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589 Credit Score: Is It Good or Bad?

589 Fair
Updated April 6, 2024
Written by Rachel Alulis

If your credit score hovers at 589, you're under the national average of 715, placing you in the subprime credit range. Nevertheless, this score doesn’t entirely prevent you from securing loans or qualifying for certain credit cards. The issue is the loans and cards you will be approved for come with higher interest rates, additional fees, and less favorable terms than those offered to consumers with good to excellent credit.

A 589 credit score is considered fair. Any score from 580-669 falls into the fair category. A fair score indicates either past financial mistakes or a limited credit history but is notably better than having poor or bad credit.

We'll examine the nuances of a 589 credit score and discuss measures you can take to elevate your score, thereby granting you access to superior financial products in the future.

 

What kind of credit score is 589?

A 589 credit score is considered fair, placing it in a category where 18% of Americans find themselves. Lenders use your credit score to gauge the risk associated with lending you money, essentially assessing how likely you are to repay borrowed funds. A fair score indicates a higher risk compared to those with good or excellent credit, but it is still better than having poor or bad credit. 

A fair credit score often suggests a history of credit mishaps. These can include late payments, high debt levels, or accounts in collections. It can also indicate a lack of credit history altogether. Consequently, obtaining loans or credit cards with favorable terms can be challenging. To qualify for credit with a fair score, you will need strong qualifications in other areas, such as steady income, stable employment, and a manageable level of existing debt.

When you do qualify for credit, the terms are often less favorable. You may encounter higher interest rates and additional fees, making borrowing more expensive. Lenders view you as a higher-risk borrower and compensate for that risk by charging more. It may not be fair, but financial institutions are for-profit, and they have to make their money, too. The best thing you can do is move out of the fair range.

Improving your credit score is essential for accessing better financial products. This can be achieved by making timely payments, reducing debt levels, and avoiding new credit inquiries. It will take time, but credit scores are malleable. Over time, these actions can help you move into a higher credit score category, making it easier and more affordable to borrow money in the future.

 

Can I get a credit card with a 589 credit score?

Getting a credit card with a 589 credit score is feasible, although your choices will be somewhat restricted.

These cards are considered subprime credit cards and provide access to credit regardless of your score. With a fair credit score, you will have a wider range of these cards available to choose from. Usually, they are basic credit-builder cards with few perks or rewards. However, it is possible to find rewards cards in this bracket if you do a little research. The problem with most subprime credit cards is they come with substantial fees and an elevated APR. Before you apply, make sure that you can afford them. Once you have your card, use it responsibly and make timely payments to build credit. As your score improves and moves into the good range, you will qualify for cards with better perks and fewer fees.

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A secured credit card could be a smarter choice for those with fair credit. Secured cards have lower fees and interest rates than their unsecured subprime counterparts. The catch is they require a refundable security deposit upfront. The deposit not only determines your spending limit but also minimizes risk for the credit card provider by acting as collateral should you miss a bill. These cards are designed to help individuals rebuild or establish credit, as they report to the major credit bureaus, allowing responsible usage to positively impact your credit score over time.

For those aiming to better their credit situation, secured cards represent an excellent starting point. They provide an opportunity to bolster your score and foster responsible credit use, paving the way to qualify for a standard credit card with favorable terms and benefits. Over time, with consistent on-time payments and responsible credit use, you can graduate to an unsecured card with better perks.

Alternatively, you could become an authorized user on someone else’s account. This approach grants you access to credit and the chance to benefit from a friend or family member’s positive payment history and low credit usage, all while bypassing the need for your own credit application. As an authorized user, their good credit behavior can reflect positively on your credit report, helping to boost your score. However, it’s crucial to ensure that the primary account holder maintains good credit habits, as their negative actions can also impact your score.

One strategy to increase your chances of approval and improve your credit score over time is to prequalify for a credit card. Prequalification involves a soft credit inquiry, which doesn't affect your score and helps you understand which cards you might qualify for. This step can prevent unnecessary hard inquiries that could further lower your score if you’re denied. After you prequalify, compare card offers and choose the best one for you.

