What Is a Bad Credit Score?

A bad credit score is usually below 630 on a scale of 300 to 850. You can take steps to improve it to get better deals.

Bev O'SheaSeptember 4, 2020
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A bad credit score generally falls below 630 on a scale of 300 to 850 for the common version of scoring models FICO and VantageScore. Scores between 630 to 689 are considered fair credit.

Bad credit can stand between you and the credit deal you want. It can mean you get turned down by a lender — or that you get approved but have to pay a much higher interest rate than if your credit score were higher.

There are ways to work on your bad score to get better deals. Understanding how credit scores work will help you know where to focus your efforts.

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What is a bad credit score?

Individual lenders and card issuers set their own guidelines for what constitutes a bad score. Every lender makes its own decisions about the kinds of risks it is willing to take in extending credit.

Some lenders cater only to those with excellent credit, so even someone with a score of 695 could be rejected. Others may specialize in lending to people with bad credit scores and charge higher rates as well as fees for doing so.

FICO labels scores between 580 and 669 "fair" and considers them below the average score of U.S. consumers. FICO scores below 580 are labeled "poor" and FICO says they are well below the average score of U.S. consumers.

VantageScore considers scores between 601 and 660 "near prime," while scores below 600 are considered "subprime" for the VantageScore 3.0 scoring model.

Here’s how the categories generally fall on a scale of 300 to 850:

credit score ranges

You can improve your bad credit

Your credit scores are only a snapshot based on your credit report data at that moment. They change, and frequently.

By far the biggest factors are on-time payments and credit utilization. That means you need a track record — the longer, the better — of payments made by the due date and your credit card balances need to stay below 30% of your overall limit. You won’t see a big jump in your score if your bills are late and your balances are near your credit limits.

There are credit products that can help you build or rebuild your credit. Three worth trying are:

  • A secured credit card. You make an initial cash deposit, which typically becomes your credit limit. You then use the card like a regular credit card, being careful to pay your bill on time and keep your balance low.

  • Credit-builder loans. A loan amount is released to you after you pay off the loan. Make sure the lender — typically a credit union or community bank — will report your payments to the three major credit-reporting agencies.

  • Becoming an authorized user. If someone who has a long record of on-time payment and low credit utilization is willing to add you to a credit card, your credit could benefit.

What to expect with a bad credit score

If a lender does agree to extend you credit, you’ll pay more in interest than someone who has a higher credit score.

  • You won’t qualify for 0% interest credit cards, for example, or personal loans at single-digit interest rates.

  • You’ll face subprime rates to finance a car or a house.

  • You may also have to pay more for auto insurance, depending on the state you live in.

  • You may have to pay more for home insurance.

  • You may be stuck paying utility deposits that people with higher credit scores get to skip.

A bad credit score doesn't define you

A lousy credit score doesn’t mean you’re a bad person — it might just mean you put some unexpected bills on a credit card and had trouble paying, or that you missed a car payment when you lost your job.

Credit is really just a tool, and what makes a score “bad” depends on what you want it to accomplish for you.

If you had a low credit score and but worked hard to get it high enough to lease a car, the number you see will represent victory. But if your goal was to get a mortgage at a low interest rate, an identical score might be a crushing disappointment.

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