Key points about: bad credit scores
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FICO and VantageScore® are the two major credit scoring models. They calculate credit scores differently, but both offer an idea of your creditworthiness. Neither has a “bad” range.
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A low credit score may make it difficult to qualify for certain financial products or favorable rates.
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You could positively impact your credit score by making timely payments and reducing your credit utilization ratio, among other changes.
Your credit score plays a major role in your financial life. A credit score is calculated when the consumer’s credit report information (payment history, amounts owed, etc.,) is processed through the credit score algorithm housed at the credit reporting agency. Lenders typically consult your score to determine your creditworthiness. A bad credit score may make opening a newcredit cardaccount, buying a home, taking out a personal loan, or even renting an apartment more difficult. However, what qualifies as a “bad credit score” depends on your creditor and needs.
Credit score ranges
Lenders use credit scores to predict how likely you are to repay bills on time. Credit score ranges streamline the application and approval process. Fair Isaac Corporation (FICO)1 and VantageScore® are two well-known credit scoring agencies. While both agencies use a scoring range of 300 to 850, they calculate and categorize scores differently. Both scoring systems use five ranges, but those ranges differ slightly.
FICO® Scores generally use the following ranges:
Exceptional—800 to 850
Very good—740 to 799
Good—670 to 739
Fair—580 to 669
Poor—300 to 579
VantageScore® 4.0 uses the following ranges:
Excellent—781 to 850
Good—661 to 780
Fair—601 to 660
Poor—500 to 600
Very poor—300 to 499
Are there good and bad credit score ranges?
Both FICO and VantageScore®have “good” credit score ranges. FICO® Scores also have “very good” and “exceptional” ranges, while VantageScore® calls its highest range “excellent.” However, neither scoring agency has a “bad” credit score range. Lenders may require different credit scores for each product, so “bad” credit scores vary. A credit score in the “fair” or “poor” ranges on the FICO® Score scale or the “poor” or “very poor” on the VantageScore® scale may indicate you’re a credit risk to a lender and make it more difficult to reach your financial goals.
Is it bad to check your credit score?
It’s a common misconception that checking your credit score hurts your credit; it doesn’t. In fact, it’sgood to check your creditto identify increases or decreases in your score. That way, you could make changes as necessary to improve your credit. Staying on top of your credit score and credit report could help you maintain your financial well-being, especially if you plan to make any significant life changes soon.
What’s a bad credit score for you?
While higher credit scores are preferred, what qualifies as a “bad credit score” depends on your needs and situation. Some types of credit, including certain credit cards, mortgages, and loans, have stricter score requirements than others. Likewise, some landlords may require specific credit scores for certain units. The credit scoring model each company uses to check your credit may also affect what qualifies as a bad credit score for you, as FICO® Scores and VantageScore® have different ranges. For example, a 662 credit score would be “fair” under the FICO scoring model but “good” under the VantageScore® model.
Lenders may approve you for new credit even if you have a low credit score. However, you may receive terms with higher interest rates or additional fees. A low credit score may also prevent you from qualifying for certain rewards credit cards.
Can you help a bad credit score?
Yes, you can help a bad credit score. If your score isn’t as high as you’d like it to be, a few changes could help:
- Pay your credit card bills on time each month. When possible, pay more than the minimum.
- Keep your credit utilization ratio as low as possible. You could do that by paying down your balances or increasing your credit limits.
- Take out a new credit card. A new card could increase your credit limit and improve your credit mix. However, it could also reduce your length of credit history and search for new credit. Some credit card issuers even offer a specific credit card for bad credit scores.
Did you know?
A credit card may be able to help your credit score, but if you have poor credit, it may be difficult to be approved for a new card in the first place. That’s where a secured credit card may be able to help. See if a Discover it® Secured Credit Card is right for you.
Learn More
While “bad credit” may not have one universal meaning, a low credit score can make it more challenging to meet your financial goals. If you can keep your score in the “good” credit score ranges or above according to the FICO and VantageScore® models, you may find it easier to get approved for the credit you need. If your score slips below those ranges, don’t panic. You could help it over time by taking a few simple steps.
FAQs
A credit score of 600 or below is generally considered to be a bad credit score. And if your credit is low, you may qualify for a loan but the terms and rates may not be favorable. Credit scores between 601 and 669 are considered fair credit scores.
What's considered a bad credit score? ›
What is a bad FICO credit score? A bad FICO credit score may fall in the fair or poor FICO range. FICO considers a credit score to be fair if it's between 580 and 669, and poor if it's below 580. According to FICO, borrowers with a FICO score in a lower range tend to be viewed as a credit risk.
