Make These 5 Moves Now if Your Credit Score Is Below 580

Man paying with credit card on smart phone at home office.
Zivica Kerkez /

Your credit score is a three-digit number that can affect everything from getting a mortgage to applying for a new job. Because your credit score can have such a big impact, keeping it in a healthy range is an important part of being financially secure. If your credit score is below 580, you may have a lot of work to do to get well.

This is because a credit score below 580 is poor by most measures. On the plus side, having a credit score this low means there is a lot of room for improvement. Given enough time, you can bring your score up to an acceptable level with the right moves — like the ones below.

What Does a Credit Score Below 580 Mean?

Credit scores can be complicated, and perhaps you aren’t sure what the various ranges mean. To make matters worse, different creditors and lenders might use different scoring models.

However, here are some common ranges a lender might use:

  • Below 580: Poor
  • 580 to 669: Fair
  • 670 to 739: Good
  • 740 to 799: Very Good
  • 800 and up: Excellent

Hence, if your credit score is below 580, it might be considered poor. You have some work to do, but it’s possible to repair your credit score. Here’s how…

Tips for a Credit Score Below 580

If your credit score is below 580, there’s no need to panic. Instead, try making these moves to improve it.

Get a Secured Credit Card

If your credit score is below 580, you must prove to lenders that you can borrow responsibly. One way to do that is by using a credit card responsibly. However, with your poor credit, most applications might result in a denial. At this stage, it might help to start building your credit with a secured credit card.

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Secured credit cards generally work by extending you a line of credit that you secure with a cash deposit. For instance, you deposit $200, which becomes your credit limit. Since you have already paid upfront, the bank reduces its risk while letting you slowly build your credit.

Prioritize Credit Card Payments

If your credit score is below 580, you might have missed a credit card payment or two in the past. It’s important to pay on time whether you open a secured credit card or have an existing one.

This is because payment history is one of the most important credit score factors. Paying your balances in full each month is preferable to avoid interest charges. If you can’t do that, be sure to make at least the minimum payment. You can set up automatic payments if your bank supports it.

Chip Away at Your Balances

Another key credit factor is credit utilization, or how much of your total credit limit you are using. This figure spans all of your open credit accounts. While there isn’t a definite maximum for how high your credit usage should be, the generally accepted rule of thumb is 30%.

So if you have a total credit limit of $5,000 across all your accounts, and your total balances are $2,500, you have a utilization of 50%. That utilization could cause banks to see you as risky, potentially harming your credit score.

If you are in this position, pay more than your minimum payment if possible. Not only can a high utilization hurt your credit score, but it also means you might accrue interest charges every month. Pay as much as you can until you reduce your utilization to no more than 30%.

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Check Your Budget

As mentioned, making your credit card payments on time is important if your score is below 580. However, you may find that money is tight and that making payments is challenging. In this case, you may want to check your budget.

If you don’t have a budget, now is the time to start one. After all, without a budget, you might be spending money without even being aware. Budgeting tools can help you identify those weaknesses, giving you more money to pay off your credit cards.

Pay With Cash

Lastly, you may want to consider paying with cash instead of credit for a period of time. This won’t directly benefit your credit score, but it might be helpful if you are having trouble keeping your balances under control. You could go one step further and use a cash-budgeting method, like budget envelopes. The idea is to exercise restraint until your credit score is where you want it to be.

Bottom Line

A credit score below 580 can seriously limit your options. You might find you are denied most credit cards, and you may not be able to get a mortgage.

All hope is not lost, though — there are many steps to raise your score above 580. These include paying on time, getting a secured credit card, and chipping away at your balances. It won’t happen overnight, but these steps will help you slowly raise your credit score.

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