A 571 credit score is considered poor. Why is 571 a bad credit score? This FICO score is well below the average credit score of 715 and shows either a lack of credit history or a credit report riddled with late payments and high debt levels. When your rating falls into the poor range it’s tough to qualify for financial products with good terms.
Luckily there are personal loans and credit cards on the market for poor scores. Let’s find out what cards and personal loans you can access plus how you can improve your 571 credit score.
Key takeaways for a 571 credit score
- A 571 credit score is below the average score and is classified as a poor by FICO.
- You can qualify for personal loans with a poor FICO score, but they will cost more.
- Your credit card options will be limited, but there are cards for poor scores.
What are the best personal loan options for someone with a 571 credit score?
When you’re looking for a 571 credit score personal loan, you will have limited options. Most lenders prefer an average score above 600. The best options will be from reputable online lenders with low minimum score requirements.
Personal loans
Loan marketplaces
Loan marketplaces are a good place to start. You submit one application and are connected with multiple lenders at once. Compare offers then apply with the lender who gives you the best deal.
Credit unions
Many credit unions offer personal loans for larger amounts and with lower interest rates, fewer fees, and longer repayment terms than big banks. The catch is you usually need to be a credit union member to apply.
Cash advance apps
Cash advance apps send you a portion of your pay instantly, before payday. Most operate with no credit check, no interest, and little to no fees. They can be a helpful solution in a financial pinch.
Credit builder loan
A credit builder loan is designed to help build a positive payment history. Instead of receiving the loan amount upfront, it is held in an interest-bearing savings account, which you cannot access until the loan is fully repaid. You make fixed monthly payments over a set period, which are reported to the three major credit bureaus. Once the loan is paid off, you receive the funds and your rating should go up.
Car loans
Securing a car loan can be challenging, but it’s not impossible. There are lenders who specialize in auto loans for individuals with lower scores. You will likely face higher interest rates and be required to place a larger down payment. It’s important to shop around and compare offers to ensure you get the most favorable terms.
More flexible loan terms
Finding loans with flexible terms can be difficult when you have a low rating. Most personal loan options for poor scores come with strict terms that protect the lender. You’re likely to find short repayment terms and extra fees tacked on.
Before you sign any agreement, take the time to understand the loan terms and conditions. Compare offers from multiple online lenders to ensure you find the best loan for you.
Facing a cash crunch?
Popular credit cards for a 571 credit score
There are plenty of credit cards for 571 credit score. They might not come with huge bonuses or lucrative rewards, but they can help in establishing a good rating.
Unsecured credit cards for a poor credit score
Unsecured cards for poor scores are designed for raising your rating. This type of card typically comes with a low limit, annual fee, and high interest rate.
Secured credit cards
Secured cards are very easy to be approved for since they require a security deposit – 100% refundable. The deposit sets your limit and serves as collateral, reducing the lender’s risk.
Using your card responsibly – making timely payments and keeping your usage low – lets you move into the good range.
Check out more credit card options.
What does it mean to have a 571 credit score?
We’ll give it to you straight. 571 is not a good credit score. FICO scores from 300 to 579 are considered poor. A poor score makes it harder to qualify for personal loans or cards with favorable terms.
FICO scores are broken down into the following five ranges:
- Exceptional: 800-850
- Very Good: 740-799
- Good: 670-739
- Fair: 580-669
- Poor: 300-579
Lenders use your rating to assess how likely you are to repay what you owe. If your score is 670 or higher you’re considered a low risk borrower. On the other hand, if your rating is in the poor or fair range you’re classified as high risk.
Not without reason, 33% of consumers with a FICO score of 571 have a credit history showing debt payments 30 days or more late in the past ten years. Roughly 62% of consumers with scores under 579 are likely to go more than 90 days past due on a debt payment. These statistics make lenders wary. If you are approved for a loan or card with a 571 credit score you will likely encounter higher interest rates, extra fees, and unfavorable terms.
That said, you can raise your rating. You are right at the cusp of the fair range – a milestone. To boost your score you’ll need a lower utilization ratio and positive payment history. It will take time but it’s well worth it.
Read more about your credit score!
Looking to enhance your credit rating?
Can you get approved with a 571 credit score?
A rating of 571 is good enough to get you approved for certain financial products. You can easily be approved for a secured loan – requires an asset – or secured credit card.
New
If you don’t want to put down a security deposit, look at unsecured cards for poor scores. These cards can be expensive and will have small limits but are accessible.
Unsecured loans are possible through online lenders who look beyond your rating and consider other factors like income or employment history. Note that these loans can be expensive.
Unfortunately, most mortgage lenders will refuse to work with applicants with scores below 620.
What makes an impact on your credit scores
Your score is similar to a grade for your financial performance. It tells lenders how dependable you are at repaying loans.
Credit scores are calculated by weighing the following factors:
- Payment history
- Utilization rate
- Length of time you’ve had account
- Mix of accounts
- New inquiries
Click here to access credit score builder guides!
Timely payments
Paying your bills on time is the best way to establish a positive payment history. Even a single missed payment can stay on your reports for up to seven years and have a major negative effect on your score.
Credit utilization rate
Your utilization rate is your current balance vs. your total limit. Lenders want you to have a low utilization rate – less than 30%.
Length of credit history
How long you’ve had accounts matters. Lenders want to see more data showing that you will repay what you owe.
Credit mix
It is a good idea to have multiple credit accounts. Lenders want to see that you can handle different types of borrowing – cards, personal loans, or even a home loan – responsibly.
New inquiries
Every time you apply for a new account the lender will conduct a hard inquiry. This will drop your rating temporarily by a few points.
Mismanaging your debt could impact your credit!
Age of open accounts by credit score range
| Score range | Average age (years) |
|---|---|
| 750-850 | 7.5 |
| 700-749 | 4.0 |
| 640-699 | 3.6 |
| 300-639 | 2.4 |
Improving your credit score
The best thing you can do when you have a poor FICO score is to take steps to improve it. We went over what factors affect scores above, now let’s look at some practical measures you can take to raise your rating.
Make a monthly budget
Take the time to figure out how much you can afford to spend each month. Giving yourself a limit will make it easier to keep your balances low and pay your bills on time.
Pay your bills on time
Pay all your bills on time to get a higher credit score. A positive payment history will do wonders for your rating. Set up reminders on your phone or enable automatic payments so you never miss a due date.
If you feel like you’re about to miss a payment, call your issuer and explain your situation. They may be able to come up with a solution before it ends up on your reports.
Pay off your debt
Prioritize your debt payments. If you have any accounts in collections pay them off and keep them current. A high level of debt or a high balance is detrimental to your score.
Debt management plans
A debt management plan can help you get out of debt faster and for less. Talk to a credit counselor from a nonprofit agency to help set one up.
Think carefully before closing old credit card accounts
Closing old accounts is tempting, but don’t. Closing an account will shorten the average age of your accounts and lower your total limit.
Instead, keep old accounts open and active with a small recurring charge and autopay.
Don’t apply for too many new credit cards at the same time
A hard inquiry is made each time you apply for a new account. This can temporarily reduce your score. Space out applications by at least six months to let your rating rebound.
Curious about how credit repair companies can help?
Bottom line
Even though a 571 rating is not ideal, things can still work out. You can access cards and loans, but they will cost more.
Take the time to boost your score by establishing sound financial practices. Create a budget, pay your bills on time, cut down on debt, and manage your accounts wisely. Be persistent and your score will soar.
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.