370 Credit Score: Is it really that bad?

by Stable MARK | Updated: August 17, 2022
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Although 370 is a low credit score, it does not mean that you will never be able to get a mortgage, car loan, or unsecured credit card. There are many different factors that lenders take into account when considering a loan, and your credit score is just one of them. You may still be able to get a loan with a lower credit score, although you may have to pay a higher interest rate. Don't let your credit score stop you from applying for a loan - you may be surprised at what you can get approved for.

If your credit score is 370, there are still things you can do to improve your credit rating. In this article, we'll go over some tips on how to get credit with a low score and what you can do to improve your credit in the future.

A 370 credit FICO score
Figure 1: 370 falls within the FICO credit score range concidered poor or very poor

15% of consumers have FICO® Scores in the Very Poor range (300-579).

Although a 370 credit score is not the lowest score possible, it is still not a good score. This score signals to potential lenders that you have had payment problems in the past and are therefore a risky investment. As a result, it will be difficult to qualify for a loan or unsecured credit card with a 370 credit score. However, this score is not impossible to improve. By focusing on rebuilding your credit reputation, you will eventually be able to qualify for a mortgage, car loan, etc.

How to improve your 370 credit score

Even if your FICO® Score of 370 is well below the average credit score of 711, there is still plenty of opportunities to improve your score. A great way to start building up your credit is to get your FICO® Score. Along with the score, you'll receive a report detailing the main events in your credit history that negatively affect your score. This information, which comes directly from your credit history, can help you identify specific issues to work on in order to raise your credit score.

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98% of customers have FICO® Scores higher than 370

How to build a better credit score

If your FICO® score is in the poor range, it's a good idea to get your credit reports from Experian, Equifax, or TransUnion. Familiarizing yourself with their contents can help you better understand any credit missteps in your history, so you know what to avoid as you work to build up your credit. If you develop better credit habits, you're likely to see improvements in your credit scores over time.

Of consumers with FICO® Scores of 370, 15% have credit histories that reflect having gone 30 or more days past due on a payment within the last 10 years. This shows that these consumers are reliable and trustworthy. They are the perfect candidates for credit products.

What makes an impact on your credit scores

Despite the fact having bankruptcies or other public records on your credit report will typically lower your credit score, you can take steps to lessen the impact. Settling liens or judgments as soon as possible can help, but in the case of bankruptcy, only time will allow your credit score to recover. A Chapter 7 bankruptcy will remain on your credit report for up to 10 years, and the Chapter 13 bankruptcy will stay there for 7 years. However, even though your credit score may begin to improve years before the bankruptcy is removed from your credit file, some lenders may still refuse to work with you.

The average credit card debt for those with FICO® Scores of 370 is $7,659

Your credit utilization rate is one of the most important factors in your credit score. This is the percentage of your credit limit that you are using at any given time. To calculate it, simply divide your outstanding balance by your credit limit and multiply by 100. You can also calculate your overall utilization rate by adding up the balances on all your credit cards and dividing them by the sum of their credit limits. Most experts recommend keeping your utilization rate below 30% on a card-by-card basis and overall to avoid damaging your credit score. In fact, the utilization rate contributes up to 30% of your FICO® Score. So make sure you keep an eye on it!

Paying your bills on time is the best way to improve your credit score. This single factor can account for more than one-third of your FICO® Score. So if you want to improve your credit, make sure you're paying your bills on time, every time.

If all other factors are equal, a longer credit history will usually result in a higher credit score than a shorter history. The number of years you've been using credit can affect up to 15% of your FICO® Score. If you're new to the credit market, there's not much you can do about this factor right now. But if you're patient and careful to avoid bad credit behaviors, your score will improve gradually over time.

If you want to improve your credit score, it's important to have a mix of different types of credit. This means having both revolving credit (like credit cards) and installment credit (like loans). The FICO® credit scoring system favors users with several credit accounts and a mix of both types of credit. So if you only have one type of credit account, expanding your portfolio could give your score a boost. Credit mix is responsible for up to 10% of your FICO® Score, so it's definitely worth considering if you're looking to improve your creditworthiness.

