Your 600 credit score is one of the most important numbers in your life. It can determine whether or not you get approved for a loan, and it can also affect your interest rates. So, how good or bad is a 600 credit score?
Let’s get started to understand what it means, what you can get with a 600 credit score and how to improve it.
17% of all consumers have credit scores that are considered to be in the fair range.
There is no one answer to whether 600 is a good credit score. This is because different people have different opinions on what is considered a "good" credit score. Some people may consider any score above 600 to be good, while others may only consider a score of 700 or higher to be good.
If you have a 600 credit score, it means that you have some work to do in order to improve your creditworthiness. A score of 600 is considered to be on the lower end of the "fair" credit score range (580-669). This means that lenders may be more hesitant to approve you for a loan or extend you a line of credit. If you're looking to improve your credit score, there are a few things you can do.
83% of U.S. consumers have a credit score that is higher than 600, according to Experian data.
While a 600 credit score isn't the worst that it could be, it's still not particularly good. You may have a hard time getting approved for a loan or credit card with a score like this. If you're able to get approved, you're likely to face high-interest rates and fees.
It's worth taking some time to improve your credit score before applying for any new credit. It is not that hard to get to a 650 credit score actually. There are a few things you can do to help improve your score, like paying your bills on time, maintaining a good credit history, and using a mix of different types of credit.
For 39% of Americans with a FICO Score of 600, their credit reports include missed payments that were 30 days past due.
|Item||Does 600 credit score qualifies?|
|No annual fee credit card||Yes|
|Credit card with 0% financing||Yes|
|Favorite store’s credit card||Yes|
|No-foreign-fee credit card||Yes|
|Airline/Hotel credit card||No|
|Initial credit card bonus||No|
|Any credit card||No|
The average credit card debt among consumers with a FICO® Score of 600 is $5,934.
The credit score is based on the credit history that is recorded in the credit file. The credit score is a summary of how credit and bill payments have been handled in the past. Depending on where you stand, a 600 credit score can be slightly improved or worsened. Every additional point can make a difference. Higher credit scores come from good credit habits while lower credit scores come from bad or erratic habits. The following is a more detailed explanation of the specific factors that influence the FICO credit score:
Public Information: If you have any bankruptcies or other public records on your credit report, it could have a seriously negative effect on your credit score.
Payment history: Missing payments or having a delinquent account can negatively impact your credit score. Conversely, if you have a history of paying your bills on time, this will help improve your credit score. This is fairly straightforward and is the primary factor influencing your credit score, accounting for up to 35% of your FICO® Score.
Credit usage rate: The credit utilization ratio is calculated by adding the balances of all revolving credit accounts and dividing them by the total credit limit. So, if there is $4000 owed on credit cards with a total limit of $10,000, then the credit utilization rate would be 40%. It is common knowledge that having a maxed-out credit limit will reflect poorly on a credit score, but what many people do not know is that it is recommended to keep the utilization ratio below 30% to maintain a good credit score. In fact, credit usage makes up for about 30% of a FICO® Score.
Length of credit history: Length of credit history is a significant factor in your FICO® Score, up to 15%. So, if you're new to credit, there are things you can do to establish a good track record, like avoiding bad habits and making timely payments. Good credit decisions also help improve your score.
Total debt and credit: The FICO Score looks favorably on individuals who have a mix of different types of credit, including installment loans and revolving credit. The credit mix makes up 10% of the FICO Score.
Recent applications: When you apply for a loan or credit card, the lender requests your credit score from the credit reporting agency, which is considered a hard inquiry. A hard inquiry can lower your credit score temporarily. As long as you continue to make on-time payments, your credit score should rebound quickly from the effects of hard inquiries. (Checking your own credit is a soft inquiry and does not impact your credit score.) Recent credit applications can account for up to 10% of your FICO® Score.
The average credit consumption rate for people with FICO credit scores of 600 is 78.2%.
It's not as difficult as you might think to improve your credit score, especially if you're starting with a low score. There are a few key things you can do to start rebuilding your credit. By following these tips, you can start to improve your credit score and rebuild your credit history.
Seek a secured credit card: A secured credit card could be really beneficial for your credit score, even if you don't qualify for a traditional one. You just have to check if the lender reports the activity to credit bureaus, then put down a deposit in the full amount of the spending limit—which is usually just a few hundred dollars. When you use the card regularly and make payments on time, that will all be reflected in your credit files. As long as you don't go over 30% usage and you're consistent with monthly payments, this will help you build stronger credit.
Consider a credit-builder loan: Credit-builder loans are a great way to improve your credit profile. The credit union places the money you've borrowed in a savings account that generates interest, and once you've paid off the loan, you get the cash and the interest it has accrued. The credit union reports your payments to the national credit bureaus, which can lead to credit-score improvements. Make sure to check with the lender to make sure they report activity to all three national credit bureaus before applying for a credit-builder loan.
Consider a debt-management plan: If you are struggling to keep up with credit payments, a debt-management plan (DMP) may be a helpful option. You would work with an authorized credit-counseling agency to negotiate a manageable repayment schedule, and all your credit accounts would be effectively closed in the process. Although this is a major step that could damage your credit score in the short term, it is less damaging than bankruptcy and could eventually give you a chance to rebuild your credit. Even if a DMP is not right for you, a good non-profit credit counselor (as opposed to a credit-repair company) could help you find strategies for building your credit.
Pay your bills on time: If you want to improve your credit score, the best thing you can do is bring any overdue accounts up to date and avoid making late payments in the future. To help remind yourself to pay bills on time, you can use automatic payments, set calendar reminders, or write yourself notes and place them where you'll see them. With a little bit of effort, you'll be able to develop habits that will lead to a higher credit score.
Avoid high credit utilization rates: Try to keep your balances low. Another important factor that affects your credit score is your "credit utilization ratio." This is the percentage of your available credit that you use at a given time. The lower this number is, the better it will be for your score. Credit utilization, or debt usage, makes up for around 30% of the FICO® Score. If you want to avoid lowering your score, keep the utilization rate below 30%.
Evaluate your credit report: I would recommend checking your credit report often. You are allowed to have one free report from each of the three primary credit reporting agencies once a year. Make sure to double-check if there are any errors that could possibly lower your score for no reason. Get your credit report and take note of anything negative that could be bringing down your 600 score.
Dispute negative items: Review your credit report for any errors and inaccuracies. If you find any negative items, you can send a dispute letter to the credit bureau requesting that they remove the item from your report.
Seek professional help. If you're still struggling to get control of your debt, there are professional organizations that can help, such as credit counseling services or financial advisors.
Use a mix of different types of credit, such as revolving credit and installment loans.
It's a good idea to sign up for a credit monitoring service so you can keep track of your progress and spot any potential issues early on.
Keep old accounts open even if you don't use them often.
Limit new applications for credit.
A 600 FICO® Score is a good starting point for building a better credit score. You can get there by paying your bills on time, maintaining a good credit history, and using credit responsibly. It may take some time and effort, but it's worth it to have a good credit score.
Share this article