What Is a Bad Credit Score? Ranges, Causes and How to Improve It

Your credit score is one of the biggest factors lenders use when deciding whether to approve you for a loan or credit card. It can also affect the interest rate you receive and, in some cases, whether you’re approved to rent an apartment.

If your score is lower than you’d like, you’re not alone. Credit scores change over time, and many people improve them by building healthy financial habits. The first step is understanding what your score means and what you can do to strengthen it.

What is a bad credit score?

A bad credit score is generally a score that’s lower than 580 for FICO^® or below 600 for VantageScore^®. Having a lower score doesn’t automatically mean you won’t qualify for credit, but it could limit your borrowing options or lead to higher interest rates.

There’s no single definition of a bad credit score because different credit score companies use different scoring systems. The two most common are FICO^® Score and VantageScore^®. Both use a scale from 300 to 850, but they group scores into different rating categories.

Understanding where your score falls can help you better understand your borrowing options and decide what steps to take next.

Bad credit score ranges for FICO^® and VantageScore^®.

There’s no single definition of a bad credit score because the two most common credit scoring models use different rating systems. Here’s a side-by-side look at the two rating models, with “bad” credit scores typically falling in a range that’s 580 or below for FICO®, and 600 or lower for VantageScore®.

Here’s how the two scoring models compare:

FICO® Rating	FICO® Score	VantageScore® Tier	VantageScore® Score
Poor	Below 580	Subprime	300 – 600
Fair	580 – 669	Near Prime	601 – 660
Good	670 – 739	Prime	661 – 780
Very Good	740 – 799	N/A	—
Exceptional	800 – 850	Superprime	781 – 850

Sources: FICO^® (Fair Isaac Corporation) and VantageScore^® credit score ranges.

FICO^® Score Ranges

FICO^® Scores are the credit scores most lenders use when reviewing loan applications. If your FICO^® Score is below 580, it’s generally considered to be a poor credit score. Scores from 580 to 669 fall into the fair credit score range, while scores from 670 to 739 are considered good.

A score of 740 or higher is generally viewed more favorably. While a higher score doesn’t guarantee approval, it may help you qualify for more borrowing options or better loan terms.

VantageScore^® Ranges

VantageScore^® uses four rating tiers: subprime, near prime, prime and superprime. Although the names are different from FICO, the goal is the same—to help lenders understand how you’ve managed credit in the past.

Because FICO^® and VantageScore^® use different formulas, it’s normal for your scores to be slightly different. Seeing two different scores doesn’t necessarily mean there’s a problem with your credit report.

Is a 600, 650 or 700 credit score bad?

Whether a score is considered bad depends on which scoring model you’re looking at. Here’s how these three common credit scores generally compare.

Is a 600 credit score bad? Sometimes. A 600 credit score is generally considered fair under the FICO^® model. Under VantageScore^®, it falls at the top of the subprime range.

That means you may still qualify for some loans or credit cards, but you might have fewer choices or receive higher interest rates than someone with a higher score. If your score is around 600, improving your payment history and lowering your credit card balances may help over time.

Is a 650 credit score bad? A 650 credit score is generally considered fair under both scoring systems. It’s not usually considered bad, but it’s below the range that’s typically considered good credit.

Some lenders may approve borrowers with a 650 credit score, while others may offer different loan terms based on factors like income, debt and employment history.

Is a 700 credit score bad? No. A 700 credit score is generally considered good under both FICO^® and VantageScore^®.

A score in this range often shows you’ve developed healthy credit habits, such as making payments on time and keeping debt at manageable levels. While a 700 score doesn’t guarantee approval, it may give you access to more borrowing options than a lower score.

What makes up your credit score?

Your credit score is based on how you’ve used credit over time. Credit score companies look at several parts of your credit history to estimate your creditworthiness, or in other words, how likely you are to repay what you borrow. Your payment history, along with your credit utilization are generally the two biggest factors.

Payment history. Consistently making on-time payments is the best way to build and maintain good credit, and it demonstrates your ability to use credit responsibly.