If you're looking to maintain a good credit score, it's important to avoid applying for too many new loans or credit cards. Every time you apply for credit, it triggers a hard inquiry, which is recorded on your credit report and reflected in your score. A hard inquiry occurs when a lender checks your credit score (and often your credit report) to decide whether to extend you a loan. While hard inquiries can cause your credit score to drop a few points, it usually rebounds within a few months as long as you keep up with your bills and avoid making any more loan applications during that time. (Checking your own credit is a soft inquiry and doesn't have any impact on your score.) New credit activity makes up for 10% of your FICO® Score.

Improving your credit score

If you're starting with a very poor credit score, it will take some time to improve it to a fair or good score. You won't see any major changes overnight, but if you start making small changes now, you will begin to see your score slowly improve over the next few months. Here are some things you can do to help:

Pay on time

It's important to have a good payment history if you want to maintain high credit scores. Paying on time, every time on accounts that are reported to the three main consumers credit bureaus can help you build up a positive payment history.

If you accidentally make a late payment, call your lender as soon as possible. They may be able to help you resolve the issue before it gets reported to the credit bureaus. But if it's already been reported, it can be difficult to remove it from your credit reports.

Keep your balances low

It's a good idea to keep your credit card balances low in order to keep your credit utilization rate down. Credit utilization is the percentage of your available credit that you're using at any given time. Most experts recommend keeping your utilization rate below 30%. But if you can manage to keep it even lower than that, that's even better.

There's no benefit to carrying a balance on your credit cards if you can afford to pay off the full balance each month. When it comes to building your credit, it's best to make consistent charges to the account while keeping the total amount owed under 30% of your credit limit. If you can, try to pay off your statement balance in full and on time each month so you don't get charged interest on those purchases.

Debt-management plan

If you're struggling to repay your loans and credit cards, a debt-management plan could bring some relief. You work with a non-profit credit-counseling agency to develop a manageable repayment schedule. Entering into a DMP effectively closes all your credit card accounts, which can lower your credit scores. However, your scores will rebound more quickly from this than they would from bankruptcy. If this sounds too extreme for you, you may still want to consult a credit counselor (not a credit-repair outfit) to devise a game plan for improving your credit.

Credit-builder loan

Credit unions offer small loans to help their members build up or rebuild their credit. These loans can be a great way to improve your credit score, as long as you make regular, on-time payments. One of the most popular types of credit-builder loans works like this: the credit union issues you a loan, but instead of giving you cash, they place the money in an interest-bearing savings account. Once you've paid off the loan, you get access to the money plus the accumulated interest. This type of loan is partly a savings tool, but the real benefit comes from the fact that the credit union reports your payments to the national credit bureaus. As long as you make regular on-time payments, the loan can lead to credit-score improvements. (Before obtaining a credit-builder loan, make sure the credit union reports payments to all three national credit bureaus.)

Apply for a secured credit card

A secured credit card can help you to improve your credit score. These cards typically have a small borrowing limit—often just a few hundred dollars— and you put down a deposit in the full amount of that limit. As you use the card and make regular payments, the lender reports those activities to the national credit bureaus, where they are recorded in your credit files and reflected in your FICO® Scores. By making timely payments and avoiding "maxing out" the card, the use of a secure credit card can promote improvements in your credit score.

Credit cards and loans with a 370 credit score

Although it will be difficult, it is not impossible to borrow money with a 370 credit score. You may have more luck qualifying for a student loan, but dating back to 2008, only a very small percentage of people with credit scores below 540 have been approved for most other types of loans and lines of credit. In particular, you're unlikely to qualify for a mortgage with a 370 credit score because FHA-backed home loans require a minimum score of 500. However, your odds are slightly higher with other types of loans.

