A 579 credit score is not the best possible FICO score for a consumer in 2024. The good news is, it’s not the worst either. 579 is considered a poor credit score but it is only one point away from being in the fair range.
It will be tough to secure a loan or credit card with a below average credit score but it’s far from impossible. Plenty of lenders accept applicants whose FICO scores fall in the poor or fair categories.
Today, we’ll walk you through what a 579 credit score means, what loans and cards you’ll qualify for, and how you can raise your rating. Let’s start with learning what a bad rating can do to your finances and how to improve it.
Credit cards with a 579 credit score
579 credit score credit cards can be hard to find, but they exist. Your choices will be limited to subprime unsecured cards, secured cards, or becoming an authorized user on some else’s card.
Being an authorized user means that your score can benefit from the primary cardholder’s good financial habits. Be sure to ask a trusted friend or family member with a good score if they’ll add you to their card.
Unsecured credit card
Cards that don’t require a security deposit to create an account are known as unsecured cards. Even while they could be more difficult to get if your rating is 579, some issuers offer cards designed specifically for people with poor scores.
The catch is, that compared to cards provided to people with better ratings, they frequently have higher interest rates, lower limits, and fewer benefits. Weigh the cost of the card with the benefit of having an unsecured card before you take one on.
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A secured card is easy to get because it requires a security deposit – 100% refundable – that sets your limit and acts as collateral. If you fail to pay, the card issuer can take the money from your deposit. These cards can be a good way to raise your rating since the issuer typically reports to all three main credit bureaus and the card usually comes with lower interest rates and fewer fees than unsecured cards for poor scores. Some issuers will even upgrade you to an unsecured card after a period of consistent on time payments.
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Personal loans with a 579 credit score
There are 579 credit score personal loans available. You simply need to know where to look.
Online lenders
A lot of online lenders specialize in loans for subprime scores – under 670. These lenders look at factors other than your rating including your income and employment history. A high income and stable employment will benefit your application even if your score is very poor.
Take a look at online loan marketplaces. These marketplaces allow you to connect with multiple direct lenders whose loans you qualify for by submitting a single loan application. This way, you get to prequalify before you apply.
Prequalifying does not guarantee that you’ll be approved. What it does is allow you to compare loan options and then apply for the best deal – all without hurting your rating. Compare the loan amount, interest rate, fees, and repayment terms to ensure you get the best loan possible.
Credit unions
Credit unions tend to offer loans with more favorable terms and more lenient eligibility requirements than big banks. One type of loan they have for members with poor FICO scores is a payday alternative loan (PAL). These were created in response to payday loans and their excessive costs.
PALs are structured to promote financial stability and affordability for borrowers. The interest rate cannot exceed 28% (a low rate for a subprime loans) and the application fee cannot exceed $20. The repayment terms range from one to six months and the loan amount ranges from $200 to $1,000. You do have to be a member of a credit union to qualify.
Make sure the lender reports payments to help improve your score.
Cash advance apps
A newer option for a 579 credit score loan is a cash advance or paycheck advance app. These apps let you access the money you’ve earned instantly before payday. Most come with no interest, no hard pull, and little to no fees.
The repayment terms are short – usually your next payday. The good news is the money will be debited from your direct deposit paycheck so you don’t have to worry about missing a payment. Plus, a lot of apps will let you reschedule the payment if you need to.
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How a bad credit score can hurt you
579 is a bad credit score. Bad scores can be caused by a number of things including late payments, heavy utilization, or accounts in collection.
A 579 credit score can make it difficult to borrow money in any form. You will have a hard time getting a loan or card that isn’t secured when your FICO score falls in the poor or bad range. Most lenders prefer applicants who have a good rating since they have proven themselves reliable at repaying the money they borrow on time.
When your score is poor, you will likely be granted loans with less advantageous terms. This can mean a shorter repayment period, higher interest rates, and additional fees. Most cards you’ll be offered will be secured. You can fix your rating with a secured card, however, you must pay a security deposit, usually $200, to obtain an equivalent credit limit.
There are unsecured cards for poor scores, but these will come with high APRs (annual percentage rates), low limits, and additional fees like an annual fee.
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The impact of a bad credit score
Contrary to popular belief, a bad score can have significant consequences beyond what loans and cards you’ll be approved for. Low ratings can make it difficult to rent an apartment as landlords want assurance you’ll pay rent on time. Utility companies may require a security deposit in order to establish utility services. It can even work against you while applying for jobs. In certain states, you may be required to pay higher insurance premiums.
Your FICO score is an indication of how reliable you are at repaying what you owe as agreed. When your rating is poor, you are not considered a reliable borrower and this will affect other aspects of your life. Basically, it will make things more difficult and cost you more. The financial benefits of raising your rating are numerous.