Can I get a personal loan with a 589 credit score?

You can get a personal loan with a credit score of 589, but be aware of the potential drawbacks. Loans for fair credit scores often come with higher interest rates, numerous fees, and inflexible repayment options. Nevertheless, you do have options and should consider all of them to ensure you choose the best loan for your situation.

Secured Loans: Secured loans are an option to consider for those with fair credit. These loans require collateral, such as a car, house, or savings account, which reduces the lender's risk and often results in lower interest rates compared to unsecured loans. However, if you default on a secured loan, the lender can seize the collateral. It's essential to weigh the risk and ensure you can meet the repayment terms before committing to a secured loan.

Joint Loans: Joint loans are another possible option. By applying with a co-signer or co-borrower who has very good or excellent credit, you may qualify for better loan terms. The co-applicant shares the responsibility for the loan, which lessens the risk for the lender. This means they are more likely to approve you with better terms. The concern here is if you default, both your and your co-applicant's credit scores will be negatively affected.

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Credit Union: Credit unions are often more flexible than traditional banks and might offer better terms to members with fair credit. These not-for-profit institutions typically have lower interest rates and fees. For instance, Payday Alternative Loans (PALs), offered by federal credit unions, have a cap of 28%. Membership in a credit union usually requires meeting certain criteria, such as living in a specific area or working in a particular industry, but the benefits can be substantial for those who qualify.

Online Lenders: Online lenders have revolutionized access to personal loans, especially for those with less-than-perfect credit. These lenders use advanced algorithms to assess risk, often providing quicker approvals and more personalized loan terms. While they can offer competitive rates, it’s crucial to research and choose reputable lenders to avoid predatory practices.

Loan Marketplaces: Online marketplaces often offer loans to those with fair or poor scores. These marketplaces connect borrowers with lenders who look beyond your credit score, placing greater emphasis on your income, employment status, and overall debt situation. You will receive offers and then compare them to find the most advantageous deal. Apply directly with the lender who offers the best loan with the lowest costs.

Cash Advance Apps: Cash advance apps provide a short-term solution for those in need of quick cash. These apps allow you to borrow a small amount of money against your next paycheck. There is no credit check, no interest, and few fees. Cash advance apps either charge a flat rate per advance, a subscription fee, or ask for a tip. Many have an optional fast funding fee in case you need your money instantly and can't wait one to three business days. The money is usually automatically withdrawn from your bank account on your next payday. Many apps do let you reschedule at least one payment for free. These apps are a good alternative to payday loans but should not be relied on.

Keep in mind that short-term loans are typically more costly and harder to repay than installment loans, which are spread out over two to seven years. Whether you choose a short-term loan, an installment loan, or a secured loan, having a payment plan is crucial. Making timely payments will improve your credit score, while missed payments or loan defaults will not only damage your score but can also lead to a cycle of debt.

While a credit score of 589 can present challenges, various options are available to secure a personal loan. Secured loans, joint loans, online lenders, credit unions, and cash advance apps each offer different advantages and potential drawbacks. Carefully comparing these options and the specific lenders you find can help you identify the best solution for your financial needs. As always, try to prequalify so that you can compare offers before committing to any one loan.

Take your 589 credit score with a grain of salt

No solitary measure perfectly predicts if someone will repay borrowed money. Consequently, lending institutions have diverse criteria for minimal credit scores. Many leave some ambiguity regarding what scores they will accept and how much emphasis they place on scores. Some financiers prioritize factors such as a candidate's job stability or living conditions (if you rent or own).

Your score is not the be-all and end-all for lenders, nor is it fixed. It is a numerical summary based on your credit report data, and you can change what’s in your report. You are not permanently bound to a fair credit rating. With effort and strategic financial decisions, you can elevate your score. Making timely payments and reducing your debt are the biggest things you can do to improve your credit rating.

