What is a Bad Credit Score? (2024)

FAQs

What is a Bad Credit Score? ›

A FICO score below 580 or a VantageScore of less than 601 is considered 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.

FICO credit scores, the industry standard for determining credit risk, range from 300 to 850 — with 670 to 739 considered a good score, 740 to 799 is very good and 800 to 850 is exceptional. A 700 score puts you in the middle of the good range but still slightly below the average credit score of 716.

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 a Bad Credit Score? On the FICO^® Score^☉ 8 scale of 300 to 850, one of the credit scores lenders most frequently use, a bad credit score is one below 670. More specifically, a score between 580 and 669 is considered fair, and one between 300 and 579 is poor.

Credit score and mortgages

The minimum credit score needed for most mortgages is typically around 620. However, government-backed mortgages like Federal Housing Administration (FHA) loans typically have lower credit requirements than conventional fixed-rate loans and adjustable-rate mortgages (ARMs).

In short, there is no set-in-stone credit score to get a car loan. A poor credit score is not an automatic disqualifier, but it will likely impact your ability to get a loan and a good interest rate.

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.

Many conventional loans allow you to borrow with a ”fair” credit score of 620 or higher, though your interest rate may be higher than it would be with a higher credit score. FHA loans can allow scores as low as 500, but will require a higher down payment.

However, with a 703 credit score, you should qualify for rates on-par with national averages. Also, even though your score qualifies you for a mortgage, it's important to know that the lower your score is, the stronger the rest of your qualifications are generally expected to be.

Can I buy a house with a 555 credit score? ›

The lowest credit score typically required to buy a house is 500 with an FHA loan, which requires the borrower to make a 10% down payment. For credit scores of 580 or higher, a 3.5% down payment is sufficient. Conventional loans typically require a minimum credit score of around 620.

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.

In general, you'll need a FICO credit score of at least 600 to qualify for a traditional auto loan, but the minimum credit score required with vary from lender to lender. As interest rates increase due to inflation, securing a subprime auto loan may be more difficult — but not impossible.

Having a credit score of 600 isn't ideal, but it's still possible to get a loan or a credit card. Most loan products will end up costing you more due to higher interest rates. However, with some hard work, you can improve your credit score and open up new, more attractive options.

What does having a 600 credit score mean? According to FICO® Score, 15.5% of the population has a credit score below 600, while the average credit score sits at 716.