What is a bad credit score?
Credit scores are three-digit numbers that are divided into ranges from poor to excellent. These scores are used by creditors and lenders to assess your creditworthiness and how risky you are as a borrower. Credit scores are set by FICO and VantageScore, the two main credit rating agencies.
A bad credit score is a VantageScore below 601 or a FICO score below 580.
A bad credit score under the VantageScore rating system is known as “Subprime” and ranges from 300 to 600. Under the FICO model, a credit score labeled as “Poor” ranges from 300 to 579.
Credit score ranges
VantageScore 3.0, VantageScore 4.0 and the newer VantageScore 4 Plus are the models most widely used by lenders today. Each uses a scale of 300 to 850 with categories ranging from Subprime to Superprime.
FICO also uses a 300 to 850 range and divides scores into five categories: Poor, Fair, Good, Very Good and Exceptional.
Although both systems use similar scales, their category cutoffs differ slightly. To get out of the bad credit range, you need at least a 580 FICO score or 601 VantageScore.
Here’s how the ranges break down for each:
VantageScore 3.0, 4.0 and 4 Plus
- 781 to 850: Superprime (excellent)
- 661 to 780: Prime (good)
- 601 to 660: Near prime (fair)
- 300 to 600: Subprime (poor)
FICO score (base model)
- 800 to 850: Exceptional
- 740 to 799: Very good
- 670 to 739: Good
- 580 to 669: Fair
- 300 to 579: Poor
» MORE: How to check your credit score
What causes a bad credit score?
Credit scores are measured by specific criteria, with slight weighting variations between VantageScore and FICO. Bad credit scores are caused by any combination of the following, from missed payments to high credit utilization.
Payment history
Payment history is the most important factor in your credit score, making up 35% of the FICO score and 41% of the VantageScore. If you miss a payment and it becomes over 30 days late (or more), it will be reported to the credit bureaus and can have a massive impact on your score.
Utilization/available credit
Credit utilization is how much credit you have used versus your total available credit. It is usually expressed as a percentage. For example, if you have a line of credit worth $50,000 and have used $20,000 of it, your credit utilization ratio is 40%. The lower your utilization ratio, the better.
Length of credit history/age of credit
Your credit history measures how long you have had credit accounts open and the average age of all credit accounts combined. Having a longer credit history shows lenders that you can be trusted when borrowing.
Credit mix
Your credit mix refers to the combination of various types of credit accounts you have opened. This can include credit cards, personal loans, mortgages and even utility bills. Having a good mix of accounts can improve your score.
New credit
New credit tracks how many accounts you have opened and can hurt your score if you open too many accounts in a short amount of time.
Amounts owed/balances
Credit balances (or amounts owed) are a measure of your overall debt levels. Having too much debt compared to your income can negatively impact your credit score, and keeping balances on your revolving accounts increases your overall credit utilization.
VantageScore vs. FICO credit score criteria
Here’s how much each VantageScore factor affects your credit with this agency.
VantageScore criteria
| Factor | Weight |
|---|---|
| Payment history | 41% |
| Utilization | 20% |
| Age and mix | 20% |
| New credit | 11% |
| Balances | 6% |
| Available credit | 2% |
FICO score criteria
Here’s how much each FICO factor affects your credit with this agency.
| Factor | Weight |
|---|---|
| Payment history | 35% |
| Amounts owed | 30% |
| Length of credit history | 15% |
| New credit | 10% |
| Credit mix | 10% |
Consequences of bad credit
Ashley Morgan, a bankruptcy attorney and founder of Ashley F. Morgan Law, PC, is very familiar with the negative consequences of bad credit.
“On the most basic level, credit is a standard way of helping creditors and businesses determine how likely someone is to meet their financial obligations,” said Morgan. “Our society is based heavily on credit. Having bad credit or no credit can make things more expensive and more difficult.”
For instance, having poor credit can mean larger deposits for rentals and utilities, and borrowing money often comes with higher costs, including elevated interest rates on car loans.
Our society is based heavily on credit. Having bad credit or no credit can make things more expensive and more difficult.”
Here are some more consequences of having bad credit:
- Limited housing options: A landlord may not trust you to pay your rent, and mortgage lenders may not trust you to make your mortgage payments. You may also need to provide a higher down payment when buying a home or a larger deposit when renting.
- Higher interest rates: If you have a bad credit score, you’ll most likely pay higher interest rates on loans and other debts. This means you’ll pay more over the life of the loan.
- Loan denial: With a low credit score, you may not qualify for a loan at all. That means you might not be able to buy a car, or even a cellphone, on a payment plan. Many lenders have a minimum credit score requirement to qualify for certain loans. For example, FHA mortgages require a minimum 580 credit score to qualify with a 3.5% down payment.
- Higher insurance premiums: Some insurance companies will check your credit score to qualify you for a policy. If you have a poor credit score, you might end up paying higher insurance rates because you are seen as a riskier person to insure.
- Fewer credit card options: Rewards credit cards offer welcome bonuses and travel perks, but they are reserved for applicants with high credit scores. With a low score, you might only be able to qualify for a secured credit card with a low borrowing limit.
How to improve bad credit
Having a bad credit score doesn’t have to be forever. Here are a few things you can do right away to start improving your score.
Check your credit report
The first step to improving your credit score is checking your credit report with the three major bureaus: Experian, Equifax and TransUnion. All offer one free report each week.
