524 credit score: A guide to credit scores
Quick insights
- A 524 credit score is considered poor by FICO® and subprime according to VantageScore® scoring models.
- A credit score of 524 is in the lower category of credit scores for both FICO and VantageScore.
- To help improve a 524 credit score, you can practice healthy financial habits, like checking your credit report for errors, reducing debt and making on-time payments.
A 524 credit score is not considered good according to some major credit scoring models. Lower credit scores may indicate higher risk for lenders, so this could lead to denial of credit or higher interest rates or less favorable terms if you do get approved. What else do you need to know about a 524 credit score? Let’s find out.
Understanding a 524 credit score
A credit score is a three-digit number used to assess a borrower’s creditworthiness. Lenders review credit scores when deciding whom to lend to and under what terms and conditions.
According to Experian™, credit scores typically range from 300 to 850, with 524 falling well below the average U.S. score of 715. Lenders may view scores in the low 500s as higher risk, which can impact loan approvals and interest rates. Factors contributing to a 524 score may include:
- Missed or late payments
- High credit utilization
- Unfavorable debt to income ratio
- Accounts sent to collections
- Limited credit history
Having a 524 credit score can affect your ability to qualify for things like credit cards, loans and rental agreements. That’s why it can be important to have a higher credit score and understand what factors go into credit scoring.
Is 524 a good credit score?
A 524 credit score is classified as poor and subprime according to FICO and VantageScore, respectively.
Borrowers with a score of 524 are more unlikely to qualify for most prime credit products or favorable interest rates. Lenders may also require additional documentation or could deny applications altogether.
A good credit score is generally considered to be 661 or higher according to VantageScore, or 670 or higher according to FICO. Improving your score can open up more financial opportunities and better loan terms.
Is 524 a bad credit score?
A credit score of 524 may signal to lenders that you may have a history of missed payments, defaults or other negative credit events. It could mean you face higher interest rates, larger security deposits or outright denial for credit products. Insurance companies may also use your credit score to determine premiums, so having lower credit scores could also mean you might pay more for insurance.
Chances of approval for a home loan with a 524 credit score
Buying a home with a 524 credit score may be possible, but it may be more challenging than if you had an excellent credit score. Some lenders may require a larger down payment, charge higher interest rates or have stricter loan terms.
Whatever you decide, carefully review and compare different lenders and loan options to find your best fit for your specific circumstances. While important, credit scores are just one of several factors lenders use when approving home loans. In general, some lenders may require a larger down payment, charge higher interest rates or have stricter loan terms for mortgage applicants they may consider in the "good" range.
Chances of approval for an auto loan with a 524 credit score
Buying a car may be possible with a 524 credit score, but different dealerships and lenders may use different credit scoring models and different scales to make their own loan decisions, which could impact your loan terms and approval odds.
Even with a “good” credit score, you may be declined, subject to higher interest rates or need to provide a larger down payment than if you had a higher credit score. To help improve your chances for approval, it is usually beneficial to add a co-signer to the loan—if the lender allows—to share financial responsibility.
All applicants should take note that while important, your credit score is just one of several factors lenders take into account when approving a loan.
How to improve a 524 credit score
There are steps you can take to start working on your credit today. Here are some tips to get your credit score moving in a more positive direction:
- Make payments on time: Payment history is an important factor in your credit score, so be sure not to skimp on this one.
- Review your credit reports: This allows you to check for errors and dispute any inaccuracies with the credit bureaus.
- Lower your credit utilization ratio: You can do this by paying down existing debts and balances. A credit utilization ratio of 30% or below is considered favorable.
- Avoid applying for new credit unless necessary: Hard credit checks can temporarily lower your credit score.
- Consider keeping old credit accounts open: This helps to lengthen your average account age, which is another factor that can help your credit score.
- Monitor your credit: Keeping an eye on your credit score can help you to track your progress and be proactive in fixing any issues. Using a free credit monitoring tool like Chase Credit Journey® can help you to monitor your credit and get updates about your credit.
Remember to be patient. Significant improvement can take several months to a few years, but consistent effort can pay off.
Conclusion
A 524 credit score is not permanent and can be improved with time and effort. You can help improve it by focusing on building positive credit habits and addressing negative marks on your report. Seek professional help if you’re struggling to manage debt or improve your score. You can also consider monitoring your credit to track progress and catch issues early. Credit Journey® can be a free and easy way to do this.
