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A bad credit score falls between 300 and 600, and about 7% of Americans fall under this range, according to Finder’s Consumer Confidence Index. A bad credit score can make it challenging to secure financing and better interest rates, but there are credit-building options to help you increase your score.
What’s a bad FICO score?
A FICO score between 300 and 579 is considered poor, and with a score this low, lenders may see you as a high-risk borrower. Here’s how FICO ranks credit scores:
Rating
Score
Poor
300–579
Fair
580–669
Good
670–739
Very good
740–799
Exceptional
800+
What’s a bad VantageScore?
VantageScore’s 4.0 model considers a score between 300 and 600 as bad, or subprime. Here’s how it ranks credit scores:
Because bad credit is typically associated with increased risk among insurers and lenders, people with bad credit may pay more for car insurance and home insurance (depending on your home state) and higher interest rates for financing and get less favorable terms overall.
Though not always the case, some employers may even run a background check that covers your credit report. However, how much this comes into play during the hiring process depends on the employer.
If you have a bad credit score and want to boost it, you have options to improve your credit score:
Review your credit report. Grab a free credit report from the credit bureaus and look for any errors or signs of identity theft that may be harming your credit history. Also, make sure there aren’t any mistakes on your reports, such as current accounts that are being reported in collections or late payments that weren’t actually late. If you find any mistakes, you can dispute them with the credit bureau directly.
Negotiate and settle your debts. Take note of all the debts you owe creditors. Consider calling your creditors to see if you can negotiate down your balance or secure more favorable repayment terms.
Pay your bills on time. Paying all your bills on time, especially to your creditors, can help move your score into a good credit score range. Payment history makes up 35% of your FICO credit score.
Apply for a credit-building card. You may want to apply for credit-building cards to prove to creditors you can repay your debts. These cards don’t check your credit and are usually linked to your debit account balance, so you can’t spend more than you have.
Avoid hard inquiries. Applying for new credit can mean a lender has to pull your credit report to analyze your credit history. This is considered a hard pull, which can ding your credit score anywhere from five to 10 points and impact it for up to 12 months.
Don’t close old credit lines. The length of your credit history plays a role in your overall credit score. Keeping older lines of credit open, even if you barely use them, can positively impact your credit.
Get expert help. Sometimes, you may not know what the best course of action is to improve your credit score. Many nonprofits, such as the NFCC (National Foundation for Credit Counseling), appoint certified financial counselors to help you craft a personalized financial plan.
Compare credit-building products
Narrow down top credit-building options by fee, minimum opening deposits, and more. For a closer comparison, tick the Compare box to see a few options and their features side by side.
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These are the credit-building cards with the lowest fees, most features, lowest APRs, and overall, the best perks.
7+
Great
These cards may have a few downsides, such as a service fee, but are still competitive options.
5+
Standard
These credit-building cards are average, and may charge a monthly fee, have limited reporting practices, but are still suitable.
0+
Basic
These cards are likely to have high monthly fees or interest rates, and may lack comprehensive reporting practices.
What is the Finder Score?
The Finder Score crunches over 30 credit-building cards and products from dozens of financial institutions and fintech companies. It takes into account the product's monthly fees, reporting practices, eligibility requirements, rewards programs, APR and features — this gives you a simple score out of 10.
To provide a Score, Finder’s banking experts only consider credit-building cards that report to the major credit bureaus as “credit-building cards.” If a card that claims it can build credit does not have any reporting practices, it is not considered a credit-building card and isn’t scored.
The first step to improving your bad credit score is knowing what range of credit you fall into. If you have bad credit, you aren’t alone. There are ways to build your credit. By following general credit-building guidelines and reaching out to the NFCC, your creditors and other resources, you can be on your way to achieving a better credit score.
Frequently asked questions
If you're starting out with no credit history, it could only take around six months of positive history to see a good credit score. If you're completely new to borrowing, then simply taking on an installment loan and staying current on your payments could result is a good credit score as soon as six months to two years.
If you're improving a bad credit score, it could take a few years, depending on the your age of accounts, your past payment history, and how long ago you got any negative marks. Most negative marks on your reports, like a missed payment or a car repossession, take up to seven years to fall off your credit reports.
Depends on how low you go! If you're in the mid-600-range, that may be considered a "good" or "fair" credit score. If you're below 580, that is usually considered a "bad" credit score. Of course, we're being general here, and the answer will depend on whether it's FICO, VantageScore and who you ask.
It depends on your lender and the mortgage type. For example, if you want a conventional mortgage, plan on needing at least a 620 credit score.
If you're aiming for an FHA (Federal Housing Administration) mortgage, then you'll likely need a credit score above 500. Also, your credit score can determine your down payment requirement for these loan types (the better your score, the lower the requirement can be).
Dhara Singh was a freelance personal finance writer at Finder specializing in loans. Formerly she was a top 10 journalist at Yahoo Finance with more than 38+ million content views where she covered retirement and mortgages. She has also written for Bankrate, and CNET and continues to write for a variety of outlets, such as Investopedia and Worth magazine. Her articles focus on equipping readers with the right information and data so they can make the most informed decisions related to their finances.
Dhara previously worked as an insights analyst for Finder’s PR team, where she started the Deadliest Cities to Drive series in 2018, connecting interesting data analysis to a suite of car insurance products. When she’s not writing, Dhara coaches small business owners through her Stories to Sales programs and empowers them to use their life experiences to help other people. She has also self-published a poetry book on Amazon called Tell her She’s Lovely.
Dhara holds a B.S. in Finance and Supply Chain Management from Rutgers University and a M.S. in Journalism from Columbia University.
See full bio
A good credit score falls in the 670 to 749 range. A credit score of 750 and above is considered very good or excellent.
Advertiser disclosure
Finder.com is an independent comparison platform and information service that aims to provide you with the tools you need to make better decisions. While we are independent, the offers that appear on this site are from companies from which Finder receives compensation. We may receive compensation from our partners for placement of their products or services. We may also receive compensation if you click on certain links posted on our site. While compensation arrangements may affect the order, position or placement of product information, it doesn't influence our assessment of those products. Please don't interpret the order in which products appear on our Site as any endorsement or recommendation from us. Finder compares a wide range of products, providers and services but we don't provide information on all available products, providers or services. Please appreciate that there may be other options available to you than the products, providers or services covered by our service.
We update our data regularly, but information can change between updates. Confirm details with the provider you're interested in before making a decision.
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