Credit utilization. Your credit utilization ratio looks at the amount of credit you have available and compares that to your amounts owed (how much of your available credit you’re using). For example, if your credit card has a $1,000 limit and your balance is $300, your credit utilization is 30%. In general, using less of your available credit is better than using most of it.

Credit mix. Your credit mix takes into account the different types of credit you use and whether it’s revolving credit or fixed loan amounts.

Length of credit history. This covers the length of time you’ve had your credit accounts.

Other factors, like how often you apply for new credit can also influence your credit score.

The exact formulas used by FICO^® and VantageScore^® aren’t public, and each model weighs these factors a little differently. So building healthy credit habits can help strengthen your score, no matter which model a lender uses.

What causes a bad credit score?

A bad credit score is usually the result of several factors, not just one mistake. Understanding what’s affecting your score can help you decide where to focus your efforts.

Late or missed payments. Payment history has a big impact on your credit score. Late payments, especially those over 30 days, and missed payments can quickly lower your score for some time.

High credit utilization. Using a large portion of your available credit (typically over 30%) can affect your score by raising your credit utilization ratio, even if you’re making your payments on time.

Limited credit history. Having a short or nonexistent length of credit history can also result in a low score, as lenders have less information to predict your behavior as a borrower.

Hard credit inquiries. Applying for credit too often can result in frequent hard inquiries, which can lower your score temporarily. Multiple hard inquiries in a short period may suggest financial instability to lenders.

Debt collections or bankruptcy. Major financial setbacks like debt collections, foreclosures or bankruptcy filings can severely impact your credit score, making it fall into the poor range.

It’s also worth knowing that a lower credit score doesn’t always mean someone has managed credit poorly. If you’re new to credit, you may not have enough credit history to earn a higher score yet. In other cases, mistakes on your credit report could affect your score until they’re corrected.

Why a bad credit score matters.

A bad credit score can make borrowing more difficult, which can have a ripple effect on your financial life. In some situations, your credit history may be reviewed for reasons beyond borrowing.

Higher interest rates. Lenders view a low score as a sign of risk, which means they’re likely to charge higher interest rates on loans or credit cards.

Loan and credit card rejections. Many lenders use credit scores to help decide whether to approve your application, including everything from home mortgages to personal loans and credit cards. You may qualify for bad credit loans or no credit check loans, though they may also use your credit score to determine your interest rate, your credit limit or how much you’re allowed to borrow.

Employment challenges. Some employers perform credit checks as part of the hiring process. A low score can affect your eligibility for positions, particularly in finance or jobs that involve handling sensitive information.

Difficulty renting an apartment. Many landlords check credit scores before approving rental applications. Renting an apartment with bad credit can limit your housing options or require you to pay a higher security deposit.

Auto financing and insurance. In some states, for example, insurance companies and car dealers may also use credit information when setting insurance premiums or auto loans. Bad credit can make it more challenging to buy a car, lease a vehicle or refinance a car loan.

While a lower credit score can create challenges, it doesn’t have to define your financial future. As you build stronger credit habits, your score can change over time.

How to check your credit score.

There are several ways to check your credit score. Here are a few ways to get started:

1. Ask your bank or lender.

Many banks, credit card companies and personal finance apps offer free credit scores to their customers. Start by checking with your existing lenders to see if they offer this service.

2. Request your free report from AnnualCreditReport.com

You can also get copies of your credit report from the three major credit bureaus (Experian, TransUnion and Equifax) via annualcreditreport.com. Request a report from all 3 major credit bureaus at once, or order one report at a time. By ordering your reports separately (one every four months), you can monitor your credit report throughout the year.

3. Request additional copies under special circumstances.

You may qualify for additional copies of your report if you suspect fraudulent activity on your account, receive public welfare benefits or were denied employment, credit, insurance or received an ‘adverse action’. While your credit report doesn’t always include your credit score, it shows the information used to calculate it. Reviewing your reports regularly can help you find mistakes, watch for signs of identity theft and make sure your information is accurate.