The easiest way to pull all three reports at once is to use AnnualCreditReport.com, or you can use a credit reporting company to do it for you (these companies also often include services such as identity theft monitoring). Search for discrepancies on your profile and work with the bureau or creditor to get it resolved.
This is what ConsumerAffairs reviewer Shalonda in New Jersey did, with success: “When I signed up for Experian to see what was on my report, my credit score was at a 515 and I had quite a few negative items. After paying off some things and disputing items my score went up significantly. I was able to get approved for the suggested credit cards and within 60 days my score went up over 150 points and all negative items were successfully removed.”
Become an authorized user on a credit card
Keep in mind that the primary holder remains responsible for the card, so only use what you can pay back; otherwise, their credit score will get dinged.
Most credit cards allow borrowers to add an authorized user. If you have a spouse, family member or trusted friend, you can get added to their card and start using it to build your own credit.
Use a secured credit card
A secured credit card is a type of credit card designed for individuals with bad credit or no credit history. Morgan recommends opening one, especially if you have no credit history.
“Even with little to no credit, nearly every bank will allow someone to open a secured credit card,” said Morgan. “Basically, you give the bank a deposit to serve as collateral and then they give you a credit card. There is little to no risk because the deposit protects the bank if you default. There are also now some debit cards that will report to credit bureaus.”
Getting a secured card is a tactic a reviewer in North Carolina used. Within eight months, they were able to upgrade to an unsecured card, explaining, “I paid the balance every month … I used less than 10% of the credit limit each month, too. Significantly increased my credit score.”
Pay your bills on time
Since payment history is the most important factor in your credit score, ensuring you pay all your bills on time can have a big impact. If you’ve been missing payments, try setting up your bills as autopay to make sure they are paid on time each month.
Pay off your debts
If you have high-interest debt or are behind on any payments, putting together a plan to catch up and pay off those bad debts can drastically increase your credit score.
“A common misconception is that you have to have debt to have credit; this is incorrect,” said Morgan. “You need credit accounts, but you do not necessarily need to owe money.”
Work with a credit repair company
Credit repair companies help you remove inaccurate information from your credit report and put together a plan to improve your score. This may include debt negotiation, credit monitoring and debt consolidation.
A ConsumerAffairs reviewer in New Jersey used a credit repair company to remove inaccurate marks and found it helpful to have the company as an ally: “I have never had someone working in this field be so helpful and empathetic to my situation until her. I’m grateful to know there are still people who understand we are not machines, but rather humans experiencing life; and we all deserve second chances to rectify any wrongs.”
Check your ChexSystems record
Similar to the three credit reporting agencies, ChexSystems is a consumer reporting agency that reports your bank account activity. If you bounce a check, make a late payment to a bank, are hit with an NSF fee or even open too many accounts, it might end up in a ChexSystems report.
Banks use ChexSystems to approve or deny you for a new bank account. If you have a low credit score and trouble opening new bank accounts, you can pull your report on the ChexSystems website. You can then dispute any errors and work on improving your report.
FAQ
If you have no credit, what is your score?
If you have no credit or credit history, it is possible to have no credit score at all. Some people refer to this as having a “zero” credit score. Once you establish a credit history, the lowest possible score is 300.
Do businesses have credit scores?
Yes, businesses can have credit scores. The two major business credit reporting agencies, Dun & Bradstreet PAYDEX Score and Experian Intelliscore Plus, offer scores from 0 to 100, with higher scores being better. The score is based on reports from supplies and vendors, including payment information.
Does checking a credit score lower it?
Checking your credit score will not lower it and is an important task you should perform regularly to stay on top of your current score. The only type of credit check that can impact your credit score is a hard inquiry, usually performed when applying for a new credit account.
Why did my credit score drop?
Your credit score can drop for many different reasons, typically when a negative report is sent to a credit bureau, such as a late payment. There are also many factors that make up your score, such as credit utilization, credit mix, age of accounts and debt balances. Reviewing your credit report can give you more insights into why your score dropped.
How long does it take to repair bad credit?
Repairing bad credit can take a few months to several years, depending on how severe the issues are. Minor problems may start to improve within six months to a year, while major negative marks like collections or bankruptcy can take three to seven years to recover from. Consistently paying bills on time, lowering credit card balances, and disputing errors are the fastest ways to rebuild your score.
Article sources
ConsumerAffairs writers primarily rely on government data, industry experts and original research from other reputable publications to inform their work. Specific sources for this article include:
- FICO, “FICO® Score.” Accessed Nov. 12, 2025.
- VantageScore, “VantageScore.” Accessed Nov. 12, 2025.
- MyFICO, “What's in my FICO® Scores?” Accessed Nov. 12, 2025.
- VantageScore, “VantageScore 4.0 User Guide.” Accessed Nov. 12, 2025.
- MyFICO, “What are the different categories of late payments and how does your FICO® Score consider late payments?” Accessed Nov. 12, 2025.
- Federal Housing Administration, “Credit Requirements for FHA Loans.” Accessed Nov. 12, 2025.
- Duns and Bradstreet, “Changes to a Business’s PAYDEX® Score.” Accessed Nov. 12, 2025.
- Experian, “Intelliscore Plus V.” Accessed Nov. 12, 2025.
- MyFICO, “Credit Checks: What are credit inquiries and how do they affect your FICO® Score?” Accessed Nov. 12, 2025.