Credit Cards For Poor Credit Score

Suitable For
Capital One Platinum Secured Credit Card
rebuilding credit
Capital One Platinum Secured Credit Card
Mission Lane Visa® Credit Card
low annual fee
Mission Lane Visa® Credit Card
Discover it® Secured Credit Card
secured card with rewards
Discover it® Secured Credit Card
Self-Credit Builder Account with Secured Visa® Credit Card
building credit with savings
Self-Credit Builder Account with Secured Visa® Credit Card
OpenSky® Secured Visa® Credit Card
low-interest credit-building
OpenSky® Secured Visa® Credit Card
Discover it® Student Cash Back
rotating cash-back bonus categories
Discover it® Student Cash Back
Milestone® Mastercard®
fraud protection
Milestone® Mastercard®
Indigo® Mastercard®
bankruptcy forgiveness
Indigo® Mastercard®

Store credit cards

If you're looking to build credit, a store credit card may be a good option for you. This type of card typically offers incentives to shop at a specific retailer. Store credit cards can be either secured or unsecured, so they don't technically fall into a third category. However, they are worth considering as an option if you're trying to improve your credit score.

If you have poor credit, you might have a better chance at getting approved for a store credit card. The potential downside is that these cards tend to come with high interest rates, and you may only be able to use them at a specific store. However, they might offer rewards and benefits that make sense if you already shop at the store in question. Therefore, it could be worth applying for a store credit card even if you have poor credit.

If you've explored all your options and still can't find a credit card that you can get approved for, you may want to consider asking a family member or trusted friend to add you to their account as an authorized user. But first, make sure you understand the pros and cons of being an authorized user on a credit card.

Unsecured credit cards

If you can't afford a security deposit, an unsecured credit card might be a good option for you. The trade-off is that it could come with an annual fee — which is arguably worse than a security deposit because it's typically nonrefundable. You might also face higher interest rates. However, this option could be helpful if you're in a tight financial situation and need access to credit right away.

Secured credit cards

If your credit still needs some work, applying for a secured credit card may be your best bet. With a secured card, you’ll pay a security deposit upfront, which typically sets your credit limit. So if your security deposit is $400, for example, your credit limit will also be $400. This gives the issuer some insurance in case you close the account without paying off your debt.

Because secured cards pose less of a risk for credit card issuers, they may be more readily available to someone with poor credit. And if the lender reports your on-time payments and other credit activity to the three main credit bureaus, a secured card can actually benefit you as a borrower.

Personal loans with a 370 credit score

If you have poor credit scores, you may find it difficult to get approved for a personal loan. Your credit scores may not be high enough to qualify for personal loans with the lowest interest rates. Instead, you may have to settle for a personal loan with a higher interest rate and other fees, such as an origination fee.

A personal loan with a high interest rate and other fees may not be very appealing to you, especially if your intention with the loan is to consolidate high-interest credit card debt. The APR on your personal loan could be just as high or even higher than the interest rate you're currently paying on your credit cards.

If you're considering taking out a personal loan, you should first ask yourself whether you really need the money right now. If you can wait awhile and build up your credit, you may be able to qualify for a personal loan with a lower APR and better terms down the road.

On the other hand, if you're in a bind and having trouble finding a personal loan you qualify for, you might be considering a payday loan. While everyone's situation is different, you should generally be wary of these short-term loans that come with high fees and interest rates. They can quickly snowball into a cycle of debt that's even harder to climb out from.

Auto loan rates for poor credit

It's possible to get a car loan even if you have poor credit. However, it may be more difficult to get approved for a loan if your credit score is low. Even if you are able to get approved for a loan with bad credit, the interest rates will be high, which can make the loan very expensive.

If you have time to build your credit before applying for a car loan, you may be able to get better rates eventually. But if you don’t have time to wait, there are some strategies that can help you get a car loan with bad credit.

Consider using a co-signer if you have a trusted family member or friend with good credit who is willing to share the responsibility of a car loan with you. Look for alternative lenders, such as a credit union or an online lender. Ask the dealership if there’s a financing department dedicated to working with people with poor credit. Use buy-here, pay-here financing only as a last resort.

Benefits of improving your score to:

380 400 420 445 470 495 520 570 600 640

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