Is 550 a low 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.
If you have strong credit, you likely have a better shot of qualifying for a personal loan with lower rates and more favorable repayment terms. But if you have a poor credit score of 550 or lower, you may have a more challenging time getting approved. However, it is possible.
1. Poor (300-579): A 550 credit score falls within this range, indicating a higher likelihood of defaulting on loans and struggling with making timely payments. Individuals with scores in this range will have limited access to credit and may be required to pay higher interest rates and fees.
And it generally takes scores 7-10 years to fully recover. Unfortunately, there's no way to lessen the impact. But you can speed up the process by placing a deposit on a secured credit card and locking it in a drawer, or making purchases and paying the bill on time every month.
The good news is that when your score is low, each positive change you make is likely to have a significant impact. 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.
- Make your payments on time. ...
- Set up autopay or calendar reminders. ...
- Don't open too many accounts at once. ...
- Get credit for paying monthly utility and cell phone bills on time. ...
- Request a credit report and dispute any credit report errors. ...
- Pay attention to your credit utilization rate.
According to a report from Experian®, the average FICO credit score in America was 714 in 2022. So 600 falls below that national average. On the VantageScore range, the company says 600 scores are considered poor.
You are one of the 48% of Americans who had a score of 750 or above as of April 2023, according to credit scoring company FICO. FICO Blog. Average U.S. FICO Score at 718.
What Are Some of The Ways to Rebuild Your Credit Score? It's possible to go from a 500 credit score to 700 in 6-18 months, but your results depend on how you approach your credit. Making late payments and doing the same things as before will not help you build a good credit score and can prolong the process.
How long does it take to build credit from 500 to 700?
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.
- Be a Responsible Payer. ...
- Limit your Loan and Credit Card Applications. ...
- Lower your Credit Utilisation Rate. ...
- Raise Dispute for Inaccuracies in your Credit Report. ...
- Do not Close Old Accounts.
- Lower your credit utilization rate.
- Ask for late payment forgiveness.
- Dispute inaccurate information on your credit reports.
- Add utility and phone payments to your credit report.
- Check and understand your credit score.
- The bottom line about building credit fast.
Technically, pay for delete isn't expressly prohibited by the FCRA, but it shouldn't be viewed as a blanket get-out-of-bad-credit-jail-free card. "The only items you can force off of your credit report are those that are inaccurate and incomplete," says McClelland.
It can take 12 to 18+ months to build your credit from 500 to 700. The exact timing depends on which types of negative marks are dragging down your score and the steps you take to improve your credit going forward.
What is the average credit score? The average FICO credit score in the US is 718, according to the latest FICO data from April 2023. The average VantageScore is 701 as of December 2023. Credit scores, which are like a grade for your borrowing history, fall in the range of 300 to 850.
Average Credit Scores FAQs
Consider yourself in “good” shape if your credit score is above the average for people in your age group. Given that the average credit score for people aged 18 to 25 is 679, a score between 679 and 687 (the average for people aged 26 to 41) could be considered “good”.
If your credit score lands between 300 and 579, it is considered poor and lenders may see you as a risk. Here's how the FICO credit scoring system ranks credit scores: Poor: 300-579. Fair: 580-669.
Some types of mortgages have specific minimum credit score requirements. A conventional loan requires a credit score of at least 620, but it's ideal to have a score of 740 or above, which could allow you to make a lower down payment, get a more attractive interest rate and save on private mortgage insurance.
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.
What is the lowest credit score to buy a house?
Type Of Loan | Minimum FICO® Score |
---|---|
Conventional loan | 620 (Federal Housing Financing Agency requirement) |
Federal Housing Administration (FHA) loan with a 3.5% down payment | 580 (FHA requirement) |
FHA loan with a 10% down payment | 500 (FHA requirement) |
The lowest score you can get with either model is 300, though past scoring models have gone lower (and aren't used so much today). According to FICO, an estimated 11.1% of Americans have a FICO score ranging between 300 and 549 as of 2019.
The average 25-year-old is the upper limit for Gen Z and the average FICO® credit score for Gen Z (between ages 18-25 years) is 679, according to 2022 Experian® data. This falls in the lower limit of the “good” credit score range (670-739). This score is just a reference number.
Length of credit history makes up 10% of your FICO score so the older you get, the more your score is likely to rise. According to Experian® data, the average American credit score for the age group 18-24 was 679 as of September 2022. This falls in the good FICO® credit score range (670-739).
Here's the average credit score by generation as of the second quarter of 2023, according to Experian: Gen Z (18 to 26): 680. Millennials (27 to 42): 690. Gen X (43 to 58): 709.
