Is 600 a good credit score?

Having an understanding of your credit score and how it works will help you maintain strong financial health. Credit scores, which help lenders assess your risk as a credit user, are used to determine your eligibility for loans and credit cards and can influence the interest rate you receive.

In this article, we’ll explore what it means to have a credit score of 600. We’ll explore whether a score of 600 falls within the range of a good credit score and how you can improve your credit, to better set yourself up for success for your next financial goal.

What is a good credit score?

To get a clear idea of what a 600 credit score means, it helps to know the different credit score ranges and how they’re calculated.

You can have multiple credit scores and each one is based on the different scoring models. The most popular scoring models are FICO score and VantageScore, both of which range from 300 to 850. Though they have their differences, FICO scores and VantageScores are similar in relying upon the same key factors — payment history, credit utilization, length of credit history, types of credit accounts and recent activity — to determine your score. Plus, for both models, the higher the score the better.

FICO considers a score of 670 to 739 as good, whereas for the VantageScore 3.0 it’s 661 to 780.

Where does a credit score of 600 fall?

According to myFICO, 90 percent of lenders base their decisions on FICO credit scores, so we’ll discuss the 600 score as a FICO score. A FICO score of 580 to 669 is considered a fair credit score, so a 600 would fall in that range.

With a score of 600, you will likely struggle to find lenders willing to provide you with loans or assign you a lower interest rate. The terms of any loan you do qualify for will likely be more unfavorable than they would be for those with higher credit scores.

Unless you’re still building your credit after having no credit, a credit score of 600 indicates a series of late payments or debts in collections. This score is classified as subprime, which means lenders would consider you at high risk of defaulting on your payments. They are more likely to charge a higher interest rate and may also ask for a down payment to offset the risk on their end.

If you’ve been dealing with a low score for a while and were hoping to take out a loan to pay off your debts, you may consider alternatives, such as credit counseling.

Can you get a credit card with a 600 credit score?

Nevertheless, it’s not impossible to get a credit card with a 600 FICO score. Your options may be more limited, but there are still plenty of credit cards designed for those with fair credit.

With fair credit, it’s still possible to find cards that offer rewards, have no annual fee, require a low security deposit, provide a 0 percent intro APR offer or grant early access to special events.

Here are some of our top picks for credit cards for fair credit:

Discover it Secured Credit Card

As a secured credit card, the Discover it® Secured Credit Card is great for those who need to improve their credit since your credit limit depends on the amount you put down as your security deposit. Plus, it offers cardholders 2 percent cash back on the first $1,000 spent per quarter at restaurants and gas stations and 1 percent on all other purchases.

Capital One QuicksilverOne Cash Rewards Credit Card

An unsecured credit card, the Capital One QuicksilverOne Cash Rewards Credit Card is great for beginners to rewards cards with its unlimited 1.5% cash back on every purchase, as well as 5 percent cash back on hotels and rental cars booked through Capital One Travel. It has a relatively manageable $39 annual fee and no foreign transaction fees.

Mission Lane Cash Back Visa Credit Card

This card is great for people who are serious about rebuilding their credit, since it rewards you for making on-time payments by increasing your credit line. The Mission Lane Cash Back Visa Credit Card also earns 1 percent to 1.5 percent cash back on qualifying purchases, though you won’t know your exact rate until you apply and are approved.

Petal 2 “Cash Back, No Fees” Visa Credit Card

With a notable lack of fees — no annual fee, foreign transaction fee, late payment fee or returned payment fee — the Petal® 2 “Cash Back, No Fees” Visa® Credit Card is good for those still learning about credit and forming good payment habits. Plus, it earns 1 percent cash back on all purchases, then up to 1.5 percent on all eligible purchases after you’ve made your first 12 monthly payments on time.

How to improve your credit score

If you have a credit score of 600, you probably want to improve it.  The good news is that there are plenty of ways to do that.

Making on-time payments a priority, even if it’s just the minimum payment, is a good place to start. Payment history makes up 35 percent of your FICO score, and your score can change a great deal depending on if you’re late on a payment or two. So, the more you pay your bills on time, the more you communicate to lenders that you’re a responsible credit user.

Another important tip: Try to pay down any high balances or your entire credit card debt. Since your credit utilization ratio (the amount of credit you use compared to your total available credit limit) makes up 30 percent of your credit score, keeping it down can greatly benefit in boosting your score.

In a similar vein, try to avoid carrying a balance on your credit card. If you find yourself continually being only able to afford your minimum payment and carrying a balance, perhaps you’re living beyond your means. This way your interest will quickly accumulate, and you’ll find yourself in debt before you know it.

As you work to improve your score, make sure you check your credit reports regularly for any possible errors, like derogatory marks for financial missteps you never made. If you find any mistakes, it is important to dispute them with all three credit bureaus — Equifax, Experian and TransUnion — as soon as possible. Fixing inaccuracies on your credit report can help you improve your credit score.

Why is a good credit score important?

Having a low credit score can negatively impact some areas of your financial life, but it does not have to hold you back forever. Doing everything you can to improve your credit score will open up more opportunities for you.

Such opportunities include qualifying for better interest rates. When applying for loans and credit cards you can access more competitive interest rates so that your payments go toward paying off your principle than just interest charges.

Your credit score can also impact your insurance premiums in some states. Those with lower scores tend to file insurance claims more frequently, so it may pay to increase your credit score to lower your insurance premiums.

A less-than-ideal credit score can also make it more difficult to rent an apartment, get approved for utilities and other services or even get a job. For example, your potential landlord wants to know the likelihood of you paying rent — a lower score may indicate that you have other expenses outside of rent to pay off.

Bottom line

Living with a credit score of 600 can have its challenges, but with some small actions you can gradually improve your credit score. Taking the time to improve your score can open up a lot of doors for you, from access to rental applications to better interest rates when you apply for loans or credit.

Improving your credit involves a few key steps, such as checking your credit scores often, understanding what goes into credit scores, making payments on time and keeping credit card balances low. Though it may seem daunting, don’t be afraid to start practicing good financial habits now to prime yourself to achieve your financial goals.