building up a positive payment history, can take much longer.
What’s a Good Credit Score for My Age?
According to Experian data from 2023, the average credit scores by age are: Gen Z (ages 18–26): 680Millennials (27–42): 690Gen X (43–58): 709Baby boomers (59–77): 745Silent Generation (78+): 760A good credit score for people of all ages starts at 670 in the FICO scoring model.
How Many People Have Exceptional Credit Scores?
Nearly 22% of American consumers have exceptional credit scores of 800 or higher, according to 2023 data from Experian.
What’s the Difference Between FICO Scores and VantageScores?
Both FICO scores and VantageScores use the information on your credit reports to assign you a credit score between 300 and 850. However, the scoring models are unique and consider the impact of specific factors, such as payment history and credit utilization, somewhat differently. For example, payment history makes up 35% of your FICO score but 41% of your VantageScore.FICO says its scores are used in 90% of lending decisions.The Bottom LineFair credit is better than poor credit, but it can still make it challenging to qualify for a loan or access competitive interest rates. If your credit score falls into the fair range, there are steps you can take to increase it, such as paying your bills on time and reducing your credit utilization. Although you can’t fix your credit overnight, taking consistent action should help you see a net improvement over time. And if necessary, there are credit repair companies available to help. Read the original article on Investopedia.
Amazon.com: Its Role in the U.S. Industry
Introduction
Amazon.com, often simply referred to as Amazon, has transformed from an online bookstore into a colossal global conglomerate that has fundamentally altered the landscape of retail, technology, and numerous other industries. Founded in 1994 by Jeff Bezos, Amazon’s rapid growth and diversification have made it a central player in the U.S. economy. Its impact is felt across various sectors, including e-commerce, logistics, cloud computing, entertainment, and even artificial intelligence. This article explores Amazon’s role in the U.S. industry, examining its influence, achievements, and the challenges it faces.
The Rise of Amazon.com
Origins and Early Growth
Amazon began as an online bookstore in Bezos’s garage in Bellevue, Washington. The vision was simple but revolutionary: to create an online platform where people could buy books. Bezos recognized the potential of the internet to disrupt traditional retail and chose books as his starting point due to their wide appeal and ease of distribution. By offering a vast selection and competitive prices, Amazon quickly gained a foothold in the market.
The company’s initial public offering (IPO) in 1997 marked the beginning of its journey toward becoming a dominant player in the U.S. and global markets. Amazon’s early success was driven by its focus on customer satisfaction, an extensive inventory, and a commitment to fast and reliable delivery. This focus laid the foundation for its expansion into other product categories and services.
Diversification and Expansion
Amazon’s diversification strategy began with the introduction of new product categories, such as electronics, toys, and apparel. This move positioned Amazon as a one-stop shop for consumers, significantly expanding its customer base. The company also introduced its marketplace platform, allowing third-party sellers to offer their products alongside Amazon’s own inventory. This not only increased the variety of products available but also created a new revenue stream for the company through commissions on sales.
One of the most significant milestones in Amazon’s diversification was the launch of Amazon Web Services (AWS) in 2006. AWS provided cloud computing services to businesses, enabling them to rent computing power and storage rather than investing in expensive infrastructure. This service quickly became a cornerstone of Amazon’s business, contributing significantly to its profitability and establishing Amazon as a leader in the tech industry.
Amazon’s Role in E-Commerce
Transforming Retail
Amazon’s impact on the retail industry cannot be overstated. It has revolutionized the way consumers shop, shifting much of retail activity from brick-and-mortar stores to online platforms. The convenience of shopping from home, coupled with Amazon’s vast selection and competitive pricing, has led to a fundamental change in consumer behavior. This shift has forced traditional retailers to adapt, leading to the rise of omnichannel strategies that integrate online and offline sales.
The concept of “one-click shopping,” patented by Amazon in 1999, further streamlined the online shopping experience. This innovation reduced the friction in the purchasing process, contributing to higher conversion rates and reinforcing Amazon’s dominance in e-commerce. Additionally, Amazon Prime, launched in 2005, offered customers free two-day shipping and other benefits for an annual fee, further solidifying customer loyalty and increasing the frequency of purchases.
Impact on Small Businesses
While Amazon has provided opportunities for small businesses through its marketplace platform, it has also posed challenges. On the one hand, small businesses gain access to a vast customer base and the logistics infrastructure that Amazon offers. On the other hand, they face intense competition, not only from other third-party sellers but also from Amazon itself. The company’s ability to undercut prices and its control over the marketplace platform have led to concerns about fairness and market power.
Moreover, Amazon’s algorithms and data-driven approach to retail have raised questions about the transparency of how products are promoted and priced on the platform. Small businesses often struggle to achieve visibility without spending on Amazon’s advertising services, which can be costly. Despite these challenges, many small businesses continue to rely on Amazon as a vital sales channel, underscoring its central role in the U.S. retail industry.
Amazon in the Logistics and Supply Chain Industry
Revolutionizing Logistics
Amazon’s impact extends beyond retail into logistics and supply chain management. To fulfill its promise of fast and reliable delivery, Amazon has invested heavily in building a sophisticated logistics network. This network includes a vast network of fulfillment centers, advanced robotics, and a growing fleet of delivery vehicles, including drones.
