10 Things To Do Now If You Have a 500 Credit Score

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A poor credit score can be damaging and demoralizing — particularly when you apply for a mortgage, personal loan or new car loan. FICO credit scores range from 300 to 850,  and the higher the score, the less risk is associated with lending money or credit to you. Whether it’s checking your credit score consistently to make sure you’re on track, making timely payments or developing better credit habits to improve your score, little changes can make a big difference in a short period of time. 

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10 Things To Do To Raise Your 500 Credit Score

Most negative assessments on your credit report generally can last up to seven years, making it essential to take steps toward raising your credit score immediately. If you have a low score, these 10 tips can help you move it toward the good credit end of the scale:

  1. Make payments on time
  2. Keep your credit utilization ratio low
  3. Pay down existing debt
  4. Avoid using your cards with a zero balance
  5. Create a budget
  6. Don’t open unnecessary credit cards
  7. Diversify your credit mix
  8. Safeguard against identity theft
  9. Get a secured credit card
  10. Dispute any mistakes on your credit report

1. Make Payments on Time

Your payment history is the first indicator lenders review before approving credit. Setting up automatic payments can help eliminate the need to remember what bills to pay and when, making it harder to miss a payment. Making timely payments consistently could drastically improve your credit score quickly.

2. Keep Your Credit Utilization Ratio Low

When rebuilding credit, a key factor is your credit utilization ratio, which encompasses the total of your credit balances divided by your total credit limit. Having a utilization ratio below 30% makes you more attractive to lenders, indicating you do not max out credit cards.

Ways to decrease your utilization ratio include paying off existing debt and keeping a low credit card balance, as well as piggybacking on the credit account of a responsible user.

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3. Pay Down Existing Debt

This might seem obvious, but reducing your current debt load can boost a 500 credit score. Focus on being aggressive with payments on credit cards with the highest interest rates first.

Check the interest rate of each card on your credit report. Once those cards are paid off, the unused credit lowers your utilization ratio.

4. Avoid Using Your Cards With a Zero Balance

Another component of a credit score relates to the number of open accounts and their balances. If possible, stop using your cards for purchases, especially those with zero balances.

Generally, accounts with zero balances tend to improve your credit score. But restraining from using your credit cards will also help you pay down your debt more quickly.

5. Create a Budget

Budgeting is an effective piece of the credit rebuilding puzzle. It will make apparent what you can and cannot afford, preventing — or at least signaling — potential financial overreach. You can use a helpful budgeting app, such as Goodbudget or YNAB, to make it easier.

6. Don’t Open Unnecessary Credit Cards

Every time you apply for a new line of credit or an unsecured credit card, the application appears on your credit report. Using the credit you’ve already obtained displays your commitment to responsibly managing credit, which can raise your credit score. Plus, having too many credit cards can lead to overexerting funds.

7. Diversify Your Credit Mix

Credit scoring models take into account all types of credit cards and loans. If your credit comes from the same credit source — for example, if all your credit is with major department stores — it can reflect poorly on your credit score.

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Aim for a good mix of credit — that could include credit cards, mortgage loans, installment loans, finance company accounts and retail accounts, according to FICO.

8. Safeguard Against Identity Theft

Fraud can cause irreparable harm to your credit score if not dealt with immediately. Typically, the identify thief maxes out credit cards in your name — and those charges never get paid. An array of identity protection agencies can monitor your spending activity and alert you of risks. Keeping a frequent eye on your credit report can be helpful, too, as new accounts opened in your name will appear on it.

9. Get a Secured Credit Card

One way to reshape your credit history is by using a secured credit card. Secured credit cards require a security deposit, reducing the risk of missed payments because the deposit should, in most cases, cover them. The deposit also acts as the credit limit, unlike with unsecured credit cards.

Secured credit cards allow you to have the flexibility of an unsecured card with the reassurance of a protective deposit. In time with responsible usage, it’s possible to graduate to an unsecured card because you’ve regained trust with card issuers.

10. Dispute Any Mistakes on Your Credit Report

It is possible to find mistakes on your credit report, and if you do, report them right away. Under the federal Fair Credit Reporting Act, you have the right to dispute any information you believe is false.

“Inaccurate, incomplete or unverifiable information must be removed or corrected, usually within 30 days,” according to the FCRA. Be aware that you must make your argument by writing a formal letter.

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Does a 500 Credit Score Get You Anything?

Though your options are limited with a 500 credit score, as it is considered to be in the bad credit territory, lenders may accept you with additional criteria tacked on, such as being informed of your income or employment history. Fees and interest rates will also be affected based on your credit, so be aware that you may get dinged a bit more if your score is lower. 

Final Take To GO

Events such as missed payments, foreclosure and bankruptcy all lead to a poor credit score. A FICO score or other credit score of 500 or below is considered poor. The good news is that no matter the reason for your low score, there are things you can do now to raise your credit score from 500. Outside of building better credit habits on your own, you can also seek the help of platforms such as CreditStrong, where you can grow your savings as you build your credit.


  • Can you do anything with a 500 credit score?
    • It's quite difficult to secure a loan for a home, car or other reasons with a 500 credit score. However, lenders may accept you with additional criteria tacked on, such as being informed of your income or employment history. Fees and interest rates will also be affected based on your credit, so be aware that it may cost you more if you have a lower score.
  • Is a 500 credit score enough for a loan?
    • A 500 credit score is considered poor, which can make it less likely you'll be able to access the same financial opportunities as someone with a higher score. Here are some things to do to improve your score before applying for a loan:
      • Make payments on time
      • Keep your credit utilization ratio low
      • Pay down existing debt
      • Avoid using your cards with a zero balance
      • Create a budget
      • Don't open unnecessary credit cards
      • Diversify your credit mix
      • Safeguard against identity theft
      • Get a secured credit card
      • Dispute any mistakes on your credit report
  • Can I get a car loan with a 500 credit score?
    • Though a 500 credit score is poor, it is possible to get a car loan with a credit score of 500; it will just be more challenging to find a lender willing to approve the loan. It would be advisable to improve your credit before applying to save you on interest and fees.
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Caitlyn Moorhead contributed to the reporting for this article.

Our in-house research team and on-site financial experts work together to create content that’s accurate, impartial, and up to date. We fact-check every single statistic, quote and fact using trusted primary resources to make sure the information we provide is correct. You can learn more about GOBankingRates’ processes and standards in our editorial policy.


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