Credit cards for a 524 credit score are a rare find, but they exist, as do loans. The catch is you won’t get the best products on the market.
Is 524 a bad credit score? Yes. Scores in the 500 range are well below the average credit score and are considered poor. They indicate past mistakes or a lack of credit history.
All is not lost. Let’s go over what you can get with a 524 credit score and how to improve it.
Is 524 a good credit score?
How bad is a 524 credit score? It is poor. FICO scores from 300 to 580 fall in the very poor range.
Many lenders choose not to work with borrowers whose scores fall below 580. Consumers with scores in the very poor range are considered high risk borrowers. It’s common for credit card applicants to encounter additional fees, and loan applicants may be given unfavorable terms.
Read more about your credit score!
What are the best credit cards?
Is 524 bad credit when applying for a credit card? Yes, but there are cards specifically designed for low scores.
Unsecured credit card
Unsecured cards for low credit scores come with higher APRs (annual percentage rate), low limits, and additional fees. The good news is they don’t require any money upfront.
Store credit card
A store card is often easier to qualify for and gives discounts or rewards at the associated store. It also will have a high APR and can only be used at the issuing retailer.
Secured credit card
A secured card is the easiest to be approved for since it requires a fully refundable security deposit. The deposit serves as collateral in case you don’t pay a bill and sets your limit.
How does an unsecured card sound?
What are the best loans?
You can get a loan with a 524 credit score. A 524 credit score loan will likely be secured or have less than favorable terms.
Personal loans
A 524 credit score personal loan will come with a high interest rate, extra fees, and may require a a co-signer.
Secured loans
Secured loans require collateral; a car or savings account. They often charge less interest, but you risk losing your asset if you don’t repay as agreed.
Auto loans
Car loans are very difficult to get with a poor score. Look for specialized lenders and be prepared to pay extra fees and a larger down payment.
Loans with no minimum score required
Credit scores are not always a qualifying factor. Some online lenders look instead at your income, housing situation, and employment to determine if you’re eligible. The bad news is that these loans often have very high APRs.
What are the consequences of skipping a loan payments?
What interest rate can I expect with a 524 credit score?
You can expect significantly higher APRs, often ranging from 20% to 30% or more, for personal loans and credit cards.
Car loan rates
524 credit score car loan rates range from 15% to 20% or more.
Mortgage rates
Mortgage rates often exceed 8% to 10%.
Number of open accounts by score range
| Score Range | Average Number of Open Accounts |
|---|---|
| 750-850 | 3 |
| 700-749 | 4 |
| 640-699 | 4 |
| 300-639 | 4 |
How to improve a poor credit score
When your score is 524, the best thing you can do is improve it.
Credit scoring models consider:
- Payment history
- Usage
- Length of credit history
- Credit mix
- New accounts
Let’s go over how to fix a 524 credit score.
Pay on time
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Consistent on time payments help build a positive credit history and will help to increase your score.
Maintain a low balance
Keep your balances low and your credit utilization rate below 30%.
Keep cards open and active
Each account increases the length of your credit history. The older the average age of your credit accounts, the higher your score.
Apply sparingly
Each time you apply for a new credit account, the lender conducts a hard inquiry, which lowers your score. Only apply when you need to.
Tired of denied applications?
Products that boost credit scores
Track your score
Monitor your credit score so you know where you stand. Stay updated on changes, identify errors, and understand how your behavior impacts your score.
Start budgeting
Budgeting apps help you live within your means and make it easier to pay off your bills on time each month.
Set up autopay
Autopay or payment reminders are an easy way to protect yourself from late payments.
Add monthly bills to your credit report
Certain companies report all your monthly bills to the national credit bureaus so you can boost your rating with on-time rent, utility, subscription payments, and more.
Take out a credit builder loan
The money you borrow is held in an account while you make small monthly payments. Once the loan is paid off, the lender reports your positive payment history, and you will receive the funds.
Concerned that your score might be too low?
How can a good score benefit you?
A higher credit score offers numerous benefits. The biggest is saving money on interest. Let’s go over a few other benefits.
Lower insurance premiums
A good score can lead to lower insurance rates, as insurers often use credit scores to assess risk.
Larger credit limits
Lenders are more likely to offer larger limits to credit card applicants with good credit scores. Higher limits give you more spending power and help you maintain a low utilization ratio.
Increased housing options
A higher credit score makes it easier to qualify for mortgages with favorable terms or be approved for an apartment.
Eager to boost your credit score? Check out Credit Score Builder now!
Resources for a poor scores
How to repossess your car
Your options include:
- Pay the loan balance in full
- Negotiate a reinstatement
- Bid at auction
Communicating with the lender promptly can also provide additional options.
Payday loans with prepaid debit cards
It is possible to get a payday loan with a prepaid debit card. Always review terms carefully and consider alternatives since most come with high APRs of 400% and very short repayment periods.
Cash advances that don’t require direct deposit
Credit card cash advances are a possibility but they are costly with high APRs, no grace period, and additional fees.
Frequently asked questions
1. How did my credit score go from 524 to 300?
A major drop can be the result of multiple missed payments, increased debt, defaults, collections, bankruptcy, or foreclosure. Check your credit reports to find out why and dispute any errors.
2. My credit score is 524, can I buy a car?
Yes you can buy a car with a poor credit score but you’ll need to find specialized lenders and will pay more in interest.
3. My credit score is 524, can I buy a house?
You can buy a house, but it will cost you more.
4. Can I secure a mortgage with a 524 score?
Yes, your best option is an FHA loan from the Federal Housing Administration.
Bottom line
A credit score of 524 makes borrowing difficult but not out of the question. Certain lenders will approve you. You simply need to find the right one.
Better yet, take the time to raise your rating. The higher your score, the more money you’ll save and the more rewards you’ll receive.
Go to MoneyFor for tips and tricks.
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.