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LendingTree is compensated by companies on this site and this compensation may impact how and where offers appear on this site (such as the order). LendingTree does not include all lenders, savings products, or loan options available in the marketplace.
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What Is a Bad Credit Score?

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The threshold for a bad credit score depends on the credit scoring model you’re looking at. According to FICO®, the most widely-used credit scoring model, a bad credit score is below 580. Meanwhile, under the VantageScore model, a bad credit score is 600 or below.

And you may know that a bad credit score reduces your opportunities for finding good credit products and insurance policies — but did you know that it can also impact your career and housing choices? Companies use credit scores as a part of their screening process for jobs and rental homes.

Having a low credit score can be disheartening. Fortunately, you can achieve a good or excellent credit score over time. Building credit requires diligent effort and good habits in managing your finances, but it can be well worth it. A good credit score can save you money on interest rates and insurance, while also potentially expanding your opportunities when it comes to applying for an apartment or a job.

What is a bad FICO® Score?

A bad FICO® Score is below 580, roughly the midpoint between the highest and lowest possible credit scores.

FICO® Score ranges
<580Poor
580-669Fair
670-739Good
740-799Very Good
800+Exceptional

Your FICO® Score is calculated based on five categories of data:

  • Payment history
  • Amounts owed
  • Length of credit history
  • New credit
  • Credit mix

The information is often a mix of positive and negative data. For instance, you may have a strong history of on-time payments, but have an old debt in collections that puts a large dent in your score.

Your credit score is constantly evolving, and according to the FICO® website, the importance of each category varies by person. For example, a 22-year-old first-time cardholder with bad credit will have a different calculation than someone with a long credit history of late payments and high credit use.

More than 90% of top lenders use FICO® Scores, so if you already have a credit card, mortgage, or auto loan, there’s a good chance they used your FICO® Score during the application process.

Get a detailed look at your credit score with

What is a bad VantageScore?

A bad VantageScore is below 600 and classified as subprime. A VantageScore is comparable to a FICO® Score in that both are credit scores. However, they differ in the formulas used to calculate each score. Your VantageScore and FICO® Score may vary by dozens of points, even though both use the same data for the calculation.

The VantageScore 4.0 model uses the following factors to determine your score:

  • Payment history
  • Depth of credit
  • Credit utilization
  • Recent credit
  • Balances
  • Available credit

VantageScore ranges
300-600Subprime
601-660Near prime
661-780Prime
781-850Superprime

Check your credit score for free

Many credit card issuers let you see your FICO® Score or VantageScore on their website or mobile app. Several companies and credit card issuers offer free credit scores to anyone. It takes just a few minutes to complete a short registration before viewing your credit score.

Free credit scoreAvailable toCredit scoring model used
LendingTree SpringEveryoneVantageScore® 3.0
Experian BoostEveryoneFICO® Score 8
Discover Credit ScorecardDiscover cardholdersFICO® Score 8
CreditWise from Capital OneEveryoneVantageScore® 3.0
Chase Credit JourneyEveryoneVantageScore® 3.0

Five factors impact your FICO® Score. Each is weighted differently, and you’ll notice that it’s much more important to have an excellent history of on-time payments than to apply for three credit cards over a year.

Credit score factorsHow it impacts your credit score
Payment history (35%):Payment history is the biggest factor in credit scoring. Just one late payment on a credit card or loan can seriously bring down your score.
Amounts owed (30%):Also referred to as your credit utilization ratio, this is how much you owe at any given time compared to your line of credit. Carrying a large balance on a card can also seriously impact your score.
Length of credit history (15%):The length of your credit history includes the age of your oldest and youngest accounts, plus the average age of all accounts.
Credit mix (10%):Having a mix of credit can improve your score. This includes revolving debt (like credit cards) and installment loans (like auto, home or personal loans).
New credit applications (10%):Too many recent credit applications is a red flag, but the effect is short-lived. Scores usually only cover hard credit inquiries within the last 12 months.

Companies use credit scores for more than just loan applications. Having a bad credit score can negatively impact your life in a variety of ways:

More difficult credit approval/limited card choices

A low credit score can make it difficult to qualify for a card with a good interest rate, rewards, cardholder benefits and purchase protections. There are credit cards for building credit open to those with limited or poor credit. However, many are secured credit cards, which means you’ll have to put down a deposit to open the card, and you’ll likely have a very low starting credit limit. And while there are unsecured credit cards for people with bad credit, most charge high fees that make carrying a credit card costly.

Higher interest rates

Credit scores are used to determine the interest rate you pay on loans and credit cards. The higher your score, the lower you can expect your interest rate to be. A LendingTree study found that raising your credit score from fair (580 to 669) to very good (740 to 799) has dramatic results. The average credit card APR for individuals with fair credit is 28.07%, while only 21.11% for those with very good credit.

Less favorable loan options

Your credit score can restrict your access to loans, in addition to higher interest rates. When buying a home, you may find that you don’t qualify for a conventional loan. You may be able to qualify for a government-backed loan, like an FHA or VA loan. However, you’ll probably have to put down a larger down payment and pay a much higher interest rate than someone with good credit.

Higher insurance premiums

Insurance companies use your credit score to determine your rates for everything from auto and home insurance to life insurance. Companies use your credit information to help gauge your risk of making future claims. A bad credit score could mean higher premiums or coverage denial.

Rental restrictions

A bad credit score can also impact your ability to rent an apartment or home. Landlords use credit reports to screen prospective tenants. You may be unable to qualify for a rental, or you might have to get a co-signer or pay a higher security deposit.

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Tip

If you’re having a hard time qualifying for an apartment, consider applying with a smaller mom-and-pop landlord — they may offer you more leeway, whereas large property management companies tend not to budge.

