A 568 credit score can be confusing. Is 568 a good credit score or a bad? What are your financing options with a rating in this range? How can you improve your score?
Whether you’re new or not, credit scores can be tricky things. Sometimes they feel out of your control. The thing is, you can take control and enhance your credit profile.
Let’s go over how to build credit and what financial products are available for consumers with poor credit scores.
Personal loans for a 568 credit score
You may be wondering, “Can I get a loan with a 568 credit score?” The simple answer is yes, but your choices will be limited. Many lenders choose not to approve loans for applicants whose credit scores fall below 600.
That said, not all loans are out of reach. Certain lenders specialize in loans for poor scores. Now, a 568 credit score personal loan won’t come with the most favorable terms and the lender will likely include extra fees and charge higher interest rates. Your best bet may be to go online or visit your local credit union.
The same is true if you want a mortgage. Most financial institutions require a FICO score of 620 or more. When your FICO score falls between 500 to 600 you should look into FHA loans.
Take a look at MoneyFor to find right loan for you.
Age of open accounts
It can take years to improve your score—especially if you’ve experienced financial hardship or setbacks.
| Credit score range | Average age (years) |
|---|---|
| 750-850 | 7.5 |
| 700-749 | 4.0 |
| 640-699 | 3.6 |
| 300-639 | 2.4 |
Read more about your credit score!
Credit cards for a 568 credit score
There’s no way around it: most credit card issuers won’t consider you if you have a FICO score below 580. In fact, some won’t even offer cards to consumers with FICO scores below 670. This is because credit cards are an “unsecured” form of debt—meaning it is not backed by collateral.
Instead what you can get are subprime unsecured cards designed for building credit or secured credit cards.
Unsecured credit card
Unsecured cards for consumers with low credit scores come with higher APRs (annual percentage rates), lower credit limits, and additional fees. The upside is they will report to the credit bureaus. Reporting is the only way your score will improve.
Secured credit card
A secured credit card requires an upfront security deposit, which serves as collateral and typically sets the credit limit. For example, if you deposit $300, your credit limit will be $300. The deposit makes the card accessible to applicants with poor credit or a limited credit history because it reduces the risk for the issuer. The security deposit is 100% refundable, as long as you close the account in good standing.
Secured credit cards often come with lower fees and interest rates compared to unsecured cards for low credit scores. This can make them a more cost-effective option. Secured card issuers typically report to all three credit bureaus, which helps cardholders improve their credit score with responsible use. Over time, consistent, on-time payments can lead to better offers.
Ready for a new card?
Is a 568 credit score good?
So, is 568 a bad credit score or a good one?
There’s no way around the facts. FICO scores of 300-579 are in the poor range. On the positive side, your rating is almost considered fair (580-669). Good credit scores are those above 670 on the FICO scale.
A low FICO score means that you’re a high risk borrower with a poor or limited credit history. Since there’s a high chance you won’t pay on time, financial institutions tend to charge more upfront. Hence the extra fees and high APRs noted on the cards and loans.
Luckily, credit scores are not permanent; you can change them with some consistent effort. There are a number of avenues you can take. Begin by paying down your debts and consistently paying all bills on time. Timely payments, low balances, and patience will pay off.
Fed up with having your applications turned down?
Tips to fix your score
Many factors contribute to your credit scores from the age of your open accounts and credit utilization rate to your payment history. While there are an awful lot of factors, raising your rating follows a few simple rules. We’ll go over FICO scores since they are the most popular scoring model.
FICO scores are calculated by looking at your:
- Payment history – 35%
- Credit utilization rate – 30%
- Length of credit history – 15%
- Types of accounts – 10%
- New inquiries – 10%
Access our comprehensive credit score builder resources – click here!
Review credit reports
A smart way to begin building up your score is to obtain your credit reports from annualcreditreport.com. Your score is drawn directly from the information on your credit report. Read through them to know where you stand and look for for mistakes.
If you find errors on your credit report, dispute them with credit bureaus. Getting a negative mark off your report can give an immediate boost to your rating. The bad news, is you can’t remove accurate negative items, but they generally come off after seven years. Plus their effects lessen with time.
Next look for mistakes that are keeping your score down. Do you have a late payment or two? Is your utilization rate high? Do you have accounts in collections?
You also should monitor your score. Your bank, credit union, or credit card issuer may offer free monthly credit scores.
Need help with your score?
Open new accounts
If you don’t have a card it’s time to get one. Do your research and try to prequalify to avoid multiple hard inquiries. Once you have a card, use it for small purchases and don’t carry a balance.
If you have cards but no loan, securing a loan will add to your credit file. Loans are installment credit while cards are revolving credit. Having a mix of both types of accounts helps. Be sure you can afford the new account since late payments will damage your score.
Make timely payments
The most important scoring factor is a positive payment history. Pay all your debts on time. Consistency is key! By unfailingly showing up with your payments, you build a positive payment history and raise your rating.
Avoid late payments at all costs. If you think you will be late, call your creditor. They may be able to help you keep the late payment from your records!
Don’t spend too much
As a rule of thumb, you want to keep your credit card balance low. Spend less than 30% of your available credit. High balances indicate that you are too reliant on borrowing.
Make small manageable purchases and pay your bill in full and on time. Do not make only the minimum payment as your balance will remain high, you’ll be charged interest, and you can easily to fall into debt.
Need to fix your score?
Frequently asked questions
1. Can I finance a car with a 568 credit score?
Yes, you can get a 568 credit score car loan, but expect the lender to charger higher APRs and offer stricter terms. Consider making a larger down payment or adding a co-signer for better terms.
2. How can I raise a 568 credit score?
Raising your credit score requires paying your bills on time, maintaining a low utilization rate, avoiding hard inquiries, and correcting errors on your credit reports. As positive behavior is reported to the credit bureaus, your score will go up.
3. What can I do to improve a 568 credit score?
Focus on establishing a long and positive credit history. Make timely payments on your bills, pay off debt, keep a low balance on each account, and apply for new credit sparingly. Check your credit reports for any errors and dispute those you find. Consistent efforts will pay off.
Bottom line
I can be disheartening when credit applications are denied due to your very poor credit score. Take heart, you can find a lender willing to work with you.
If you can wait and build credit, that’s even better. With a little work and consistent responsible habits, you’ll be able to jump into the fair credit range.
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.