A credit score of 477 is below the national average and is considered poor. This score is a sign of past credit difficulties or a lack of credit history.
With a poor score, you will find it difficult to be approved for loans or get a credit card as most lenders prefer borrowers with good credit. Don’t lose hope yet. Some lenders specialize in borrowers with poor credit.
Let’s go over what a 477 credit score means, what loans and credit cards you’re likely to qualify for, and the steps you can take to improve your score.
What kind of credit score is 477?
A 477 credit score falls into the poor category anything from 300-579. According to TransUnion, 16% of Americans have a poor score. This score is a sign of past credit challenges – late or discharged payments, high debt levels, accounts in collections, bankruptcy – or no credit history at all.
Lenders use your credit score to assess how risky you are to lend to. If your score is poor, you’re considered high risk. It will be more challenging to get approved for credit, and if you are approved you’ll most likely pay higher fees and interest rates compared to borrowers with good credit. The best thing you can do with a 477 score is focus on building credit.
Can I get a credit card with a 477 credit score?
Obtaining a credit card with a 477 credit score is challenging but not impossible. Most banks and credit card issuers are cautious about issuing cards to consumers with poor credit. That said, you have options. There are subprime credit cards that will consider applicants with little to no credit. These credit cards come with additional fees and high APRs to protect the issuer in case of default.
If you don’t want to pay fees for a subprime credit card, many banks offer secured credit cards designed for individuals looking to improve their scores. These cards require a cash deposit – fully refundable – that serves as your credit limit, reducing the risk to the lender. Secured cards come with lower fees and APRs than unsecured cards for low scores and are easier to be approved for.
A third option is to become an authorized user on a friend or family member’s card. This means that you can use their credit card without having to submit your own application. Ask someone with good credit so your score can benefit from their responsible credit habits.
Can I get a personal loan with a 477 credit score?
Securing a personal loan with a 477 credit score is difficult, as most lenders want a significantly higher score. That said, it’s not impossible to do. Some online lenders and lending marketplaces specialize in loans for individuals with bad credit. Be prepared for higher interest rates and additional fees, reflecting the increased risk the lender is taking.
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Before you take out a loan with a 477 credit score, consider whether you really need the money right now and if can it wait until you’ve improved your score. It’s important to explore all options before taking on additional debt especially when the loans you’ll get will cost more than if you had good credit.
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Take your 477 credit score with a grain of salt
There is no universal definition of bad credit. Lenders have varying score requirements and it’s not always clear what they consider acceptable nor how much weight they give them. Certain lenders give higher preference to your employment and housing situation.
It’s still important to note that a 477 credit score is undeniably low, but it’s not a permanent state. Credit scores fluctuate over time, and with the right strategies, you can improve yours. This perspective encourages proactive steps towards credit repair rather than despair.
How can I improve my 477 credit score?
Improving a 477 credit score requires patience and discipline but it’s not too hard to do. There are five main factors used to calculate your credit score:
- Payment history
- Credit utilization
- Length of credit history
- Credit mix
- New credit
While these are essential to know and follow, the first thing you need to do is understand why your score is so low. Then you can take steps to improve it.
Building credit takes time, it won’t happen overnight, but you may see a boost faster than you’d expect.
Review your credit report
The first step to a better score is to check your credit report. You can get a free copy from each of the credit bureaus – Equifax, Experian, and TransUnion – once a year at annualcreditreport.com. Check your report for errors and if you find any dispute them with the credit bureau. Correcting negative marks can give an immediate boost to your score.
Next, read your report to figure out why your score is poor. Do you have a lot of late or missed payments? Perhaps an account in collections? Is your credit usage very high? Have you applied for a lot of credit cards or loans recently? All of these actions will lower your score.
Do some damage control
Now it’s time to address past mistakes. Call your creditor or collection agency and see what can be done about unpaid accounts. Creditors may be willing to delete negative information if you pay in full or set up a payment plan. Demonstrating a commitment to resolving past issues can positively affect your credit score over time.
If your creditor or collection agency refuses to delete negative marks, don’t despair. Negative information generally stays on your report for seven years, but the more time passes, the less impact it has on your score. Focus on paying your bills on time and keeping your credit utilization low, and your score will improve without any damage control.
Get a secured credit card
For those with a 477 credit score, a secured credit card is often the most effective way to repair credit and establish a positive payment history. Secured cards require a security deposit that sets your credit limit. The deposit is 100% refundable (if you close your account in good standing) and so is arguably a better deal than the annual fee required of subprime credit cards.
The security deposit means you pose less of a risk to the credit card issuer and makes these cards available to just about everyone. Use the secured card to make small purchases and pay your balance in full each month to establish a positive payment history. You may be surprised by the impact even a few months of responsible use can have.
Next steps for your 477 credit score
A 477 credit score means you have a long way to go. This score makes it hard to be approved for loans or get credit cards that don’t require a deposit. But don’t get discouraged. It will take time, but you can increase your score. The more you build up your credit, the more likely you are to qualify for better offers. Take the time to review your report, understand the reasons for your low score, and then work on establishing responsible credit behaviors. Namely, pay your bills on time and in full each month, keep your credit utilization low, and apply for new cards only when needed. As you build credit, be sure to celebrate little achievements along the way. You have a long a long journey to good credit but it’s within your reach.
This content is general in nature and is provided for informational purposes only. MoneyFor is not a financial advisor and does not offer financial planning services. This content may contain references to products and services offered through MoneyFor marketplace.