500 credit score: A guide to credit scores
Quick insights
- A 500 credit score is considered poor according to FICO® and subprime according to VantageScore®.
- A credit score of 500 is in the lower category of credit scores for both FICO and VantageScore.
- To help improve a 500 credit score, you can check your credit report for errors, reduce debt and make on-time payments.
What does a 500 credit score mean?
A 500 credit score is considered low some credit scoring models. FICO classifies a score of 500 as poor, while VantageScore labels it subprime. It’s in the lowest category for both scoring models.
Credit scores typically range from 300 to 850, with 500 falling well below the U.S. average score of 715.
Lenders may see a credit score of 500 as a sign of higher credit risk, meaning you may have a history of missed payments, defaults or high credit utilization. This score could be the result of negative marks such as late payments, collections or bankruptcies. Having a 500 credit score can lower the chances of approval for credit products, such as loans, credit cards and more.
The first step toward credit score improvement is understanding what factors contribute to credit scores—once you understand this, you can get to work improving yours.
Is 500 a good credit score?
A 500 is classified as poor or subprime by most scoring models. With a 500 credit score, you’re unlikely to qualify for most unsecured credit cards or traditional loans. If you do get approved, you’ll likely face higher interest rates and stricter terms.
A 500 credit score can also impact your ability to rent an apartment or land certain jobs as potential landlords and employers may take your score into account. Improving your credit score can open up better financial opportunities.
Is 500 a bad credit score?
A low score may indicate a history of financial missteps, such as missed payments, defaulted loans or high debt levels.
Having a low credit score can make it difficult to qualify for new credit, and if approved, you may face unfavorable terms. Insurance companies may charge higher premiums and landlords may require larger security deposits.
A low credit score can also affect your ability to negotiate better rates or terms on loans and credit cards. That’s why it can be important to understand what factors are causing a low credit score and take steps to improve it.
What are my chances of approval with a 500 credit score?
Approval odds for loans and credit cards are low with a 500 credit score, especially for unsecured credit products. Some lenders may require a co-signer or collateral to offset the risk of lending to someone with a low score. Government-backed loans, like FHA mortgages, may have lower credit requirements, but approval is not guaranteed. Even if approved, expect to pay higher interest rates, larger down payments and face stricter repayment terms.
How do I improve my 500 credit score?
There are many things you can do to start improving your credit score. Here are some ideas and tips to get you started:
- Pay all bills on time, as payment history is an important factor in your credit score.
- Reduce your credit card balances and keep your credit utilization below 30% of your total available credit.
- Check your credit reports for errors or inaccuracies and dispute any incorrect information with the credit bureaus.
- Monitor your credit score regularly to help you to track your progress and be more proactive. Using a free tool like Chase Credit Journey® can help you to monitor your credit and get important updates about your credit.
Be patient and consistent—improving your credit score takes time, but responsible financial habits will lead to long-term gains.
Conclusion
A 500 credit score is not the end of your financial journey—improvement is possible with patience and persistence. You may want to focus on building positive credit habits, such as making payments on time and reducing debt. You can also monitor your credit regularly to track your progress and catch any errors early. Credit Journey® might be one free way to do just that.
Taking action today may lead to better financial opportunities and greater peace of mind in the future.
