500 Credit Score: What It Means and How to Improve It
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A 500 credit score is considered very poor and can make it hard to qualify for credit, housing, or loans without extra costs or restrictions. It usually signals past financial struggles like missed payments or high credit card balances, but it’s not a dead end. There are several ways to start rebuilding, including using secured credit cards, reviewing your credit reports for errors, and adding on-time rent payments to your credit file. While improvement takes time, consistent steps can help you raise your score and regain financial stability.
Written by Mae Koppes. Legally reviewed by Jonathan Petts
Updated July 17, 2025
What Does It Mean To Have a 500 Credit Score?
A 500 credit score is considered very poor. It falls near the bottom of the typical credit scoring range, which goes from 300 to 850. This means lenders see you as a high-risk borrower.
With a score this low, you may have trouble getting approved for new credit, and if you do qualify, you’ll likely pay higher interest rates and face stricter terms. In everyday life, this might mean needing to pay extra deposits for utilities, getting denied for apartment rentals, or paying more for car insurance.
Having a 500 credit score doesn’t mean you’re a bad person. It usually signals that you’ve had financial struggles in the past. This could include having late or missed payments, defaulting on loans or credit cards, or having accounts sent to collections. It might also include things like a repossession or foreclosure.
Even though a 500 score is low, it’s not permanent. Many people recover from credit setbacks by taking small, steady steps toward rebuilding their financial track record.
What a 500 Credit Score Tells Lenders
Your credit score puts you into a risk category that helps lenders decide whether to approve you for credit and what terms to offer. Different scoring models, like FICO and VantageScore, use slightly different labels, but the idea is the same: A 500 score is near the bottom and is seen as a sign of high risk.
💡According to a recent Consumer Financial Protection Bureau report, approximately 16% of U.S. adults have a credit score below 580.
In the FICO model, 500 is considered very poor. VantageScore might call it subprime or deep subprime. Either way, lenders may worry that you’re more likely to fall behind on payments based on your past credit behavior.
Because of this, you may face higher interest rates, up-front fees, or even rejections when applying for credit. Landlords, utility companies, and insurers may also see you as a higher-risk applicant. In some states, employers can even consider your credit when making hiring decisions.
Understanding Credit Score Ranges: From Poor to Excellent
Credit scores are divided into categories that help lenders quickly understand how risky or dependable a borrower might be.
There are two major credit-scoring models: FICO and VantageScore. Lenders typically look at your FICO Score. Online banking and credit scoring apps typically pull your VantageScore.
300–579: Very Poor
580–669: Fair
670–739: Good
740–799: Very Good
800–850: Exceptional
300–600: Subprime
601–660: Near Prime
661–780: Prime
781–850: Superprime
While FICO and VantageScore use different names and cutoffs, they both work the same way: The higher your score, the less risky you look to lenders. The lower your score, the more risky you look to lenders.
What Goes Into a Credit Score?
If you’re trying to better understand your credit score and figure out how to improve it, it helps to know how your score is calculated.
Five main factors to determine your FICO credit score:
Payment history (35%): This looks at whether you pay your accounts on time every month. Since this is the single biggest factor in calculating your score, late payments or missed payments can really hurt your credit score.
Credit utilization rate (30%): This refers to how much of your available credit you’re currently using — in other words, how close you are to reaching your credit limits. If you have a lot of maxed-out credit cards, your utilization rate will be high, and this can hurt your credit score. Paying down or paying off accounts can help boost your score.
Account age (15%): The longer you’ve had active credit accounts in good standing, the higher your score will be.
New accounts (10%): This looks at how often you’ve opened or applied for new credit recently. Opening several accounts in a short time can lower your score because it may signal financial stress or risk.
Credit mix (10%): This reflects the variety of credit types on your report — like credit cards, auto loans, or mortgages. A mix of different account types can help your score by showing you can handle different kinds of credit.
Credit Scores vs. Credit Reports: What’s the Difference?
A credit score isn’t the same thing as a credit report, but the two are related.
🧾 In simplified terms, your credit report is a summary of your credit accounts and payment history over the past 10 years. Credit reports are compiled by one of three credit reporting bureaus: Equifax, Experian, or TransUnion.
Your credit report is used to calculate your three-digit credit score. Lenders use this score to estimate how likely you are to repay a loan without reviewing your full credit history.
Can You Get a Credit Card With a 500 Credit Score?
Getting approved for a credit card with a 500 credit score can be tough. Most major banks don’t offer credit cards to people in this score range because it signals high risk. If you do get approved, you’re likely to have very high interest rates. You may be able to get approved for store-specific credit cards, but they’re likely to come with high interest rates as well.
This creates a frustrating cycle: Using credit wisely is one of the best ways to rebuild your score, but it’s hard to do that if you can’t get approved for a card in the first place.
💳 One option to explore is a secured credit card. These are designed for people with low or no credit. You’ll need to make a refundable deposit (usually around $200), which becomes your credit limit. If you use the card for small purchases and pay the balance off on time every month, it can help improve your score over time. Once your score goes up, it’s usually easier to qualify for a traditional credit card.
Upsolve partners with Self, which offers a secured credit card with as little as a $100 deposit. Self reports payments to all three major credit bureaus.
