How To Improve a 400 Credit Score Even if You're Struggling With Debt

Is 400 a Bad Credit Score?

Credit scores range from 300 to 850. So yes, 400 is low, but it’s a starting point. And you’re not alone.

💡 About 16% of people have a score between 300 and 579, according to Experian.

The two most common credit scoring systems in the U.S. are FICO and Vantage Score, and both consider a 400 credit score “very poor.”

Still, having a 400 credit score doesn’t mean you’re irresponsible, and it isn’t a reflection of your character. It usually means you’ve been through something hard. Many people reach this point after losing a job, getting hit with surprise medical bills, or trying to stay afloat on high-interest credit card debt.

What Causes a 400 Credit Score?

A credit score of 400 usually means you've had some serious financial challenges. 

Many people with scores in this range have been through events like job loss, medical emergencies, or other life setbacks that made it hard to keep up with bills. According to Experian, people in this credit range often carry high levels of debt and have a history of late or missed payments. The good news is that credit scores aren’t permanent. Even if you’ve made mistakes or gone through bankruptcy, those marks won’t stay on your credit report forever — and there are ways to start rebuilding.

The most popular credit scoring method, FICO, uses five main factors to calculate your credit score:

• Payment history (35%)

• Amounts owed/credit utilization ratio (30%)

• Length of credit history (15%)

• New credit accounts (10%)

• Credit mix accounts (10%)

Let’s take a look at how the main two factors can impact your credit and leave you with a score in the 400s.

How Your Payment History Can Hurt Your Credit Score

As you can see, not every factor has the same impact. Your payment history is the single most important factor influencing your credit score. Most people with scores in the 400s have missed payments or had late payments on one or more of their credit accounts. 

If you have a credit card or loan go into default or sent to a collection agency, that will impact your score even more. Any one of these actions can seriously hurt your credit score.

The fix for this is probably obvious: Start making regular on-time payments. But if you’re struggling financially, this may not be possible. In that case, it’s time to start seriously looking at your debt relief options. Many people in this situation find that high interest rates mean it’s impossible to dig themselves out of debt. If that’s the case, it might be time to consider getting a fresh start with Chapter 7 bankruptcy. More on this option below.

How Using a Lot of Credit Can Hurt Your Credit Score

The second most important factor in calculating your score is your credit utilization ratio.

💡 Your credit utilization ratio is the amount of credit you’re using compared to how much you have available.

For example, if you have a $1,000 credit limit and you owe $500, your credit utilization ratio is 50%. This is considered high. Most experts recommend keeping your credit utilization ratio between 10% and 30%. 

Your credit score may be suffering if you have a lot of maxed-out credit cards or lines of credit. If that’s the case and you’re just making minimum payments, your amounts owed will be high. This can lower your score.

Again, the solution to this is easy to see but can be hard to implement if you’re struggling financially! If you need to use credit to get by each month, it can start to feel impossible to pay down. If that’s the case and it’s stressing you out, it’s time to explore your debt relief options.

When someone falls behind on payments, maxes out credit cards, or defaults on loans, it can quickly bring their score down. Accounts in collections, charge-offs, repossessions, or a recent bankruptcy also have a major impact.

How a 400 Credit Score Affects You

A credit score of 400 can make it more difficult to get a loan, rent an apartment, buy a car, or even apply for a job. It might also mean higher interest rates for the loans or credit cards you are approved for. Sometimes, you may face additional requirements, such as getting a co-signer or having to put down a deposit.

Having a low credit score can also affect things you might not expect, like how much you pay for car insurance.

But having a 400 credit score isn’t a life sentence. It’s just a snapshot of where you’re at right now. With a bit of strategy and action, you can start rebuilding your credit.

Can You Get Approved for Credit or Loans With a 400 Score?

It’s tough, but not impossible to get approved for credit or loans with a 400 credit score. 

Most traditional lenders view a 400 score as very risky, so you may get denied for things like personal loans or regular credit cards. If you are approved, the loan terms may not be great. For example, interest rates can be very high, and you might be asked for a co-signer or a deposit. 