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What makes a good credit score?
We’ve established that 579 is not a good credit score, but what makes a good score?
Scoring models generally classify credit scores into several ranges. Both Vantage and FICO scores range from 300-850. The exact ranges vary based on the credit scoring model used.
FICO scores are broken down into 5 categories:
- 800-850 – Exceptional
- 740-799 – Very Good
- 670-739 – Good
- 580-669 – Fair
- 300-850 – Poor
Creditors typically see a score of 670 or higher as acceptable or lower risk. In contrast, a FICO score below 670 is considered subprime. FICO scores below 580 are classified as deep subprime. Applicants with a subprime or deep subprime FICO score will have a difficult time obtaining loans or cards.
In contrast, applicants with FICO scores above 670 will have an easier time obtaining loans with more favorable terms and cards with rewards and perks. FICO scores in the good range are the result of responsible financial habits. Namely paying all bills on time and not being dependent on borrowing money.
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Factors that impact your credit score
Understanding the various factors that impact your score is the first step toward improving it. Here are the key components that determine your FICO score:
- Payment history (35%): Your payment history is the most influential factor in calculating your FICO score. It includes your track record of paying bills, loans, and other debts on time. Late payments, defaults, bankruptcies, and other negative financial events can significantly lower your score.
- Utilization ratio (30%): Your utilization ratio measures how much of your available credit you are using at any given time. It is recommended to keep this ratio below 30% to show that you are not overly reliant on borrowing money, which lenders favor.
- Length of time you’ve had accounts (15%): A longer credit history provides more data for lenders to assess your financial behavior and reliability. This factor considers the age of your oldest account, the age of your newest account, and the average age of all your accounts.
- Types of accounts (10%): Having a mix of different types of accounts, such as cards, auto loans, and personal loans, can positively affect your rating. It shows that you can manage various types of borrowing responsibly.
- New inquiries (10%): Opening several new accounts in a short period can be seen as risky by lenders and can temporarily lower your score. This includes the number of recent inquiries into your credit report as frequent checks can imply financial instability.
Each of these factors combines to form a comprehensive picture of your financial responsibility and creditworthiness. By focusing on these areas, you can work towards improving your FICO score. A better rating will increase your ability to secure loans and cards under favorable terms.
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How to improve your 579 Credit Score
Raising your rating isn’t that hard. It means establishing responsible financial habits – namely a positive payment history and low utilization. Here are a few easy actions you may do to raise your 579 credit score:
Check your credit reports to understand your scores
Check your reports often to find out where you stand. You can get a free report from each main credit bureaus once a year via AnnualCreditReport.com.
Review your reports. Look for any inaccurate negative marks. If you find any, dispute them with the issuing bureau. Getting negative marks off your report can give an immediate boost to your rating.
Then pinpoint what’s dragging your score down. Do you have a lot of missed payments? Are there a lot of hard inquiries in a short period? Is your utilization rate too high? Now that you know what you’re doing wrong you can take steps to correct it.
On-time payments by credit score range
| Score range | Average percentage of on-time payments |
|---|---|
| 750-850 | 99.5% |
| 700-749 | 96.7% |
| 640-699 | 93.1% |
| 300-639 | 46% |
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As you can see from the chart, there’s a positive correlation between higher scores and timely payments. Always pay all your bills on schedule. Set up autopay or reminders so that you never miss a due date. A positive payment history is the best thing you can do for your rating.
Keep your balances low
Your credit utilization rate should be below 30% of your limit. Less than that is even better.
On time payments will help you keep your balances low and your utilization rate in the ideal range. You can also make payments throughout the month to maintain a low usage rate.
Steady does it
Lenders don’t like change. They prefer things to be predictable. So think twice before you close an account or apply for a new card or loan.
Each time you submit an application, the financial institution will conduct a hard inquiry. This will temporarily lower your score by a few points. One hard inquiry isn’t a problem; your rating will bounce back within a few months to a year. Multiple hard inquiries can do damage to your score. Wait at least six months between card applications.
The same rational applies to closing old accounts. Lenders also like a lot of data to look at. If you close an account, they lose that data and you get a shorter credit history. Keep your accounts open and active unless the card has a lot of fees and is to expensive. Then it’s better to close it.
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Bottom line
Getting approved for an unsecured card or loan may be difficult but possible with a 579 credit score. The most practical and cost-saving thing you can do is raise your rating. Do this by practicing good money habits like paying your bills on time, paying off debt, maintaining a low utilization rate, and keeping an eye out for mistakes on your reports.
Furthermore, look into a secured card or credit builder loan to help establish or repair your score. These loans can be a good tool to raise your rating and save money at the same time. Remember that sound money management is essential to your financial well-being, regardless of your score.
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.