Raising your score from fair to good or even excellent can unlock access to better financial products, lower interest rates, and more favorable terms. Although fair credit might limit your options now, taking proactive steps can lead to significant improvements and increased financial opportunities in the future. Keep in mind that your credit score is a dynamic reflection of your financial behavior and can be enhanced with consistent, positive financial habits.

 

How can I grow my 589 credit score?

Boosting your credit score is one of the best things you can do to improve your financial situation. A higher credit score means borrowing becomes not only easier but also more affordable. A positive credit history translates to lower interest costs, access to more credit products, and an easier time renting an apartment or getting a job.

With your credit score at 589, the path to good credit might appear daunting, but achieving a good score is attainable. First, look at the key factors that determine your score:

  • Payment history: This is the most significant factor. Ensure you make all payments on time.
  • Credit utilization ratio: Aim to keep your credit usage below 30% of your available credit.
  • Age of credit accounts: Older accounts positively impact your score, so keep them open and active.
  • Variety in types of credit: Having a mix of credit types (e.g., credit cards, installment loans) shows you can manage different kinds of credit responsibly.
  • Inquiries for new credit: Limit the number of new credit applications, as frequent inquiries can lower your score.

Next, review your credit report to understand why your score is low. Identify any past credit mistakes, such as late payments or high balances, and take effective steps to address them. By focusing on these key areas and making consistent, responsible financial decisions, you can gradually improve your credit score, enhancing your financial opportunities and stability.

Monitor your credit

Begin the credit repair process by reviewing your credit reports from Equifax, Experian, and TransUnion. You’ll want to look at all three credit reports as the bureaus may have slightly different information. Secure a free copy of your report from each bureau annually via annualcreditreport.com. Then, check for any discrepancies. Disputing false or outdated items with the credit bureau is a quick and easy way to boost your score.

Next, look through your report to deduce the causes of your low score. Identify instances of late or missed payments, accounts that have been sent to collections, a high credit utilization ratio, or a recent flurry of credit card or loan applications. Such activities can significantly hurt your score.

As you review your report, be vigilant for signs of identity theft. Unauthorized accounts or unfamiliar activities could indicate that someone has stolen your identity and is harming your credit. If you suspect identity theft, report it immediately to the credit bureaus and take steps to secure your personal information.

By systematically addressing each negative item on your report, you can steadily improve your credit score. Consistency and patience are key; while improvements might not happen overnight, diligent effort will eventually lead to a better credit profile.

Do damage control

Now that you know what's adversely affecting your credit score, it's time to take steps toward amending those issues. Negative entries can linger on your credit report for a maximum of seven years, but their impact diminishes over time. Given that your score isn't in the poor range, it's likely that there aren't many recent derogatory marks to address.

Contact your creditors or the collections agencies involved to explore negotiation possibilities. They might agree to remove a negative entry following the full settlement of a past-due account or cease reporting missed payments once you've updated your account status. Creditors are often open to cooperation in exchange for payment. Successfully removing any negative marks will boost your score and can be worth the effort.

Additionally, consider setting up a payment plan if you're unable to pay off the entire debt at once. Demonstrating your commitment to repaying what you owe can make creditors more willing to work with you. In some cases, they may even agree to a "pay for delete" arrangement, where the negative entry is removed from your report upon payment.

Get credit and use it

Improving your credit score hinges on responsible credit use. Lenders gauge your dependability as a borrower by how well you manage credit obligations. The most straightforward method to show you can be trusted with credit is to consistently borrow and repay as per the terms agreed upon. Credit cards make this easy to do.

If you haven't yet, apply for a credit card. Either a secured or unsecured card will help you as long as the issuer reports your payment history. Use it for small, manageable purchases each month—expenses you could easily cover with cash. Pay off the entire balance by the end of each billing cycle. Consider setting up autopay or payment reminders to avoid late or missed payments. Establishing and maintaining a history of on-time payments is vital since payment history is the biggest part of calculating your score. Even one late payment can drastically drag down your credit rating.