💡 Some people turn to secured credit cards or credit-builder loans instead, which are designed for people with low credit and can actually help you rebuild over time.

Can You Rent an Apartment With a 400 Credit Score?

Yes, but it can be more difficult. Many landlords check your credit as part of the rental application process. A score of 400 might raise concerns about missed payments or financial stability, which could lead to a denial or a request for a larger security deposit. 

🤝 Some renters have better luck working with individual landlords instead of large property management companies, which often have stricter credit requirements.

It can also help to show proof of steady income, offer references, or write a short letter explaining your situation, especially if your credit was affected by something like a medical emergency or job loss. Some people also use a co-signer to strengthen their application. 

Can You Buy a Car With a 400 Credit Score?

Yes, you can, but it may come at a high cost. Some auto lenders and dealerships specialize in working with buyers who have low credit, but they often charge very high interest rates. Sometimes these rates are double or triple what someone with good credit would pay, which can make for a very expensive car.

A low score can also limit your loan options or mean you need to make a larger down payment. 

Some people wait to buy a car until their credit improves or look for ways to buy with cash. Others explore options like credit unions or in-house financing programs that may be more flexible. 

The most important thing is to avoid a loan with terms that will stretch your budget even thinner and make it harder to rebuild financially.

Can You Buy a Home With a 400 Credit Score?

With a credit score of 400, it’s very unlikely you'll be approved for a mortgage right now. Most lenders require higher credit scores to offer home loans. A 400 score typically falls below the minimum cutoffs, even for programs with more flexible requirements, like FHA loans.

That said, this doesn’t mean homeownership is off the table forever. Many people work toward improving their credit over time by paying bills on time, lowering their debt, and building a positive payment history. These small steps can add up and put you in a better position to qualify for a mortgage down the line. If owning a home is your goal, rebuilding your credit is a solid place to start.

Can You Get a Job With a 400 Credit Score?

In most cases, yes! Many employers don’t even check your credit, but it depends on the job. Employers in industries like finance, government, or security are more likely to run a credit check as part of the hiring process. 

💡 A low credit score might raise concerns in certain roles, especially if the job involves handling money or sensitive information. 

But a credit check isn’t the same as a credit score, and employers don’t always focus on the number alone. Instead, they may look for patterns like unpaid debts or recent bankruptcies. 

If your credit comes up, it can help to explain your situation honestly and focus on what you’re doing to move forward. Many people with low scores still find steady work, especially when they’re up front and show progress toward rebuilding.

Does a 400 Credit Score Affect Your Insurance Rates?

In many states, having a low credit score can affect your insurance rates. 

Some car and home insurance companies use something called a credit-based insurance score to help set your rates. This isn’t the same as your regular credit score, but it’s based on similar information. 

If your score is low, you might end up paying more for insurance, even if you’ve never filed a claim. While you can’t always avoid this, improving your credit over time can lead to better rates in the future. In the meantime, shopping around and asking about discounts can help you find the most affordable coverage available.

How To Get Approved for Credit or Loans With a 400 Credit Score

If you need a car to get to work or want a credit card for emergencies, getting approved with a 400 credit score can feel like an uphill battle. But there are still some options — especially if you're willing to start small, offer extra security, or work with lenders who understand what it's like to rebuild after financial hardship.

Here are a few strategies that may help:

• Consider a co-signer.

• Shop around and compare lenders.

• Offer a bigger down payment or deposit.

Consider a Co-Signer

Some people ask a trusted friend or family member with better credit to co-sign a loan or credit card application. Lenders see this as less risky, so they may be more likely to approve your application.

Just keep in mind that if you miss payments, it can hurt your co-signer’s credit too. So it’s important to be confident you can handle the payments.

Shop Around and Compare Lenders

Not all lenders have the same approval standards. Some specialize in working with people who have low credit scores or recent bankruptcies. 

Try looking into credit unions, online lenders, or auto dealerships that offer in-house financing. Just make sure to check the interest rate and total cost before accepting any offer.

Some lenders target people with low credit by offering loans with extremely high interest rates, extra fees, or unclear terms. Take your time to read everything carefully so you fully understand what you’re agreeing to, and avoid any deals that could make your financial situation worse.