If you’re checking your own credit score, you generally don’t have to worry about hurting it. This is called a soft inquiry, and it doesn’t affect your score. That’s different from a hard inquiry, which may happen when you apply for new credit.

What is a good credit score?

A good credit score generally starts at 670 under the FICO^® scoring model. VantageScore^® uses different rating names, but in both systems, higher scores usually show that you’ve developed healthy credit habits over time.

A good credit score may give you access to more borrowing options or better loan terms. However, your credit score is only one part of the picture. Lenders may also look at your income, monthly debt payments and other financial information before making a decision.

If your score isn’t where you’d like it to be today, don’t get discouraged. Credit scores are designed to change over time, and small steps can make a difference. Making your payments on time, paying down credit card balances and reviewing your credit reports regularly can all help you build stronger credit habits.

How to improve a bad credit score.

Improving a bad credit score takes time, but small, consistent changes can make a difference. There’s no quick fix, but focusing on the habits that matter most can help you build stronger credit over time.

Make your payments on time.

Making your payments on time is one of the best things you can do for your credit score. Since payment history is one of the biggest factors used by credit scoring companies, even a few missed payments can have a lasting impact.

If it’s hard to keep track of due dates, consider setting up automatic payments or calendar reminders. Paying at least the minimum amount due each month can help you avoid late payments and keep your accounts in good standing.

Lower your credit card balances.

Another important step is lowering your credit card balances. This can reduce your credit utilization ratio, which is the percentage of your available credit you’re using.

For example, if your credit card has a $2,000 limit and your balance is $1,600, you’re using 80% of your available credit. Paying that balance down lowers your utilization, which may help improve your score over time.

If you can’t pay off your balance all at once, paying more than the minimum whenever possible can still help you make steady progress.

Check your credit report for errors.

Mistakes on your credit report can happen. That’s why it’s a good idea to review your credit reports regularly.

Look for incorrect account balances, payments that were reported late by mistake or accounts that don’t belong to you. If you find an error, you can file a dispute with the credit bureau that reported it. Correcting inaccurate information may improve your credit if the error affected your score.

Be careful about applying for new credit.

Every time you apply for a loan or credit card, the lender may perform a hard inquiry. A single hard inquiry usually has only a small effect, but applying for several new accounts within a short period may lower your score temporarily.

Before applying for new credit, think about whether you really need it. Spacing out applications can help protect your score.

Keep older accounts open when it makes sense.

The length of your credit history is another factor that can affect your score. In some cases, keeping older credit card accounts open may help because they add to the average age of your accounts.

However, every situation is different. If an older account has a high annual fee or no longer fits your needs, closing it may still be the right choice. Consider the benefits and costs before making a decision.

How long does it take to improve bad credit?

The time it takes to improve a bad credit score depends on what’s affecting it in the first place. If high credit card balances are the main issue, paying them down may lead to improvements after your lenders report updated balances. Other situations, such as missed payments or accounts in collections, may take longer to recover from.

The important thing is to stay consistent. Making payments on time, keeping your credit card balances low and checking your credit reports regularly can all help you move in the right direction.

What’s the fastest way to improve a bad credit score?

The fastest way to improve a bad credit score is usually to focus on the factors that have the biggest impact. Making every payment on time and paying down high credit card balances are two of the most effective steps you can take.

If your credit report contains inaccurate information, disputing those errors may also help once they’re corrected. While some people notice changes within a few months, rebuilding credit often takes longer, especially after missed payments or accounts in collections.

Final Thoughts

A bad credit score can make borrowing more challenging, but it doesn’t have to stay that way. Understanding what affects your score is the first step toward making positive changes.

Whether you’re just starting to build credit or working to improve your score after a setback, focus on the habits you can control. Making your payments on time, keeping credit card balances low and checking your credit reports regularly can all help you build stronger credit.

While you may not see results overnight, staying consistent with healthy financial habits can make a meaningful difference in the long run.

DISCLAIMER: This content is for informational purposes only and should not be considered financial, investment, tax or legal advice.