Can You Rent Housing With a 500 Credit Score?
Renting with a 500 credit score can be challenging, but it’s definitely not impossible. Many landlords check credit scores to decide whether to approve a rental application, and a score this low may raise red flags. Still, there are steps you can take to improve your chances.
One approach is to focus your search on rentals owned by individual landlords instead of large property management companies. Big rental companies often use strict credit screening tools that automatically reject low scores. Independent landlords, on the other hand, may take the time to look at your full application and consider your current situation.
It can help to include a short note explaining what caused your credit issues and how your finances have improved since. If you can, having a co-signer with good credit can also go a long way — it helps reduce the landlord’s risk and shows you're serious about making on-time payments.
Can You Buy a Home With a 500 Credit Score?
Like renting, buying a home is more difficult with a 500 credit score, but it’s not impossible. Some things that can help you secure a mortgage despite a low credit score include:
Having a co-borrower with good credit
Presenting evidence of an improved financial situation, such as pay stubs showing a steady income
Maintaining a healthy debt-to-income ratio (your monthly minimum debt payments divided by your monthly income)
Also, some kinds of loans are better than others for people with bad credit. Loans backed by the Federal Housing Administration (FHA), for example, are often a good choice for borrowers with lower credit scores (sometimes called subprime borrowers).
How To Rebuild a 500 Credit Score
A credit score of 500 can feel like a heavy weight, but it’s not the end of the road. Many people have turned things around from this point, and you can, too.
You can start working on your credit yourself, but if you want some support, a nonprofit credit counselor can walk you through your options and help you come up with a personalized plan.
✨ Upsolve can connect you with Cambridge Credit Counseling for a free session. They’re certified by the National Foundation for Credit Counseling (NFCC), and they specialize in helping people manage debt.
If you’re ready to take steps on your own, here are some proven ways to get started:
Create a strategy to manage your current debt.
Review your credit reports and fix any mistakes.
Use a secured credit card to start building history.
Open a credit builder loan to improve your credit while growing your savings.
Report rent or other monthly bills to credit bureaus.
Take Control of Your Debt
If your credit has suffered because you have unmanageable debt, you might need to take a look at your debt relief options before you can rebuild your credit score.
With a 500 score, traditional debt consolidation loans might not be available, but there are still paths forward. For example if you have mostly credit card debt, you may want to consider a debt management plan. This is a structured repayment plan run by a nonprofit credit counselor. These counselors often negotiate lower interest rates, which saves you money. Accounts included in the plan are usually closed, though, which can hurt your credit score in the short term.
If your debt load is too large to realistically repay in the next few years based on your income, Chapter 7 bankruptcy could be a path to a fresh start. Chapter 7 can eliminate many types of unsecured debt and give you space to rebuild both your credit and your finances.
✨ Upsolve offers a free online tool that helps eligible users file for Chapter 7 bankruptcy. It takes just a few minutes to see if you qualify.
Go Through Your Credit Reports
Your credit score is based on the information in your credit reports. If there are mistakes on your report, they could be dragging your score down.
Everyone is entitled to a free report from each of the three credit bureaus (Equifax, Experian, and TransUnion) every year. You can get them at AnnualCreditReport.com.
🛠 When reviewing your reports, check for:
Accounts you don’t recognize
Wrong balances or payment dates
Duplicate listings
Errors in your name or personal details
If you find any errors, you can file a dispute with the credit bureau that’s reporting it. Correcting mistakes can lead to a noticeable score increase.
Use a Secured Credit Card To Build Credit
If you have poor credit, qualifying for a regular credit card may be tough. Instead, you can consider a secured credit card.
💳 A secured card requires a deposit, often $100–$300, which acts as your credit limit. Aside from that, it works like a normal credit card.
Using a secured card to make small purchases and paying off the balance each month contributes to a positive payment history. This is one of the most important parts of your credit score.
✨ Upsolve partners with Self, which offers a secured credit card with as little as a $100 deposit. Self reports payments to all three major credit bureaus.
Use a Credit Builder Loan To Strengthen Your Score
A credit builder loan is another tool that helps improve your credit while encouraging consistent saving. It works a bit like a traditional loan in reverse.
You make monthly payments to the lender for a specific period of time. Those payments are set aside in a savings account. When the loan term ends, you get the full amount back — minus interest or fees.
📈 Each on-time payment gets reported to the credit bureaus, which helps build a positive credit history. That can be especially helpful if you don’t have many active accounts.
Credit builder loans are a low-risk way to develop money habits that support long-term financial health.
Add Rent or Utility Payments to Your Credit File
Most landlords and utility companies don’t automatically report payments to the credit bureaus. But showing that you’ve been making regular, on-time payments on rent or other bills can strengthen your credit profile.
🏡 That’s where rent-reporting services come in. These tools send your payment data to one or more credit bureaus, helping you build history without taking on new debt.
Some services require your landlord’s involvement, while others don’t. A few report to all three credit bureaus, but some only report to one. It’s worth comparing your options with these elements in mind.
Upsolve recommends Self’s rent-reporting service because it’s free, reports to all three major credit bureaus, and doesn’t require landlord participation.
