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600 Credit Score: What does it mean?

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In a Nutshell

Your credit score is a measure of your ability to repay your debts. If your credit score is 600 or less, then you will likely have difficulty getting a new loan at a reasonable interest rate. Most lenders who see borrowers with a credit score of 600 or lower will only offer high-interest loans that must be paid without fail every month. If the borrower fails to pay each month, then the lender can send the account to collections. This article will explain what credit scores are, what factors affect your credit score, and how to improve your score.

Written by the Upsolve Team.  Reviewed by Attorney Andrea Wimmer
Updated September 18, 2021


Your credit score will determine how much interest you have to pay on loans or credit. If your credit score is 600 or less, then you will likely have difficulty getting a new loan at a reasonable interest rate. Most lenders who see borrowers with a credit score of 600 or lower will only offer high-interest loans that must be paid without fail every month. If the borrower fails to pay each month, then the lender can send the account to collections. 

This article will explain what credit scores are, what factors affect your credit score, and how to improve your score.

What is credit scoring anyway?

Your credit score is a measure of your ability to repay your debts. If you have always repaid your debts on time, then you’ll likely have a fairly high score (680 or higher). On the other hand, if you have defaulted on several debts, then your score will be much lower (620 or lower). Credit scores range from 300 to 850. Most credit scores are computed using the information in the borrower’s credit report. This includes their payment history, debt-to-credit ratio, and other factors related to borrowing.

About a third of a borrower’s credit score is based on their payment history, which is the single largest factor in the equation. This information is compiled by the credit bureaus, including TransUnion, Experian, and Equifax. The three major credit bureaus use the FICO score while others may use a different kind of credit score called the VantageScore.

Borrowers with a credit score of around 600 often have a history of defaulting on their loans or making late payments. As a result, borrowers with a score of 600 or lower will have a hard time getting new credit or loans at a competitive interest rate. Here are the key factors that go into computing your credit score:

  • Payment history (35%)

  • The total amount of debt you still owe all lenders (30%)

  • Credit history (15%)

  • New credit (10%)

  • Credit mix (10%)

Why Your Credit Score Matters

Your credit score is an important part of your personal finances. Having a good score means you can get new credit or loans at a lower interest rate. This means they’ll cost you less over the long run. It also makes you more likely to qualify for new credit cards or loans. If your credit score is low, you may still qualify for credit cards, but your interest rates will be higher. Some lenders may deny a credit card application or you may have to look into getting a secured credit card. 

Your credit also affects your insurance rates. Poor credit leads to higher interest rates, while good credit gets you lower rates. Even utility bills, such as cell phone bills or energy costs, may be higher if your credit score is very low.

Factors Affecting Your Credit Score

Your credit score is made up of several factors including your credit history, record of payments and missed payments, credit utilization ratio, length of credit history, and the types of credit you’ve used. These all go into the formula used to compute your credit score. 

Most lenders like to see borrowers use about one-third of their revolving credit. That means you would use no more than one-third of the total amount of credit that you have on your credit cards each month. Then you’d pay the cards off in full at the end of each month. To get a good credit score, you’ll also need to use more than one type of credit on a regular basis. This could be a mix of student loans, credit cards, personal loans, and auto loans. One way to increase your credit score over time is by using different kinds of credit and staying current on all of your payments.

600 Credit Score

A credit score of 600 is below average for both FICO and VantageScore scoring models. Depending on your exact score, it’s considered fair or very poor, and you can expect to get a lot of offers from loan sharks, payday lenders, and other sources of high-interest loans. Whatever you do, don’t fall for their offers. Taking out a loan with one of these lenders can keep you in financial bondage for years. 

Credit Cards

People don’t have many options when they have fair or poor credit. If your credit score is 600 or below, any credit card you get will likely charge you 20% interest or more. But there is still hope. You can apply for a secured credit card. With a secured card, you fully fund the credit limit upfront. And if you make your monthly payments on time, you can start to increase your credit score. 

Essentially, a secured credit card is a good way to rebuild your credit, and it may be your only option for a credit card if your credit is poor. If you can’t make the monthly payments on the card, the lender will use your cash reserve to make the payment for you. Try to avoid this though because your credit score will suffer. 

There are also unsecured credit cards for those with bad credit scores or fair credit scores, but they usually charge very high interest rates and other monthly or annual fees. Think twice before opening an account with a lender like this. If it’s your only option to rebuild your credit, be certain that you’ll be able to make your payments on time every month. 

Mortgages

If your credit score is 600 or below, then you will have a hard time qualifying for a competitive interest rate on your mortgage. If you’re a veteran and your credit score is at least 580, you can still qualify for a Veterans Affairs (VA) loan. Homebuyers can also qualify for an FHA loan if their score is 580 or above. That said, the interest rate you qualify for will depend on your credit score. So even if you are able to qualify for a home loan, be prepared to pay higher interest rates if your FICO score is 600 or lower. 