Offer a Bigger Down Payment or Deposit

If you’re applying for a car loan or another secured loan, offering more money up front can sometimes improve your chances of getting approved. It reduces the lender’s risk and shows that you’re committed to the loan.

Even though the terms might not be ideal at first, using one or more of these options wisely can help you start rebuilding your credit. Over time, that opens the door to better offers, lower rates, and more financial stability.

How To Fix a 400 Credit Score

If you’re starting from a credit score around 400, rebuilding can feel overwhelming, but it’s absolutely possible. Your credit score won’t jump overnight, but with consistent steps and a little patience, it will get better over time. 

We’ve already covered two of the most important tips for improving your credit score:

✅ Focus on making on-time payments consistently.

✅ Lower your credit card balances when you can.

Here are some other ways to jump-start your credit-boosting journey:

• Get a secured credit card or credit-builder loan.

• Review your credit report and dispute any errors you find.

• File bankruptcy to get a fresh start.

Start With a Secured Credit Card or Credit-Builder loan

If your credit score is low, secured credit cards and credit-builder loans are two helpful tools that many people use to start rebuilding. 

A secured credit card requires a deposit — usually a few hundred dollars — that becomes your credit limit. It works like a regular credit card, and if you make on-time payments and keep your balance low, it can help improve your credit over time. 

💪 If you’ve struggled with using and repaying credit cards in the past, this can be a good and low-risk way to build better financial habits.

A credit-builder loan works a little differently: You make fixed monthly payments, but you don’t get the money right away. Instead, the lender holds it in a savings account until the loan is fully repaid. These payments are reported to the credit bureaus, which can help boost your credit score if you pay on time. 

💰 The bonus here is obvious: You get to build credit while building your savings.

Both of these options are often available through credit unions or local banks and are made specifically for people who are rebuilding after financial setbacks. You can also check out our partner Self, which offers credit-builder loans and secured cards.

Review Your Credit Reports for Errors

Credit reporting errors are more common than most people realize. One way to get an easy win with your credit is to view your credit reports and report any errors you find.

💻 You can get free credit reports from all three major credit bureaus — Experian, Equifax, and TransUnion — at AnnualCreditReport.com. Look for accounts that should show a zero balance, duplicate debts, or anything that doesn’t look right. If you find a mistake, you can file a dispute with the credit bureau to get it corrected.

To learn more, read Upsolve’s guide to disputing credit report errors.

File Bankruptcy To Get a Fresh Start

Many top credit-building tips have something in common: They assume you have the funds to make at least the minimum payment on your debt. But for many people, bad credit is the result of trying to manage debt that’s simply too overwhelming. 

No one misses a credit card payment because they want to. They miss it or are late because the funds simply aren’t there to make the payment.

High interest rates, low wages, and high cost of living can make it feel truly impossible to make ends meet. If you’re drowning in debt and can’t see a way out, it might be time to start fresh. Chapter 7 bankruptcy can give you that fresh start. And Upsolve can help you file for free. 

Many people who’ve used our tool say they wish they’d filed sooner. If you’re worried that your credit score will fall even further, you’re not alone. But bankruptcy isn’t always as damaging as people fear, especially if your credit score is already low from missed payments, collections, or defaulted loans. 

Plus, in many cases, continuing to struggle with unpayable debt can do more long-term harm than filing bankruptcy. Once your debts are discharged in Chapter 7, you get a chance to reset. You’re no longer weighed down by old bills, which can make it easier to rebuild your credit over time.

💡 Many people who file for Chapter 7 start seeing credit improvements within 1–2 years. This is especially true for those who start rebuilding right away by paying new bills on time and using secured credit tools.

Let’s Summarize…

If your credit score is around 400, you’re not alone — and it doesn’t mean you’ve failed. Many people end up with low scores after facing financial setbacks like job loss, medical bills, or overwhelming debt. While a low score can make things like borrowing, renting, or job hunting harder, it’s not permanent. With steady, on-time payments and the right credit-building tools, you can raise your score over time. And if your debt feels impossible to manage, bankruptcy may be an option to help you reset and move forward.