Is a 580 credit score bad? ›
Although ranges vary depending on the credit scoring model, generally credit scores from 580 to 669 are considered fair; 670 to 739 are considered good; 740 to 799 are considered very good; and 800 and up are considered excellent.
Is 500 a really bad credit score? ›
Your score falls within the range of scores, from 300 to 579, considered Very Poor. A 500 FICO® Score is significantly below the average credit score. Many lenders choose not to do business with borrowers whose scores fall in the Very Poor range, on grounds they have unfavorable credit.
What is a very very bad credit score? ›
Do you have a poor credit score?
| Experian | Equifax |
|---|
| Very poor | 0-560 | 0-279 |
| Poor | 561-720 | 280-379 |
1 more row10 Ways to Boost Your Credit Score
- Review Your Credit Report. ...
- Pay Your Bills on Time. ...
- Ask for Late Payment Forgiveness. ...
- Keep Credit Card Balances Low. ...
- Keep Old Credit Cards Active. ...
- Become an Authorized User. ...
- Consider a Credit Builder Loan. ...
- Take Out a Secured Credit Card.
The base FICO® Scores range from 300 to 850, and a good credit score is between 670 and 739 within that range.
How long does it take to go from 580 to 700 credit score? ›
Average Recovery Time
For instance, going from a poor credit score of around 500 to a fair credit score (in the 580-669 range) takes around 12 to 18 months of responsible credit use. Once you've made it to the good credit zone (670-739), don't expect your credit to continue rising as steadily.
Is a 900 credit score possible? ›
Highlights: While older models of credit scores used to go as high as 900, you can no longer achieve a 900 credit score. The highest score you can receive today is 850. Anything above 800 is considered an excellent credit score.
Can I buy a house with a 571 credit score? ›
You'll typically need a credit score of 620 to finance a home purchase. However, some lenders may offer mortgage loans to borrowers with scores as low as 500. Whether you qualify for a specific loan type also depends on personal factors like your debt-to-income ratio (DTI), loan-to-value ratio (LTV) and income.
The time it takes to raise your credit score from 500 to 700 can vary widely depending on your individual financial situation. On average, it may take anywhere from 12 to 24 months of responsible credit management, including timely payments and reducing debt, to see a significant improvement in your credit score.
How long does it take to get a credit score from 550 to 700? ›
The time it takes to increase a credit score from 500 to 700 might range from a few months to a few years. Your credit score will increase based on your spending pattern and repayment history. If you do not have a credit card yet, you have a chance to build your credit score.
What is the lowest credit score to buy a house? ›
Here's what to expect based on the type of loan you're applying for:
- Conventional Loans Minimum Credit Score: 620. ...
- Jumbo Loans Minimum Credit Score: 700. ...
- FHA Loans Minimum Credit Score: 500. ...
- VA Loans Minimum Credit Score: 620. ...
- USDA Loans Minimum Credit Score: 580.
What's the Range of Lowest to Highest Credit Score?
- Exceptional Credit: 800 to 850.
- Very Good Credit: 740 to 799.
- Good Credit: 670 to 739.
- Fair Credit: 580 to 669.
- Poor Credit: Under 580.
The average FICO credit score in the US is 717, according to the latest FICO data. The average VantageScore is 701 as of January 2024. Credit scores, which are like a grade for your borrowing history, fall in the range of 300 to 850.
How long does it take to rebuild credit? ›
Average score recovery time by type of event
| Event | Average credit score recovery time |
|---|
| Missed or defaulted payment | 18 months |
| High credit utilization | 3 months |
| Hard credit inquiry | 3 months |
| Late mortgage payment (30-90 days) | 9 months |
2 more rowsYour score falls within the range of scores, from 300 to 579, considered Very Poor. A 550 FICO® Score is significantly below the average credit score. Many lenders choose not to do business with borrowers whose scores fall in the Very Poor range, on grounds they have unfavorable credit.
Is 550 a good or bad credit score? ›
A credit score of 550 is considered deep subprime, according to the Consumer Financial Protection Bureau. In fact, any score below 580 falls into the deep subprime category. The Fair Isaac Corporation (FICO), which is one of the most widely used credit scoring methods, categorizes credit scores of 579 or lower as poor.
Is 600 a bad credit score? ›
Your score falls within the range of scores, from 580 to 669, considered Fair. A 600 FICO® Score is below the average credit score. Some lenders see consumers with scores in the Fair range as having unfavorable credit, and may decline their credit applications.
Is 620 an OK credit score? ›
If you have an 620 credit score, you are generally considered a subprime consumer, but it won't necessarily prevent you from borrowing money. The average FICO credit score in the United States is 714 as of 2021, and scores within the 580-669 range are considered to be “fair” credit.
