560 credit score: A guide to credit scores
Quick insights
- A 560 credit score is considered poor or subprime depending on the scoring model used; this score may limit access to credit or result in less favorable loan terms.
- To improve a 560 credit score, you may want to focus on correcting errors in your credit report, making timely payments and reducing overall debt.
- A higher credit score can lead to better loan options and lower interest rates, potentially saving you money over time.
A credit score of 560 is considered subprime by FICO® and poor by VantageScore®. This score can affect your ability to secure loans and the terms you're offered. What else is there to know? Let's find out.
Understanding a 560 credit score
Understanding credit scores and what goes into them can be helpful for making informed financial decisions. A credit score is a three-digit number that lenders use to rate a consumer's creditworthiness. It helps lenders know how likely you are to pay back a loan on time.
Most credit scoring models, such as FICO and VantageScore, range from 300 to 850. A score of 560 indicates that you may have had some issues with credit in the past, such as late payments or high credit utilization.
Here’s a full breakdown of scoring ranges according to FICO and VantageScore as of 2024:
VantageScore 3
- Superprime: 781-850
- Prime: 661-780
- Near prime: 601-660
- Subprime: 300-600
FICO Score 8
- Exceptional: 800-850
- Very good: 740-799
- Good: 670-739
- Fair: 580-669
- Poor: 300-579
If you’re wondering what your credit score is, you can find out by enrolling in Chase Credit Journey®, a free online tool anyone—including non-Chase card members—can use.
Factors contributing to a 560 credit score
Several factors make up your credit score, including:
- Payment history
- Credit utilization
- Length of credit history
- Credit mix
- New credit checks
A 560 credit score could suggest that there may be some negative marks on your credit report, such as late payments. You may want to review your credit report to identify areas for improvement.
Payment history accounts for a significant portion of your credit score, so making timely payments can be an important area to focus on. High credit utilization or carrying large balances on your credit cards can also negatively impact your score.
Chances of loan approval with a 560 credit score
Lenders may view borrowers with lower credit scores as higher risk. So while getting approved for a loan with a 560 credit score is possible, it could result in higher interest rates or less favorable terms. For instance, if you're applying for a home loan with a 560 credit score, you may face stricter requirements or higher interest rates.
You can consider alternative loan options or work on improving your credit score before applying.
Factors affecting loan approval
While your credit score plays a role in loan approval, it's not the only factor. Lenders also consider your income, debt-to-income (DTI) ratio and overall credit history.
Your income and DTI ratio can impact your loan approval chances. Lenders want to ensure that you have a stable income and can afford to repay the loan. A lower debt-to-income ratio may improve your chances of approval.
Additionally, lenders may review your credit report and credit history. Before applying for a loan, you may want to address issues on your credit report for better chances of approval and more ideal terms and conditions.
Improving your 560 credit score
Improving your credit score takes time and effort, but it's achievable. Here are some steps you can take to work toward improving your credit score:
- Check your credit report regularly for errors or inaccuracies: There might be errors in your report affecting your score, so if you dispute them and get them removed you may help improve your score.
- Make timely payments: Payment history is a big part of what makes up your credit score, so you may want to set up payment reminders or automate your payments to ensure you don’t miss a payment.
- Reduce debt and manage credit utilization effectively: You may want to focus on paying down high-interest debt and keeping your credit utilization ratio below 30%, which is what the Consumer Financial Protection Bureau recommends.
- Build a longer credit history and diversify your credit mix: Having a longer credit history and a mix of credit types can contribute to a higher credit score. You may want to consider keeping old accounts open and active as well.
- Avoid applying for too much new credit: Hard credit checks can temporarily hurt your credit score. Try not to apply for credit you don't need.
You can view your credit report provided by Experian when you enroll in Credit Journey®, a free online tool where you can keep track of your credit score. Also, the score improvement feature powered by Experian in Credit Journey provides you with steps you can take to help improve your score.
In summary
A 560 credit score is considered poor or subprime by some credit scoring models and may limit your access to credit or result in less favorable loan terms. To help improve your credit score, you may want to focus on correcting errors in your credit report, making timely payments and reducing debt.
By understanding the factors that contribute to your credit score and taking steps to improve it, you can work toward achieving a stronger financial future.