Car Loans

In most cases, having a credit score of 600 doesn’t make it impossible to get a car loan, but the interest rate will likely be high. You may also need to make a substantial down payment on the loan. If your credit score is around 600, look at lenders that specialize in lending to people with low credit scores or a bad credit history. If you have a stable employment history, stable payment history, and a good debt-to-credit ratio, you should be able to find a qualified lender to give you a car loan. 

Remember that when you apply for any kind of loan including an auto loan, each lender will submit a hard inquiry of your credit report. Too many hard inquiries can lower your credit score.

Personal Loans

If you have a credit score of 600 or below, this may be the hardest type of loan to get. Most personal loans are unsecured. Since there’s no collateral to back up the loan, it will be riskier for the lender to make the loan. This is why they will usually charge higher interest rates. As with car loans, your creditworthiness will also help to determine the interest rate that you are charged on your loan. Credit monitoring companies will monitor your payment history and watch your credit score range to see what rates you should be charged in the future. You can monitor your own progress by getting a free credit report each year.

How To Improve Your Credit Score

One of the best things about your credit score is that no matter how low your score is, you have the power to improve it. It may not be easy, but it’s possible and you have several options to do it. If you have a credit card with a large balance, you could start by making more than the minimum monthly payment on that account. People with higher credit scores almost always have excellent payment histories. That’s because your FICO credit score is very dependent on your payment history. This is why making extra payments can really help improve your score. 

You may be wondering how long it will take to see results once you start working on improving your score. While it’s not immediate, it doesn’t take forever. The key to improving your score is patience and consistency. You can expect to see results after several months, depending on what strategy you’ve taken to pay your debts and improve your score. 

Don’t hesitate to enlist the help of a consumer credit counselor or financial planner if you aren’t sure how to proceed. Either of these professionals can tell you which debts you should focus on paying off first and which ones can wait for a while. Your local credit union may also be able to help you with this. Some credit card companies even have counselors who can help you to organize your debts. 

Here are some other ways to improve your credit score...

Make on-time payments.

One of the greatest enemies of a good credit score is late payments. Late payments seriously hurt your score and make it harder to qualify for any other type of credit or loan. When you do qualify, they’ll be more expensive. You should do everything in your power to make your payments on time every month without fail to boost and preserve your credit score. And, when possible, pay more than the minimum payment. 

Give your credit cards a break.

Sometimes it’s a good idea to apply for a new credit card. If you can easily make another monthly payment, having another card can improve your debt-to-credit ratio and show lenders that you are a responsible borrower. But if you’re already struggling to pay the debts you currently owe, it might be time to give your cards a break. Also, remember that whenever you apply for a new credit card, the lender will make a hard inquiry on your credit, which will lower your score slightly. The more hard inquiries lenders make, the more your score is impacted. 

Check your credit report.

It is important to stay on top of your credit score and pull a copy of your credit report from each of the three major bureaus (Experian, Transunion, and Equifax) at least once a year. And don’t forget to get a copy of your VantageScore as well, as this score is also becoming increasingly important to lenders. Make sure that there are no errors on your report and take action immediately if there are. Dispute errors as soon as you see them. If you’re working hard to improve your credit score, you don’t want an error on your credit report to set you back.

Keep old accounts open.

Even if you no longer use a particular credit card or line of credit, don’t close the account, especially if you have a long history of timely payments on it. You don’t have to keep using the account, but leaving it open will help your credit history and improve your credit utilization ratio. 

Avoid high credit card balances.

Regardless of what your credit limit is, it’s best to use only about 30–35% of your credit. Spending about 30% of your credit limit each month, then paying your bill off in full, is the best way to use your card. Your credit score will improve over time, and you will not have to worry about late fees or interest charges. You can just rack up any perks offered by your card without worrying about the interest rate. 

Let’s Summarize...

A credit score of 600 means that your credit is below average, but there are many things that you can do to improve your score. Start by making all your minimum monthly payments on time. Then, try not to use more than one-third of your total credit in any given month. Pay your cards off in full each month if at all possible. Also, be sure to pull a credit report from all three credit bureaus at least once a year, and review the report to make sure that there are no errors. The bottom line is your credit score will eventually improve if you use your credit wisely and make your payments on time. With a better score, you can get better terms on future loans and credit.



Written By:

The Upsolve Team

Upsolve is fortunate to have a remarkable team of bankruptcy attorneys, as well as finance and consumer rights professionals, as contributing writers to help us keep our content up to date, informative, and helpful to everyone.

Attorney Andrea Wimmer

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Andrea practiced exclusively as a bankruptcy attorney in consumer Chapter 7 and Chapter 13 cases for more than 10 years before joining Upsolve, first as a contributing writer and editor and ultimately joining the team as Managing Editor. While in private practice, Andrea handled... read more about Attorney Andrea Wimmer

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