References
- https://stellarfi.com/answer/what-is-the-average-credit-score-for-a-25-year-old
- https://www.usbank.com/home-loans/mortgage/first-time-home-buyers/credit-score-for-mortgage.html
- https://www.fidelity.com/learning-center/personal-finance/improving-credit
- https://www.bankrate.com/loans/personal-loans/credit-score-fall-after-paying-loan/
- https://www.investopedia.com/how-to-improve-your-credit-score-4590097
- https://www.bajajfinserv.in/does-your-cibil-score-affect-your-employment
- https://oaktreelaw.com/news/blog/will-bankruptcy-show-up-on-a-background-check-in-california/
- https://themortgagereports.com/75530/down-payment-300000-house
- https://www.coursera.org/articles/rescind-offer
- https://www.lendingtree.com/credit-cards/articles/raise-credit-score-30-days/
- https://www.psibackgroundcheck.com/news/9-common-red-flags-on-background-checks/
- https://www.nolo.com/legal-encyclopedia/california-law-use-credit-reports-employment.html
- https://www.flexjobs.com/blog/post/5-tips-for-job-searching-and-your-credit-history/
- https://themortgagereports.com/11306/buy-a-home-with-a-low-downpayment-or-no-downpayment-at-all
- https://wallethub.com/credit-score-range/550-credit-score
- https://www.badcredit.org/how-to/good-credit-may-help-get-job/
- https://stellarfi.com/answer/what-is-a-good-credit-score-for-a-20-year-old
- https://time.com/personal-finance/article/what-credit-score-do-i-need-to-buy-a-house/
- https://wallethub.com/credit-score-range/579-credit-score
- https://www.stilt.com/blog/2018/08/can-you-be-denied-a-job-because-of-bad-credit/
- https://www.cnbc.com/select/can-employers-see-your-credit-score/
- https://money.usnews.com/loans/personal-loans/articles/how-to-get-a-personal-loan-with-a-550-credit-score
- https://www.consumerfinance.gov/fair-lending/
- https://www.nerdwallet.com/article/finance/750-credit-score
- https://wallethub.com/answers/cs/how-long-to-go-from-500-to-700-credit-score-1000028-2140832798/
- https://cceh.org/wp-content/uploads/2015/04/Accepted_Forms_of_Income_Verification_and_Expense_Documentation.pdf
- https://updf.com/edit-pdf/edit-bank-statement/
- https://www.rocketmortgage.com/learn/what-credit-score-is-needed-to-buy-a-house
- https://www.inscribe.ai/document-processing/3-months-of-fake-bank-statements
- https://www.investopedia.com/what-credit-score-do-you-need-to-buy-a-car-5181034
- https://www.reddit.com/r/jobs/comments/168te1m/jobs_now_require_good_credit_history/
- https://www.businessinsider.com/personal-finance/average-credit-score
- https://wallethub.com/answers/pl/how-much-can-i-borrow-with-a-650-credit-score-1000508-2140806921/
- https://www.equifax.com/personal/education/credit-cards/articles/-/learn/should-i-pay-off-my-credit-card-in-full-each-month/
- https://www.rocketmoney.com/learn/homeownership/what-mortgage-lenders-look-for-on-bank-statements
- https://www.militarybyowner.com/resources/how-to-rent-a-home-with-a-bad-credit-score/
- https://www.bankrate.com/real-estate/buying-a-house-700-credit-score/
- https://www.kansascity.com/news/business/article284913977.html
- https://www.capitalone.com/learn-grow/money-management/can-you-get-a-job-with-bad-credit/
- https://singledebt.in/blog/how-long-does-it-take-to-get-a-credit-score-from-500-to-700
- https://www.thebalancemoney.com/how-to-resolve-discrepancies-with-your-bank-account-2386133
- https://www.lendingtree.com/credit-repair/will-your-credit-score-show-up-on-a-background-check/
- https://womenforhire.com/advice/job-offer-rescinded-after-credit-check-what-you-need-to-know-and-what-you-can-do/
- https://www.fool.com/the-ascent/research/average-credit-score/
- https://www.opploans.com/oppu/credit-repair/you-can-get-fired-for-bad-credit/
- https://www.upstart.com/credit-score/589-credit-score
- https://stellarfi.com/answer/what-percentage-of-the-population-has-a-credit-score-over-800
- https://www.quora.com/I-get-paid-in-cash-but-I-need-to-provide-a-Proof-of-Income-document-to-apply-for-a-mortgage-What-can-I-do-to-get-proof-of-income
- https://www.equifax.com/personal/education/credit/score/articles/-/learn/why-credit-scores-may-drop-after-paying-off-debt/
- https://www.equifax.com/personal/education/credit/score/articles/-/learn/raise-credit-scores-fast/
- https://www.pacificdebt.com/can-you-be-denied-a-job-because-of-bad-credit
- https://baradainc.com/job-offer-rescinded-after-credit-check/
- https://www.equifax.com/personal/education/credit/score/articles/-/learn/what-is-a-good-credit-score/
- https://finance.yahoo.com/news/does-employer-know-401-k-200009996.html
- https://money.usnews.com/credit-cards/articles/how-long-does-it-take-to-build-credit
