How bad is a credit score of 600?

Your credit score can determine your ability to achieve many of your financial goals, whether it’s buying a home or adding a new credit card to fund your move. Lenders, financial institutions, and banks use these three-digit numbers to gauge the likelihood that borrowers will be able to repay their loans.

Three credit bureaus – Experian, Equifax, and TransUnion – collect information about your credit accounts, such as your payment history, credit limit, balances, and bankruptcies, and then use that information to calculate a credit score. There are two types of credit scoring models: FICO® Score and VantageScore.

FICO® scores, which are more commonly used, range from 300 to 850. Generally, the higher your score, the better credit cards, mortgages and loans you can qualify for.

Below, Select looks at what it means to have a credit score of 600 and the types of credit cards you might qualify for.

According FICO® Score, 15.5% of the population has a credit score below 600, while the average credit score sits at 716. Having a credit score of 600 puts you below the national average and in the category “fair credit”.

Subprime is the categorization used by lenders to denote the likelihood of a borrower defaulting or repaying their loan. Although the definition and range of a subprime credit score varies, generally a score of 600 will fall into this category because the FICO® score considers borrowers with scores between 580 and 619 to have subprime credit.

FICO® Score Ranges:

• Super bounty: 720 or more
• First: 660-719
• Quasi-Bounty: 620-659
• Subprime: 580-619
• Deep subprime: 580

Since subprime borrowers are considered riskier for lenders, they tend to have lower loan terms than prime borrowers. Subprime borrowers will typically have higher APRs on credit cards or higher interest rates on mortgages than their prime borrower counterparts, for example.

In other words, having a credit score of 600 can limit your ability to get mortgages, personal loans, and credit cards on favorable terms.

Since 600 is considered a fair credit score, borrowers with this score will generally not be eligible for credit cards with large welcome bonuses, generous rewards and perks, or low APRs. However, some options are still available – use a secure card or become an authorized user on someone else’s card.

A secured card typically requires cardholders to post a security deposit equal to the amount of credit extended to them. The deposit serves as security in case a cardholder fails to make payments on time or in full. Cardholders will then receive their security deposit if they show good payment behavior and choose to close the account or switch to an unsecured card.

Secured cards are also a good choice for those with subprime credit, as they allow cardholders to improve their credit score by making on-time payments that are then reported to the credit bureaus.

Select has ranked the Discover it® secure credit card among the best secure cards. There is no annual fee and the card has a minimum security deposit of $200 — remember, the security deposit amount equals the line of credit amount and, in this case, can be up to at $2,500.

For those who prefer a clear path to an unsecured card, the Discover it® Secured Credit Card is a good option because after seven months of card membership, the issuer will begin evaluating your account to determine if you can be transferred to an unsecured card. card and have your security deposit returned to you.

Another choice for people with fair credit ratings is the Visa® Petal® 2 “Cash Back, No Fees” credit card, issued by WebBank, does not require a security deposit and offers lines of credit ranging from 300 $ to $10,000 depending on the creditworthiness of the cardholder. . Petal may also review the factors behind your credit score, such as your bank statements, during the approval process.

The Petal 2 offers 1% cash back on qualifying purchases immediately and up to 1.5% cash back on qualifying purchases after making 12 monthly payments on time.

Two other cards you may qualify for with a credit score of 600 are the Capital One QuicksilverOne Cash Rewards Credit Card and the Capital One Platinum Credit Card. Although both cards offer minimal rewards, with neither offering a welcome bonus, the QuicksilverOne Cash Rewards Credit Card offers cardholders a 1.5% cashback on all qualifying purchases, although there are an annual fee of $39. The Capital One Platinum credit card, on the other hand, does not offer any rewards but does not have an annual fee.

Finally, if you are looking for an easy way to increase your credit score before signing up for your own credit card, you can always choose to become an authorized user on someone else’s account.

Becoming an authorized user on a primary cardholder’s account means that their credit history for that card is reflected on your own credit score – as long as the primary cardholder makes their payments on time and in full, the score authorized user’s credit will also improve. However, if the primary cardholder is overdue, this will also end up having a negative impact on your credit score.

Remember that the Primary Cardholder may choose not to provide an actual credit card to the Authorized User. The Authorized User is also not the one responsible for payments.

You can check and monitor your credit score with a free credit monitoring service like CreditWise® from Capital One and Experian. And using a service like Experian Boost™ can help boost your FICO®* score quickly if you’re trying to get a fair, good, or excellent score by taking regular bills you pay on time like Netflix and adding it to your credit profile.

*Results may vary. Some may not see an improvement in scores or approval ratings. Not all lenders use Experian credit reports, and not all lenders use scores impacted by Experian Boost.

Petal 2 Visa credit card issued by WebBank.

For Discover it® secure credit card rates and fees, click here.

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