Are you curious about whether a credit score of 600 is good or bad? Well, you’ve come to the right place! In this article, we’ll dive deep into what a 600 credit score means, the types of loans you can expect to be approved for, and how to improve your credit score. So, grab your favorite beverage, sit back, and let’s get started!
What Does Having a 600 Credit Score Mean?
A 600 credit score falls within the fair credit category, according to FICO Scores, which range from 300 to 850. Lenders might view you as a high-risk borrower, but don’t worry, it doesn’t mean you won’t be approved for certain loans. You just need to prove yourself in other ways.
Factors such as a higher-than-average income, low outstanding debts, and a solid employment history can help lenders look beyond your credit score. However, keep in mind that even if you are approved for a loan with a 600 credit score, it will likely come with higher interest rates compared to someone with a higher credit score.
Which Types of Credit Cards Can You Get with a 600 Credit Score?
While some credit cards with attractive rewards and benefits may be unavailable to you with a 600 credit score, there are still several cards that can help you improve your credit score while offering some perks. Let’s take a look at a couple of them.
Capital One QuicksilverOne Cash Rewards Credit Card
The Capital One QuicksilverOne Cash Rewards Credit Card is one of the best cards available for someone with a 600 credit score. Not only will it give you the opportunity to improve your score, but you’ll also earn an unlimited 1.5% cash back on each purchase. Keep in mind that this card comes with an annual fee.
Capital One Platinum Secured Credit Card
The Capital One Platinum Secured Credit Card is a great option for anyone looking to build or rebuild their credit. With this card, you’ll be required to have a refundable deposit, which will act as your credit limit. The payment history will be reported to credit bureaus, helping with your credit-building efforts. This card also has an annual fee.
OpenSky® Secured Visa® Credit Card
The OpenSky® Secured Visa® Credit Card is another popular secured card for rebuilding credit. The best part is that there is no credit check, so your credit score won’t affect your approval odds. You’ll need to put down a security deposit, which will serve as your credit limit. This card also has an annual fee.
What Will You Get Approved for with a 600 Score?
Other than credit cards, there may be other financial products and needs you’re interested in filling. You may wonder if you’ll qualify with a credit score of 600. Here’s what you need to know.
Loans
Even with a credit score of 600, you may still be approved for auto loans or personal loans. However, be aware that they will cost more than if you had a higher credit score. The interest rates adjust based on your credit score, so the lower your score, the higher the interest rate.
Mortgage
While a credit score of 600 won’t prevent you from getting a mortgage, your options may be limited. Conventional loans typically require a credit score over 620, but FHA loans are available with a 3.5% down payment to anyone with a credit score over 580. These loans require mortgage insurance.
Rentals
Each landlord has different criteria, so some may be willing to lease to someone with a 600 credit score, while others may require a higher score. Having a positive rental history and minimal late payments can improve your chances of securing a rental.
What Will a 600 Score Impact?
A credit score of 600 can have a negative impact on several aspects of your financial life. Here are a couple to keep in mind.
Overall Borrowing Costs
Having a 600 credit score means that loan products will cost you more. Lenders adjust interest rates based on your credit score, so the lower your score, the higher the interest rate. This means you’ll end up paying more to borrow compared to someone with a higher credit score.
Extra Fees
Borrowing with a 600 credit score may also come with additional fees. For example, if you’re applying for an FHA loan, you’ll be required to pay for mortgage insurance. This additional cost wouldn’t be required if you qualified for a conventional loan and made a 20% down payment.
How to Improve Your 600 Credit Score
If you want access to better credit cards and lower rates on loan products, it’s time to focus on improving your credit score. Here are some tips to help you move your credit score from 600 to 700 or higher.
Monitor Your Credit
Start by monitoring your credit and tracking your progress. Request a free copy of your credit report each year from Experian, TransUnion, and Equifax. Check for errors and dispute any inaccurate information. Once you have verified the information, look closely at what’s affecting your score and take steps to address it.
Make Use of Budgeting Apps
Ensure your spending stays within your means by using budgeting apps. Tools like Monarch Money and Simplifi help you track and understand your expenses, preventing overspending and credit card debt.
Set Up Automatic Payments
Late payments can negatively impact your credit score. Avoid this by setting up automatic bill payments. Most credit cards and payment apps offer this feature, allowing you to pay the full balance, statement balance, or minimum payment each month.
Ask for Higher Credit Limits
Keep your credit utilization low by asking your card issuer for a credit limit increase. This helps lower your credit utilization ratio, which is the amount of credit you’re using compared to your credit limit. However, be cautious of hard inquiries that could temporarily lower your score.
Get Credit for Utility Payments
Typically, utility payments are not reported to credit bureaus. However, services like Experian Boost can give you credit for on-time payments for services such as cable, streaming, cellphone, utilities, and even rent. Just remember that only lenders pulling your Experian credit report will see the positive effects.
Time Stamp: Having a 600 Score Will Cost You
Having a credit score of 600 isn’t ideal, but it’s still possible to get a loan or credit card. However, most loan products will cost you more due to higher interest rates. With some hard work and dedication, you can improve your credit score and open up new, more attractive options.
Frequently Asked Questions (FAQs)
What Percent of Americans Have a 600 Credit Score?
Approximately 17% of Americans have a fair credit score falling within the range of 580 to 669.
Is Having a 600 Credit Score Good?
A credit score of 600 is considered fair. Scores ranging from 670 to 739 are considered good.
How Fast Can You Raise Your Credit?
If you have a 600 credit score, you can raise it faster than someone with a 700 credit score. Make sure to pay your bills on time and keep your credit card balance low to see improvements.
How Can I Go from a 600 Credit Score to 800?
To go from a 600 credit score to 800, consistently pay your bills on time and maintain a low credit utilization ratio.
That’s a wrap! Now you know the ins and outs of having a 600 credit score. Remember, improvement is possible, so keep working on raising that score. For more helpful personal finance tips, visit Personal Finances Blog. Stay financially savvy, my friends!