- https://www.nerdwallet.com/article/finance/why-did-my-credit-score-drop
- https://themortgagereports.com/24603/how-to-buy-a-house-with-low-income-in-2017
- https://www.experian.com/blogs/ask-experian/can-paying-off-collections-raise-your-credit-score/
- https://www.creditkarma.com/home-loans/i/proof-of-income
- https://www.credible.com/blog/mortgages/mortgage-bank-statements/
- https://www.cnbc.com/select/easy-tips-to-help-raise-your-credit-score/
- https://work.chron.com/job-unstable-employment-record-18622.html
- https://www.bankrate.com/mortgages/fha-loan-requirements/
- https://www.nerdwallet.com/article/mortgages/fha-loan
- https://hires.shareable.com/blog/what-does-a-background-check-show
- https://www.experian.com/blogs/ask-experian/actions-that-can-lower-your-credit-score/
- https://www.yendo.com/blog/550-credit-score
- https://www.moomoo.com/us/support/topic4_297
- https://servicecu.org/credit-and-lending/can-your-credit-report-keep-you-from-getting-hired/
- https://www.chase.com/personal/credit-cards/education/credit-score/lowest-possible-credit-score
- https://www.experian.com/blogs/ask-experian/credit-education/score-basics/500-credit-score/
- https://www.onefamily.com/help/maturity/confirming-your-identity-been-asked-to-prove-your-bank-account/
- https://www.moneylion.com/learn/can-my-employer-check-my-bank-account/
- https://www.propertyinvestmentproject.co.uk/blog/tenant-bank-statements-payslips/
- https://capitalbankmd.com/homeloans/mortgage-calculators/mortgage-required-income-calculator/
- https://www.us.hsbc.com/checking-accounts/what-bank-details-do-employers-need/
- https://www.quickenloans.com/learn/credit-score-to-buy-a-house
- https://www.nerdwallet.com/article/finance/650-credit-score-good-or-bad
- https://iprospectcheck.com/employment-credit-report/
- https://www.experian.com/blogs/ask-experian/credit-education/improving-credit/improve-credit-score/
- https://www.rocketmoney.com/learn/debt-and-credit/what-is-the-average-credit-score-by-age
- https://www.opploans.com/oppu/building-credit/can-bad-credit-keep-you-from-getting-that-apartment/
- https://www.experian.com/blogs/ask-experian/why-employers-check-your-credit-report-and-what-they-see/
- https://wallethub.com/credit-score-range/720-credit-score
- https://www.lendingtree.com/personal/what-credit-score-do-you-need-for-personal-loan/
- https://www.ocrolus.com/blog/how-to-automate-the-bank-statement-proof-of-income-verification-process/
- https://www.investopedia.com/how-much-does-it-cost-to-repair-my-credit-5077091
- https://www.cnbc.com/2023/11/02/average-credit-score-by-age-in-the-us.html
- https://themortgagereports.com/22079/bank-statements-3-things-mortgage-lenders-dont-want-to-see
- https://www.nerdwallet.com/article/finance/credit-score-employer-checking
- https://time.com/personal-finance/article/how-to-improve-your-credit-score-fast/
- https://www.incharge.org/blog/can-my-credit-score-go-up-100-points-in-a-month/
- https://www.monster.com/career-advice/article/bad-credit-and-your-job-search
- https://www.paddio.com/learn/fha-loan-eligibility/
- https://www.capitalone.com/learn-grow/money-management/is-600-a-good-credit-score/
- https://www.indeed.com/hire/c/info/proof-of-employment
- https://cred.club/check-your-credit-score/articles/how-to-raise-your-credit-score-by-200-points-in-30-days
- https://devengo.com/blog/4-ways-to-verify-a-bank-account/
- https://www.dataleon.ai/en/blog/5-red-flags-in-your-bank-statements-that-could-derail-your-mortgage-application
- https://www.bankrate.com/real-estate/income-needed-for-200k-home/
- https://snappt.com/blog/identify-fake-bank-statements/
- https://www.eeoc.gov/pre-employment-inquiries-and-financial-information
- https://www.forbes.com/advisor/credit-score/how-to-fix-your-credit/
- https://stripe.com/resources/more/bank-account-verification-101
- https://www.sofi.com/learn/content/monthly-cost-200000-mortgage/
- https://upsolve.org/learn/bad-credit-denied-job/
- https://www.business.com/articles/business-debt-how-much-is-too-much-to-carry/
- https://www.bankrate.com/real-estate/average-credit-score-to-buy-a-house/
- https://techround.co.uk/vpns/can-my-employer-view-my-browsing-history/
- https://www.bankrate.com/personal-finance/credit/bad-credit-score/
- https://money.usnews.com/loans/personal-loans/articles/does-paying-off-a-loan-hurt-your-credit
- https://www.banks.com/articles/credit/credit-score/how-long-does-take-rebuild/
- https://www.americanexpress.com/en-us/credit-cards/credit-intel/fha-loan-credit-score/
- https://www.investopedia.com/can-you-pay-to-remove-a-bad-credit-report-4769891