Loss of career opportunities

A large number of companies use credit checks to measure a job candidate’s trustworthiness and decision-making skills. Like the insurance sector, employers believe there’s a correlation between one’s credit score and the ability to perform well in the workplace, especially when money is involved.


Under the Fair Credit Reporting Act (FCRA), a company must get your written permission before performing a credit check. However, it’s done as a soft pull, so there’ll be no damage to your credit score.

Utilities may require deposits

Bad credit can be cumbersome when setting up utilities and cell phone service. Since these services typically bill a month or quarter after you open the account, there is a level of trust involved. To mitigate risk, companies may require a deposit if a customer has a low credit score. Although the deposit is refundable when you discontinue service or establish a good payment history, having deposits with multiple service providers may be a significant financial burden.

While there are no quick fixes to improving credit. the following tried-and-true methods may help:

1. Check your credit report for errors

Your credit report could contain errors, and removing them is an easy way to improve your credit score. Estimates show that between 20% and 25% of credit reports contain incorrect information. You can get a copy of your three weekly credit reports from AnnualCreditReport.com. Read through them carefully and dispute any errors that you find.

2. Pay bills on time

While it may seem inconsequential to pay your rent or credit card a day late, the lender may report your late payment to the credit bureaus even if they waive late fees. Since your payment history makes up more than a third of your credit score, staying on track is essential.

If your late payments stem from forgetfulness, consider automating your bills or setting a recurring calendar reminder to pay them several days before they’re due. But if your payments are late due to financial constraints, it might be time to set up a budget to help manage your income and expenses. Finally, consider a side hustle to boost your income if it’s a lack of cash.

3. Catch up on old debt

Paying off outstanding debt helps boost your credit. If the debt is small and you have the money, pay it off immediately. For larger debt or multiple debts, consider a debt consolidation loan. This can reduce the interest that you’re paying (especially if you’re carrying balances on credit cards with high APRs) and simplify your finances by having just one payment.

4. Reduce your credit utilization ratio

Ideally, you shouldn’t use more than 30% of your available credit. For example, if you have a $1,000 credit limit on a card but a balance of $600, you are using 60% of your credit. This is calculated across all your available lines of credit, so while you may use 10% with one account and 60% with another, your utilization may still be above 30% overall.

You can keep your utilization low by making regular weekly payments. When your statement closing date approaches, you’ll have less debt reported, thus a better credit utilization ratio.

By making a payment before the statement closing date, the credit utilization for Cardholder 1 is half of what it is for Cardholder 2 in the following example:

Payment dateCardholder 1 $1,000 credit limitCardholder 2 $1,000 credit limit
April 1$300 charge$300 balance$300 charge$300 balance
April 15$200 payment$100 balance$0 payment$300 balance
April 18$100 charge$200 balance$100 charge$400 balance
April 29 (statement closing date)$200 due$400 due
Credit utilization ratio20%40%

5. Open a secured credit card

One of the best ways to build credit is to use a credit card — but if you don’t have good credit, it can be challenging to get one. Secured credit cards are a solid choice in this credit paradox.

With a secured card, you put down a cash deposit, which acts as your credit line. You can use the card just like a regular credit card to charge purchases and pay for those purchases later.

Some cards, like the Discover it® Secured Credit Card and the Capital One Platinum Secured Credit Card, offer automatic credit reviews after a certain time. With a history of on-time payments, you may be able to upgrade to an unsecured credit card and have your deposit refunded.

6. Become an authorized user

Being an authorized user on a credit card lets you piggyback off of another person’s credit. Once you’ve been added to a card as an authorized user, its full payment history will appear on your credit report, regardless of whether you use the card. This can be a great way to build an instant credit history for yourself, provided the account has a history of timely payments.

Note that you will have to trust that the primary cardholder won’t do anything to lower their credit when you’re on their account. However, you can have yourself removed from the card to remove any negative payment history from your credit report.

7. Consider a credit builder loan

Credit builder loans work in the opposite way of traditional loans. You deposit cash in a bank account to secure a loan, and then pay off the loan in installments. Once the loan is paid off, you receive your money back as a lump sum.

Credit builder loans can be easier to qualify for with bad credit, and can help build credit with lower interest rates than credit cards — and without the temptation to spend. The downside is that they aren’t free and also come with risk. You’ll pay interest or fees on your credit builder loan, and if you miss a payment, you may be subject to penalty rates and fees.

For Capital One products listed on this page, some of the above benefits are provided by Visa® or Mastercard® and may vary by product. See the respective Guide to Benefits for details, as terms and exclusions apply.

No, it isn’t bad to check your credit score if you are checking or ordering the information yourself. You can use a free service like LendingTree Spring or get your info from a credit reporting agency like myFICO® or Experian, with no impact on your score.

You can fix a bad credit score by making wise financial decisions, like paying your bills on time and not carrying a large balance on your credit card. It may take some time to improve your credit score, depending on the length of your credit history and the severity of the infractions. If you have a bad credit score simply because you’re new to using credit, you could build your credit in months.

However, if your credit report shows debt in collections or a history of late payments, it will take longer since these events stay on your credit report for seven years. Note, however, that with each passing year, the impact lessens. With good financial habits, you will notice a gradual increase in your score.

Debt consolidation can help your credit score when you handle it properly. Initially, you may notice your score drop if you take out a debt consolidation loan. But when you use a solid debt consolidation strategy to start paying down your debt, you should see your credit score rise.

Debt consolidation isn’t a magic solution, but it may be helpful. Check out the debt consolidation calculator to see if consolidation is right for you.