A 552 credit score is in the poor category according to the FICO scoring model. It is well below the national average credit score and is not a rating that lenders look kindly on.
That said, it is still possible to borrow money with bad credit. While it will be challenging to obtain loans that don’t cost an arm and a leg or a card without a security deposit, it’s not out of the question. You can find willing lenders if you know where to look.
Let’s delve into the types of loans and cards you can get with your current rating. Plus how to enhance your score so that you will have even more options and be able to save hundreds or thousands when you do borrow.
Popular credit cards for a 552 credit score
When you have a credit score of 552 your card options will be limited. You can either get a secured card or a subprime card.
Secured credit cards are typically less expensive. You do have to put up a security deposit – 100% refundable – to access this card. The security deposit sets your limit. It also minimizes the risk for the issuer making secured cards more accessible to applicants with low scores.
If you choose a secured credit card, make sure the issuer reports your payments to all Equifax, Experian, and TransUnion, not all secured card issuers do. Reporting your payments is the only way you’ll improve your score.
Unsecured credit cards are your other option. These are traditional cards that do not require a security deposit. Unsecured cards that approve candidates with a 552 rating will be subprime and likely charge a higher interest rate, annual fee, monthly maintenance fee, and come with a lower credit limit.
Before you opt for a subprime unsecured card it’s important to read the fine print. Make sure you can afford the payments and that the issuer reports to the major bureaus.
Can’t wait to apply for a credit card?
What are the best personal loan options for someone with a 552 credit score?
You can get a loan with a 552 credit score but it can be a little tricky. Many big banks are hesitant to offer unsecured loans to consumers with poor scores. You’ll have to go with alternative lenders.
A lot of online lenders specialize in offering loans to consumers with low ratings. The loans you’re offered will likely come with high interest rates, extra fees, and more stringent repayment terms. Always try to prequalify and compare loan offers before you formally apply.
Online lending platforms make it easy to prequalify before you apply. All you have to do is fill out one form and they will match you with potential lenders in their network. No hard inquiry that hurts your score!
You then compare loan offers from multiple lenders and find the best one for you. Look at the interest rates, fees, loan amounts, repayment terms, etc. Do not take out a loan you cannot afford. You’ll only find yourself in a worse financial position than before.
Your local credit union is another good option. These member-run institutions tend to have more flexible lending criteria compared to big banks. Many offer personal loans up to $2,000 and have a cap on interest rates and fees so they don’t get out of hand. The only issue is you likely have to be a member to apply.
Cash advance apps are a newer service that provides instant cash – usually up to $500 – with no credit check, no interest, and little to no fees. They do have short repayment terms – usually by your next payday – and many will ask for an optional tip. Be careful how much you tip – it’s not like tipping wait staff – as a small dollar amount can actually be a very large APR. Also, keep in mind that your next paycheck will be for less.
What does it mean to have a 552 credit score?
Is 552 a good credit score? As we said earlier it is not a good score, it is actually pretty bad. Any FICO score below 580 is considered poor. Lenders are less willing to work with consumers with poor scores as they are at higher risk of default.
What is a 552 credit score? With a 552 rating, you likely have a history of late payments, defaults, accounts in collections, and even past bankruptcies. All these negative marks will make lenders cautious about working with you. You will likely be offered loans or cards with high interest rates, lower borrowing limits, extra fees, and stricter repayment terms. All this can make borrowing very expensive.
The best thing you can do with a score below 580 is to raise it. The higher your score, the better financial products you’ll be able to access. Think loans with favorable terms and cards with no annual fees.
According to Experian, scores have been going up on average over the years. Currently, the national average credit score is 716, which falls squarely in the good category. Only 16% of consumers have FICO scores in the poor range.
Can you get approved with a 552 credit score?
552 is a bad credit score but that doesn’t mean you can’t get approved. Your rating is used to determine how likely you are to repay a loan. A poor score indicates that you are less likely to repay and so many lenders are wary of approving you.
