Having a credit score of 600 is considered fair by credit rating agencies. While it is not an excellent score, a 600 credit score shows that you are able to meet your payment obligations and establishes some creditworthiness. With a credit score of 600, you may qualify for loans and credit cards, though likely at higher interest rates. There are steps you can take to raise your credit score to get access to more favorable rates. Let’s take a closer look at what a 600 credit score means and how you can improve it.
What Does A Credit Score of 600 Mean?
In the United States, FICO and VantageScore are the two major companies that calculate credit scores, which range from 300 to 850. Here is how they classify different score ranges:
| Credit Score Range | FICO | VantageScore |
|---|---|---|
| 800-850 | Exceptional | Super prime |
| 740-799 | Very Good | Prime |
| 670-739 | Good | Non-prime |
| 580-669 | Fair | Subprime |
| 300-579 | Poor | Deep subprime |
As you can see, a credit score of 600 falls into the ‘fair’ or ‘subprime’ categories by FICO and VantageScore standards. It is below the range considered ‘good’ credit, but above what is deemed ‘poor’ credit.
In more concrete terms, a credit score of 600 suggests the following about your creditworthiness and ability to repay debts:
- You have a mixed record of on-time payments and possibly some missed or late payments.
- You likely have high balances on credit cards and other revolving credit compared to your credit limits.
- You may have a limited number of accounts and not a lot of recent credit experience.
- You may have had some collections, charge-offs, bankruptcies, foreclosures, or other negative items on your credit reports.
While a 600 credit score makes it more challenging to get approved for new credit and loans, it does not necessarily preclude you from getting approved. You may just get less favorable interest rates or terms.
Is 600 A Good Credit Score for a Loan?
With a 600 credit score, getting approved for a loan is possible but difficult. Here is a breakdown of how a 600 credit score may fare for different loan types:
Mortgage Loans
Most conventional mortgages require a minimum credit score of 620 to be eligible. Borrowers with credit scores as low as 580 may qualify for FHA loans, which allow down payments as low as 3.5%. 600 is typically the minimum needed for VA home loans.
If approved with a 600 credit score, you can expect to pay a higher interest rate, extra fees, and potentially require a larger down payment. Alternative lenders may approve mortgages with a 600 score, but often charge 1-2% higher interest and require 20% or more down.
Auto Loans
Prime auto lenders typically require a score of 660+ for the best rates, but borrowers as low as 600 may get approved. However, interest rates can be significantly higher with a 600 credit score. Subprime lenders that focus on borrowers with poor credit often accept 600, but will charge 8-20% or more in interest depending on factors like income and down payment amount.
Personal Loans
Online lenders like SoFi, Lightstream, and Avant accept minimum credit scores between 600 and 660 for personal loan approval. However, they reserve their lowest rates for those with good/excellent credit scores. With poor credit, expect to pay an APR of 15-35% on a personal loan if approved.
Student Loans
Most federal student loans don’t require a credit check. Private student loans typically require a credit score of at least 650. Those with scores around 600 may still be approved but with a higher interest rate or by adding a creditworthy co-signer.
Is 600 A Good Credit Score for Credit Cards?
A credit score of 600 makes it challenging, but possible, to get approved for rewards credit cards. Prime card issuers like Chase or Capital One typically require 670+ for approval. With a score around 600, you’ll have better chances with subprime credit cards aimed at applicants with poor credit.
The interest rates and fees will likely be much higher compared to reward cards. Expect to see APRs of 25-30% with subprime cards. The credit limits may also be lower, often just a few hundred dollars when starting out. However, using the card responsibly for 6-12 months can demonstrate you are able to handle credit and open doors to better card offers.
How to Raise Your Credit Score from 600
The good news is that there are steps you can take to boost your credit score from 600 to the good to excellent range. It takes time and diligent effort, but improving 100 points or more is certainly feasible if you adopt smart credit habits. Here are some tips:
Pay All Bills On Time
Payment history is the biggest factor in your credit scores. Set up autopay or calendar reminders to ensure you never miss a payment due date. If you do miss a payment, get caught up and make sure it doesn’t happen again.
Keep Balances Low
High credit utilization hurts your credit scores, so try to keep balances below 30% of your credit limits. Pay down balances aggressively and consider contacting issuers to request higher limits if needed.
Limit New Credit Applications
Each new credit application results in a hard inquiry, which can drop scores 10+ points. Try spacing out applications by at least 6 months and only apply for credit you truly need.