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The second most significant aspect is your credit utilization rate. Keep your credit usage under 30% of your available credit to demonstrate that you aren’t overly dependent on borrowing. If you can bring it lower, that’s even better. To help manage this, you might opt to make multiple payments throughout the month.

Credit builder tools can also be beneficial. Many financial institutions offer credit builder loans, which are designed to help individuals establish or improve their scores. With these loans, the borrowed amount is held in a secured account while you make monthly payments. Once you’ve paid off the loan, the funds are released to you, and your successful payments are reported to the credit bureaus, boosting your score.

Rent reporting services can also play a role in improving your credit rating. These services report your on-time rent payments to the credit bureaus, which can help build a positive payment history, especially if you do not have many other credit accounts.

Personal loans can be another tool. Make your payments on time each month and your score will go up. The concern here is it's rarely a good idea to take on debt you don't need.

Consistently paying your bills on time and keeping your utilization low proves that you are responsible with credit and will gradually boost your score. As your score increases, you’ll qualify for more advantageous financial products, helping you achieve better financial stability and growth.

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Next steps for your 589 credit score

A credit score of 589 isn't optimal. It makes the process of securing loans or credit cards challenging, though still feasible. Any offers that come your way are likely to bear higher interest rates and extra charges as a safeguard for the lender. However, there's a silver lining: a fair credit rating isn't set in stone. Consistently paying your bills on time is crucial. Set up automatic payments or reminders to ensure you never miss a due date, as timely payments significantly boost your credit score.

Decreasing your overall debt is another vital step. Focus on paying down high-interest debts first and consider consolidating debts to manage payments more effectively. This reduces your credit utilization ratio, which is the amount of credit you're using relative to your credit limit. Aim to keep this ratio below 30%, as lower utilization signals to lenders that you’re not overly reliant on credit.

Maintaining minimal credit usage also plays a significant role. Avoid maxing out your credit cards and try to spread your expenses across multiple cards if necessary. Regularly check your credit report for inaccuracies and dispute any errors to ensure your credit profile is accurate.

By adhering to these strategies, your credit score will gradually improve. Over time, this will enable you to access better financial products with more favorable terms, such as lower interest rates and fewer fees, ultimately enhancing your financial health and opportunities.

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10. Paycheck Advance is For eligible customers only. Your actual available Paycheck Advance amount will be displayed to you in the mobile app and may change from time to time. Conditions and eligibility may vary and are subject to change at any time, at the sole discretion of Finco Advance LLC, which offers this optional feature. Finco Advance LLC is a financial technology company, not a bank.
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32. Based on a representative study conducted by Experian®, members who made their first purchase with Credit Builder between June 2020 and October 2020 observed an average FICO® Score 8 increase of 30 points after approximately 8 months. On-time payment history can have a positive impact on your credit score. Late payment may negatively impact your credit score.
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39. Round Ups automatically round up debit card purchases to the nearest dollar and transfer the round up from your Chime Checking Account to your savings account.
40. Mobile Check Deposit eligibility is determined by Chime in its sole discretion and may be granted based on various factors including, but not limited to, a member’s direct deposit enrollment status.
41. Funds are automatically debited from your Checking Account and typically deposited into the recipient’s Checking Account within seconds. Pay Anyone transactions will be monitored and may be held, delayed or blocked if the transfer could result in fraud or another form of financial harm. Sometimes instant transfers can be delayed.
42. Pay Anyone transactions will be monitored and may be held, delayed or blocked if the transfer could result in fraud or another form of financial harm. Sometimes instant transfers can be delayed. Non-Chime members must use a valid debit card to claim funds.
* EarnIn is not available for Connecticut residents
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About the author

Rachel Alulis

Rachel Alulis has been the lead editor for Moneyfor’s credit cards team since 2015 and for the financial rewards team since 2023. Before joining Moneyfor, Rachel worked at USA Today and the Des Moines Register. She then established a successful freelance writing and editing business specializing in personal finance. Rachel holds a bachelor’s degree in journalism and an MBA.

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