What Can You Do With Fair Credit? Steps to Go From Fair to Excellent

Having fair credit might not prevent you from being approved for a loan, but it won’t unlock the best options. 

Knowing how to go from a fair to an excellent credit score can change your financial life.

Learn more about credit scores and how they can help you secure better loan terms, no matter your financial goals. 

What can you do with fair credit? 

Your credit score is more than a reflection of your borrowing habits. It influences the interest rates you receive, your chances of being approved for new credit, and the types of financial products you can access.

You’re not alone if your score falls in the “fair” range. Many homeowners start here. A fair credit score may still result in loan approvals, but with higher interest rates or limited product options. 

The key to improving is understanding what drives your score and how to shift it upward with targeted action.

Raising your credit score can expand your options, whether you’re hoping to refinance, tap into your home equity, qualify for better loan terms, or simply gain more financial breathing room. 

Know where your score stands

The first step is to understand what “fair” means in the world of credit scoring. 

Most lenders use the FICO® model, which ranks credit scores as follows:

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

Why improve credit from fair to excellent

If you’re in the fair range, you’re likely paying higher interest rates and may have trouble qualifying for premium credit offers. 

A score in the excellent range can get you lower rates, faster approvals, and higher credit limits.

Pull your credit reports

Your credit score is based on the details in your credit reports. That’s why reviewing them closely and addressing any mistakes is important.

You can request free reports once a year from each of the three major credit bureaus: TransUnion, Equifax, and Experian.

When you review your reports, look for:

• Incorrect names, addresses, or other personal information
• Accounts you don’t recognize
• Duplicate listings or outdated negative entries
• Late payments or balances that are misreported

Correcting inaccurate information, especially errors involving payment history or high balances, can improve your score.

Prioritize on-time payments

Your payment history is the single most important factor in your credit score. It accounts for about 35% of your overall score. 

Just one missed payment can cause a noticeable drop. If you’ve missed payments in the past, focus on creating a flawless payment track record moving forward. 

Over time, consistent on-time payments can rebuild your credibility and strengthen your score.

Reduce credit card balances

Another important element is credit utilization, or the amount of available credit you currently use. This makes up around 30% of your score. 

The goal is to keep your balances under 30% of your total credit limit, but lower is definitely better.

Strategies for reducing credit balances include:

• Making multiple payments throughout the month
• Applying windfalls or bonuses to credit balances
• Targeting high-interest cards first to maximize payoff momentum

Even if you don’t pay off your cards entirely, reducing balances can yield a fast and noticeable improvement.

Avoid unnecessary credit inquiries

Whenever you apply for credit, lenders perform a hard inquiry on your credit report, which can briefly lower your score.

While one or two inquiries won’t make much difference, multiple applications within a short time frame can raise red flags.

Be selective. Avoid opening new accounts just to access a promotion or discount. Instead, focus on managing your existing credit responsibly. 

For example, if you’re shopping for a home equity line of credit (HELOC), complete all applications within two weeks so they count as a single inquiry under most scoring models.

Keep older accounts open

The length of your credit history influences about 15% of your score. Lenders want to see a long-standing, stable relationship with credit.

If you have an older credit card you seldom use, avoid closing it too quickly, particularly if it doesn’t carry an annual fee. 

Keeping older accounts open helps preserve your average account age, which supports a higher score over time.

Use inactive cards for small recurring charges or occasional purchases to keep them active without accumulating debt.

Maintain a balanced credit mix

Your credit profile benefits from a healthy mix of account types. While this factor accounts for just 10% of your score, it can still play a role in achieving excellent credit.

Different credit types demonstrate how effectively you manage debt:

• Installment loans: mortgages, auto loans, student loans
• Revolving accounts: credit cards, lines of credit

You don’t need to open accounts just to diversify, but if you’re considering a product like a HELOC, managing it responsibly can enhance your score over time.

Create a budget and track your habits

Understanding how to move your score from fair to excellent involves more than just fixing numbers. 

Improving your credit calls for a fundamental change in your management of credit and personal finances. 

A simple budget helps you stay organized, reduce unnecessary spending, and prioritize debt payments. 

Use apps or spreadsheets to:

• Track income and expenses
• Set aside funds for credit card payments
• Build an emergency savings cushion
• Monitor debt payoff progress

Use credit monitoring tools

Real-time visibility can help you stay motivated and catch potential issues early. 

Credit monitoring tools can alert you to:

• Score changes
• New account openings
• Suspicious activity
• Hard inquiries

Upgrade your financial options

As your score improves, so do your financial opportunities. Moving from fair to excellent credit can unlock lower interest rates, better loan terms, and access to products like HELOCs.

A home equity line of credit can be a flexible financing option for:

• Home renovations
• Debt consolidation
• Emergency funding
• Major life expenses

The higher your credit score, the greater the potential to qualify for a HELOC with:

• Lower rates
• Higher credit limits
• Faster approvals
• More favorable terms

If you’ve worked hard to improve your credit, it’s worth seeing how far that progress can take you.

Stay consistent for long-term success in improving your credit

Yes, knowing how to go from fair to excellent credit today is good, but it’s an ongoing process that rewards consistency. 

Keep making payments on time, avoid carrying large balances, and revisit your credit reports annually.

Ready to use your improved credit? HomeEQ is here to help you explore your options. 

Start your HELOC application online today and take the next step toward a stronger financial future.