Amazon’s logistics capabilities have set new standards for the industry. The company has pushed the boundaries of what is possible in terms of speed and efficiency, challenging traditional logistics providers like FedEx and UPS. Amazon’s commitment to customer satisfaction has driven innovations such as same-day and even one-hour delivery in select areas, further raising consumer expectations.
In-House Logistics Services
In recent years, Amazon has taken steps to reduce its reliance on third-party logistics providers by expanding its in-house delivery capabilities. The launch of Amazon Logistics, a service that uses independent contractors to deliver packages, is a testament to this strategy. This move has enabled Amazon to exert greater control over the delivery process and reduce costs.
However, this expansion has not been without controversy. Amazon’s use of independent contractors has sparked debates about labor practices and the gig economy. Critics argue that Amazon’s business model places financial and physical burdens on its delivery drivers, who are often classified as independent contractors rather than employees. This classification exempts Amazon from providing benefits and protections typically afforded to employees, such as health insurance and minimum wage guarantees.
Amazon Web Services: The Backbone of the Internet
Dominating Cloud Computing
Amazon Web Services (AWS) has emerged as one of the most significant contributors to Amazon’s success. As the leading provider of cloud computing services, AWS powers a vast portion of the internet, supporting everything from startups to large enterprises. Its services include computing power, storage, databases, machine learning, and more.
AWS’s dominance in cloud computing has had a profound impact on the tech industry. By providing scalable and cost-effective solutions, AWS has lowered the barriers to entry for new businesses, fostering innovation and entrepreneurship. Companies no longer need to invest heavily in physical infrastructure; instead, they can rent the necessary resources on demand from AWS.
Economic Impact and Innovation
The success of AWS has not only boosted Amazon’s financial performance but also contributed to the broader U.S. economy. AWS has created jobs, driven innovation, and supported the growth of numerous tech companies. Its services have become integral to the operations of many businesses, from streaming services like Netflix to financial institutions and government agencies.
AWS’s role in advancing technologies such as artificial intelligence and machine learning has also been significant. By making these technologies accessible through cloud services, AWS has enabled companies to develop new applications and services that were previously out of reach. This has spurred growth in sectors such as healthcare, finance, and entertainment.
Amazon’s Influence on Entertainment and Media
Amazon Studios and Prime Video
Amazon’s foray into the entertainment industry began with the launch of Amazon Studios and Prime Video. These platforms have become key players in the streaming wars, competing with giants like Netflix, Disney+, and HBO Max. Amazon Studios produces original content, including critically acclaimed series like The Marvelous Mrs. Maisel and The Boys, as well as feature films.
Prime Video, available as part of the Amazon Prime membership, has become a major driver of subscriber growth. By offering a mix of original content and licensed programming, Amazon has been able to attract a diverse audience. The company’s investment in high-quality content has not only boosted its streaming service but also positioned it as a significant player in Hollywood.
Impact on the Publishing Industry
Amazon’s origins as an online bookstore continue to influence the publishing industry. The company has become the largest bookseller in the world, both in physical books and e-books. The Kindle, Amazon’s e-reader, revolutionized the way people consume books, making digital reading mainstream.
However, Amazon’s dominance in the book market has raised concerns among publishers and authors. The company’s pricing strategies and negotiation tactics have led to disputes over revenue sharing and control. Amazon’s influence over the publishing industry extends to self-publishing, where its Kindle Direct Publishing platform allows authors to bypass traditional publishers and reach readers directly. While this has democratized publishing, it has also led to an oversaturation of the market and challenges in quality control.
Challenges and Criticisms
Regulatory Scrutiny
Amazon’s immense size and influence have made it a target for regulatory scrutiny. In the U.S. and abroad, lawmakers and regulators have raised concerns about the company’s market power, labor practices, and treatment of third-party sellers. Antitrust investigations have been launched to determine whether Amazon engages in anti-competitive behavior, such as favoring its own products over those of third-party sellers on its platform.
The company’s expansion into various industries has also led to concerns about its dominance and potential to stifle competition. Critics argue that Amazon’s control over data, logistics, and retail gives it an unfair advantage, making it difficult for smaller companies to compete. In response, there have been calls for greater regulation and even the potential breakup of Amazon into smaller entities.
Labor Practices and Workers’ Rights
Amazon’s labor practices have come under intense scrutiny, particularly in its fulfillment centers and delivery network. Reports of grueling working conditions, high injury rates, and inadequate breaks have sparked widespread criticism. Workers have organized protests and strikes, demanding better pay, safer working conditions, and the right to unionize.
The company’s use of technology to monitor and manage workers has also raised ethical concerns. Amazon’s reliance on algorithms to track productivity and enforce performance targets has been criticized for creating a dehumanizing work environment. The company’s resistance to unionization efforts has further fueled debates about workers’ rights and corporate responsibility.
Environmental Impact
As one of the largest companies in the world, Amazon’s environmental impact is significant. The company’s vast logistics network and rapid delivery services contribute to carbon emissions and packaging waste. Amazon has faced criticism for its role in driving consumerism and its contribution to environmental degradation.
In response, Amazon has pledged to become more sustainable. The company launched the Climate Pledge in 2019, committing to reach net-zero carbon emissions by 2040. Amazon has also invested in renewable energy, electric delivery vehicles, and sustainable packaging. While these efforts are a step in the right direction, critics argue that more needs to be done to address the environmental impact of the company’s operations.