Certain lenders will consider consumers with poor scores. The catch is that they will charge you more for the privilege of borrowing. You’ll also likely receive higher interest rates and additional fees like an origination fee or monthly maintenance fee. These extra charges compensate for the risk financial institutions are taking lending to consumers with less than ideal scores.
What makes a good credit score?
A good FICO score is above 670. A higher rating indicates a history of on time payments, low usage, and a mix of different accounts – loans and cards.
FICO scores are broken down into the following ranges:
New
- 800-850: Excellent
- 740-799: Very Good
- 670-739: Good
- 580-669: Fair
- 300-579: Poor
The higher your score, the more favorable lending terms, including lower interest rates and better loan offers.
Getting a good rating is pretty straightforward. It takes time and responsible financial habits but it is within reach.
On-time payments by credit score range
| Credit score range | Average percentage of on-time payments |
|---|---|
| 750-850 | 99.5% |
| 700-749 | 96.7% |
| 640-699 | 93.1% |
| 300-639 | 46% |
How to get beyond a Poor credit score
When your score is only 552 the best thing you can do is increase it. It won’t transform into a good rating overnight, it takes time, possibly even a year. The sooner you get started developing healthy financial habits the sooner your score will thank you.
FICO scores are calculated by looking at these five factors:
- Payment history
- Utilization rate
- Length of credit history
- Credit mix
- Recent inquiries
Review your credit reports for errors
Getting beyond a poor score begins with getting your credit report from each of the three national credit bureaus: Equifax, Experian, and TransUnion. You can get a free copy once a year from AnnualCreditReport.com. Review your reports and look for any errors that could be keeping your score down. Then dispute them with the issuing bureau. Clearing up negative marks can give an immediate boost to your rating.
Next, figure out what mistakes you’re making that are keeping your rating low. Perhaps you have lots of late or missed payments, high debt levels, or accounts in collections. Knowing what you’ve done wrong in the past lets you know what you need to correct.
Catch up on past-due payments
If you have past due payments, the first thing you need to do is catch up and then continue making timely payments. If you’re having a hard time paying your debts, talk to your creditors to discuss payment options. They may offer a hardship plan or reduce interest rates. If you’re still in over your head, reach out to a nonprofit credit counseling agency and ask about setting up a debt management plan.
Interested in consolidating your debts?
Once you’ve caught up on past-due payments, it’s time to start paying your bills on time. Payment history is the biggest factor in determining your FICO score. Set up automatic payments for recurring bills or reminders so you never miss a due date.
Don’t let your credit card balances balloon
It’s never a good idea to max out your cards. High utilization rates signal to lenders that you’re overly reliant on borrowing money and have a higher chance of missing payments.
Keep your utilization rate below 30% and pay the statement balance off in full each month. You’ll reduce the amount of debt you owe, raise your rating, and avoid all interest charges. There’s no benefit to carrying a balance or using a lot of your limit.
Think carefully before closing old credit card accounts
It’s tempting to close old credit card accounts. But think twice before you do so. How long you’ve had credit accounts open counts in calculating your score. The longer your cumulative credit history, the higher your rating.
It’s best to keep old accounts open and active with small monthly purchases. Closing them will lower your rating and increase your utilization ratio. The exception is if your old card has a high annual fee or large monthly maintenance fee. Then closing it may be worth it.
Don’t apply for too many new credit cards at the same time
Multiple applications within a short time will hurt your score. Every time you apply the lender does a hard inquiry which causes your rating to temporarily drop a few points.
To counter this, try to prequalify for cards to get an idea of if you meet their basic eligibility criteria. Then apply for the best offer. If you’re rejected, wait at least six months before applying again. Otherwise, lenders may think you’re desperate and will be even more likely to deny your application.
Go to MoneyFor for tips and tricks.
Bottom line
A 552 credit score will make it difficult to get a card without a security deposit or an unsecured loan with favorable terms. As we’ve discussed though they are not out of the question – lenders will approve consumers with poor credit scores. Do your research and find one willing to take a chance on you.
That said, the best thing you can do is raise your rating. A higher rating means you’ll get more favorable loan offers and cards without all the fees. Enhancing your score will take time but it’s worth the effort.
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.