520 credit score: A guide to credit scores
Quick insights
- A credit score of 520 is in the lowest category of credit scores for both FICO® and VantageScore®.
- A 520 credit score is considered poor by FICO and subprime by VantageScore.
- To help improve a 520 credit score, you can check your credit report for errors, reduce debt and make on-time payments.
A 520 credit score is considered poor and subprime by FICO and VantageScore, respectively. This could affect your access to credit or financial products, as well as the terms and conditions you’re granted if you do qualify. What else is there to know about a 520 credit score and how it can affect your financial future? Let’s dive in.
What does a 520 credit score mean?
Credit score ranges generally go from 300 to 850, and a score of 520 falls below the national average of 715, according to Experian™.
Lenders may see a 520 credit score as a sign of higher credit risk, because it means you may have a history of missed payments, defaulted loans or high credit utilization. This score can also result from late payments, collections, bankruptcy or having very little credit history.
Having a credit score of 520 may not help your access to loans, credit cards and favorable interest rates. Understanding what factors contribute to a 520 credit score is the first step toward improving your credit.
Is 520 a good credit score?
With a 520 credit score, you are less likely to qualify for loans or credit cards. If you do get approved, you’ll likely face higher interest rates, large deposits or stricter terms.
A 520 credit score can also affect your ability to rent an apartment, get a cell phone or insurance or secure certain jobs.
Is 520 a bad credit score?
This score may indicate a history of financial missteps or a lack of positive credit history. Because of this, lenders may see you as a high-risk borrower, which can lead to denials or unfavorable loan terms. Insurance companies may also charge higher premiums if you have a low credit score.
Understanding the factors that influence your score can be a useful step toward making potential improvements.
What are my chances of approval with a 520 credit score?
Approval odds for traditional credit cards and loans are lower with a 520 credit score. Getting approved for rental housing may also have different requirements, like a larger security deposit or a guarantor.
Improving your credit score can help increase your chances of approval and also potentially grant you access to better financial products.
How do I improve my 520 credit score?
There are some things you can do to start getting your credit moving in a more positive direction. Here’s a list of steps you can take:
- Review your credit reports: This allows you to check for errors and dispute any inaccuracies with the credit bureaus.
- Make all your payments on time: This step is important since your payment history plays a key role in determining your credit score.
- Lower your credit utilization ratio: You can do this by paying down existing debt, especially high credit card balances. A credit utilization ratio is favorable at about 30% or lower.
- Avoid applying for new credit unless necessary: That’s because hard credit checks can temporarily lower your score.
- Consider keeping old credit accounts open: This may help lengthen your average account age, which can help your credit score.
- Monitor your credit: Keeping an eye on your credit score regularly can help you to track your progress and be more proactive. Using a free credit monitoring tool like Chase Credit Journey® can help you to monitor your credit and get updates about your credit.
Don’t forget to be patient—credit score improvements can take several months to a few years, depending on your starting point. Just get started and keep going.
Conclusion
It can help to understand that a 520 credit score is not permanent and can be improved with consistent effort. Focus on building positive credit habits, such as paying bills on time and reducing debt. Seek professional financial advice if you need.
Stay motivated by tracking your progress and celebrating small improvements along the way. And remember, raising your 520 credit score is achievable with time, discipline and helpful strategies.