Monitor Your Credit Reports
Errors on credit reports can drag down your scores. Review reports from Equifax, Experian, and TransUnion annually to check for mistakes or suspicious activity. Dispute any errors you uncover.
Build Credit Mix
Having different types of credit accounts, including installment loans and revolving accounts, can help your credit mix and ultimately your scores. Adding new accounts responsibly over time can have a positive impact.
Let Time Pass
Negative marks like late payments and collections stay on your credit reports for 7 years. As these fade further into the past, they hurt less. Building positive payment history helps counteract old mistakes.
With diligence and smart credit management, it is realistic to add 100 points or more to your scores in 12-24 months. This can open the door to the best interest rates and loan approvals.
Should You Wait Until Your Credit Is Better?
If you have fair credit and need to take out a loan or get a new credit card, there is an argument for waiting 6-12 months to improve your score first before applying. With a higher score, you will qualify for better rates that save you money.
However, waiting is not always realistic if you have an urgent need. Building credit takes time. If you need to finance a car to get to work or want to consolidate high interest credit card balances with a personal loan, there are still lenders willing to approve borrowers with scores around 600.
The key is shopping around and not settling for the first offer. Compare rates across multiple lenders, including banks, credit unions, and online lenders. Consider asking a family member to co-sign if it will get you more favorable rates.
Building credit is a marathon, not a sprint. If you have fair credit but need financing now, getting approved is possible. Continue working to improve your credit and you can refinance down the road as your score goes up.
| Credit Score Range | Qualify for Best Rates? |
|---|---|
| 600-639 | No |
| 640-679 | Maybe |
| 680-719 | Usually |
| 720+ | Yes |
What Is Considered a Good Credit Score?
While credit scores fall on a scale from 300 to 850, most people have scores between 600 and 750. According to FICO, the median score among U.S. consumers is 711.
Here is a general breakdown of what ranges can be considered excellent, good, fair, or bad credit:
- Excellent credit: Scores of 800 or higher
- Good credit: Scores of 670 to 739
- Fair credit: Scores of 580 to 669
- Poor credit: Scores below 580
Scores of 720 and up are generally considered good to excellent credit and will qualify you for the most favorable interest rates on loans and credit cards. If your score is under 700, there is still room for improvement to save money.
What is a Good Credit Score for Specific Ages?
The average credit score varies by age group, so your expectations for a “good” score may shift depending on your stage of life.
- 18-24 years old: 668
- 25-34 years old: 677
- 35-44 years old: 690
- 45-54 years old: 709
- 55-64 years old: 721
- 65+ years old: 748
Younger borrowers have less credit history, so their scores tend to be lower. Older consumers have had more time to build solid credit and raise their scores. While there are targets tailored to your age group, the 700+ range is considered good credit regardless of your age.
How to Check Your Credit Score for Free
Checking your credit scores frequently is key to monitoring your credit health and recognizing areas for improvement. Here are some ways to check your scores for free:
Online through Credit Karma
Credit Karma provides free weekly updates of your TransUnion and Equifax credit scores. You can sign up on their website by providing some personal information.
Credit card companies
Many credit card issuers like Chase, Discover, and Capital One allow cardholders to check their FICO scores for free through their websites or apps.
Borrowell
Borrowell offers free Equifax credit score monitoring. You can check for free without entering any credit card information.
AnnualCreditReport.com
Through this government authorized website, you can obtain a free credit report from each of the three major bureaus once per year. Checking your full reports helps uncover errors.
Keeping tabs on your credit score regularly is vital for understanding whether your efforts to build credit are working. Monitoring services also alert you to any suspicious activity that may indicate fraud or identity theft.
Conclusion
A credit score of 600 is considered fair. It indicates you meet some but not all lenders’ criteria to be a low-risk borrower. While a 600 credit score makes financing more challenging, it is still possible to get approved for credit cards and loans if you shop around.
The higher you can raise your credit score, the better off you will be when seeking credit. Excellent credit scores in the 700s and above qualify you for the very best interest rates that lenders offer. Fortunately, there are many steps you can take to boost your credit over time. Paying bills on time, keeping balances low, disputing errors, and building credit variety will all have positive effects.
Raising your credit score gives you more affordable financing options that can potentially save you thousands on interest costs. Reach for scores above 700, and preferably towards 800, to unlock your best loan terms and credit card rewards.