What Is a Bad Credit Score? | Capital One (2024)

You may know that your credit scores represent your creditworthiness. And that potential lenders might use your credit scores to make decisions about things like approving loans and extending credit. But what does it mean to have a bad credit score?

In general, what’s considered a bad credit score may fall below 670. But that number can vary by who’s judging it. Read on to learn about credit scores, how they might affect you and a few tips that may help you improve your score.

Key takeaways

• A bad credit score may fall into credit score ranges that the credit-scoring companies, FICO® and VantageScore®, consider fair, poor or very poor.
• FICO says a fair credit score ranges from 580 to 669, while VantageScore says fair credit scores range from 601 to 660.
• A poor FICO credit score might be considered less than 580. A poor VantageScore credit score might be 600 or less, with very poor scores as 499 or less.
• It’s possible to improve a bad credit score by using credit responsibly—doing things like paying bills on time and reducing overall debt.

A bad credit score typically falls into what’s called a “subprime” credit range. Although it can vary by credit-scoring company, a subprime credit score may be somewhere below 670.

Credit-scoring companies use different formulas, or models, to calculate credit scores. There are many different credit scores and scoring models. That means people have more than one score out there. But most credit scores range from 300 to 850, according to the Consumer Financial Protection Bureau (CFPB). The most commonly used credit scores come from FICO and VantageScore.

Remember that credit decisions—and what’s considered a bad score—are often determined by potential lenders. But here’s how FICO and VantageScore generally view credit scores.

VantageScore says a bad credit score may fall in the fair, poor or very poor credit score ranges. VantageScore considers a fair credit score to range from 601 to 660. A poor credit score falls between 500 and 600, while a very poor score falls between 300 and 499.

“In general, people with higher scores can get more credit at better rates,” VantageScore says. So you could have trouble getting approved for higher-limit, low-interest cards with a credit score of 600 or below.

There are a few factors that credit-scoring companies use to determine credit scores. And according to the CFPB, they’re all calculated based on data from credit reports.

Scoring models might use the following information from your credit reports:

1. Payment history: How often you pay your bills on time.
2. Account history: How long you’ve had credit and loans open.
3. Debt: How much you owe across all accounts.
4. Credit utilization: How much credit you use compared to your total available credit.
5. Recent inquiries: How many times creditors have pulled your credit report, and how many new loans you have.
6. Credit mix: How many kinds of credit you use, including credit cards and installment loans.

Keep in mind that past bankruptcies, foreclosures and collections may also figure into your credit score. And the CFPB says those things can sometimes affect scores for 10 years or longer.

Everyone’s situation is different, but a bad credit score could affect your financial goals and lending options. Here are some instances where a higher credit score can be helpful:

• Credit cards: With some improvement of your credit score, you might increase your chance of qualifying for cards with no fees and higher credit limits.
• Loans and mortgages: A higher credit score could help you get approved for auto loans, mortgages and other types of loans.
• Interest rates: In many cases, a higher credit score could help you pay less in interest—or the price you pay for borrowing money.
• Rental applications: When you apply for a lease, your potential landlord could look at your credit to consider leasing to you.
• Employment applications: Potential employers may pull credit reports during a background check. But they have to get permission from you first.
• Insurance premiums: In some states, your credit history could influence the cost of things like car insurance.
• Deposits: A stronger credit score might allow you to skip security deposits to set up service with utility companies and cellphone providers.

That’s just a quick look at the importance of credit. If you’re not satisfied with your credit scores, there are steps you can take to improve them.

With time, you could improve your credit scores. It might help to commit to responsible credit use and good financial habits, such as:

1. Review your credit report: You can get a sense of where you stand by requesting free copies of your credit reports from AnnualCreditReport.com. You could also monitor your credit with CreditWise from Capital One without hurting your score. It’s free for everyone, not just Capital One customers.
2. Pay your bills on time and catch up on overdue bills: Your payment history plays the biggest part in some FICO and VantageScore credit-scoring models. The CFPB says getting current on payments and making on-time payments from now on could help improve your credit score. If you’re unable to pay your bills, consider reaching out to your lender about what options might be available.
3. Become an authorized user: The CFPB says being an authorized user could help your credit if the card’s activity is reported to credit bureaus and the card is used responsibly. But things like missed payments could have negative effects on both you and the original cardholder.
4. Consider a secured credit card: With secured credit cards, you’re required to put down a security deposit before you start to spend. Some credit card companies report secured card activity to credit bureaus. If approved for a secured credit card, you could help your credit score by using the card responsibly.
5. Keep some of your credit available: Your credit utilization—the percentage of your available credit that’s in use—can also affect your credit score. The CFPB recommends using 30% or less of your credit limits across all your accounts.