How a 600 Credit Score will Ruin Your Life and How to Change It

A 600 credit score will put you in the bad credit range. It is below average. According to Equifax, 698 is the average credit score. A bad credit score can impact your life in more ways than one. You will need to get better interest rates loans, making it more costly to pay off. A low credit score can get in the way of specific employment opportunities.

While the three credit bureaus report the score slightly differently, there are good reasons to improve your credit score if you fall in this range. Luckily, the steps to improve your credit are straightforward. First, it is essential to understand how the major credit bureaus calculate your fico score.

What is a Credit Score, and Why is it so Important?

In the simplest terms possible, a credit score is essentially just a 3-digit number ranging from 300 to 900 that credit bureaus calculate to show how ‘credit worthy’ you are.  The three major credit bureaus calculate your score based on your historical credit habits. 

The higher the score, the better. This score becomes increasingly more critical as you get older and start thinking about making large purchases such as homes, cars, renovations, etc. In addition, to acquire a large mortgage, the bank or lender must have a valid reason to trust that you plan on paying the money back, especially if it’s a significant amount. 

The logic behind this is that, in general, people who handled their credit poorly in the past will continue to handle it poorly in the future. In contrast, someone diligent with paying down their debt will continue to be diligent in the future. Banks and lenders would much prefer to lend money to people with an excellent financial track record, which is why they want proof of your credit score. 

A low credit score will mean you do not qualify for the best loans. In addition, it will put you in a category of subprime credit. These subprime loans will result in higher interest rates so that the lender can compensate for the higher risk associated with lending to people with lower credit scores.

How is my Credit Score Calculated?

A credit bureau will calculate your score using these five criteria:

  • First, 35% of your credit score (the most significant chunk) is your payment history. Your payment history considers how good you have been with paying off any debt or credit on time. 
  • 30% of your credit score comprises the credit utilization ratio and the amount you owe. This criterion considers how much current debt you have and whether or not you would be able to pay it off that instant if you had to. This criterion also takes into consideration your credit limits and whether or not you are maximizing them. 
  • 15% of your credit score is the length of your credit history. The longer you have maintained credit, the more data there is to track, leading to an increased credit score. 
  • 10% of your credit score is based on inquiries or (new credit). Receiving credit inquiries lowers your score because it shows you are seeking new credit. One or two inquiries will not have much impact, but having several does.

5%, the final piece of your credit score, reflects public records. This chunk of your score considers any previous bankruptcies or other issues. Any of these issues on your public record will decrease your score.

Don’t have a great credit score but need cash quickly?

If you don’t necessarily have the best credit score in the world and you want a quick loan without going through the process of improving it (which you can do – and we will further discuss in this article), you can check out

Most borrowers can get approved in less than a day and see money in their bank account within a week. After that, you can take out a loan for nearly any reason. Still, the most popular loan type is for debt consolidation, paying off high-interest credit card loans.

Click to check your rate on a personal loan up to $35,000 – It won’t affect your credit score.

A 600 credit score isn’t going to lock you out of the money you need, but it will affect your life in ways you don’t realize

If you’re checking your credit score, it’s probably because you’re considering applying for a loan or wondering why your credit card rates are so high.

But that FICO score affects more than the rates you get or whether you get approved for a loan.

You might lose out on more than loans if you have a 600 credit score or below. Your credit score could affect your insurance premiums, your job, and even where you live. It’s unfair because it’s too easy to ruin your credit score. A missed payment or even avoiding debt altogether could mean bad credit at no fault of your own.

Fortunately, it can be just as easy to fix your credit, and I’ve got one tool to help you get the money you need and increase your score simultaneously. First, we’ll look at how a 600 FICO affects your life and what you can do about it.

How Many Americans Have a 600 Credit Score?

The credit scoring agencies don’t release the actual number of people with a specific credit score, but they offer ranges occasionally. Credit scores have increased since the 2008 recession, but many Americans are still unfairly locked out of the financial system.

One in four Americans (23%) has a credit score below 600 FICO, while about 10% of the population scores within the 600 to 649 range.

how many people have 600 FICO
How Many People Have a 600 Credit Score?

We usually consider credit scores when we need money or look at our credit card statements. Your credit score affects the interest rate you get on loans and whether a lender approves you for a new loan, but it also means a lot more.

One of the most unfair ways a credit score can affect your life is through your car insurance. Insurance companies are allowed to charge bad credit drivers more for insurance, something called credit-based insurance. As a result, drivers with poor credit may pay as much as 20% more in premiums for insurance than good credit borrowers.

You may not be able to get a home mortgage with a 600 credit score, and you might even have a hard time renting. Landlords can pull your credit report and FICO score before accepting your application. They may deny bad credit borrowers as too risky.

Potential employers also look at your credit as if all that wasn’t bad enough. That sub-prime credit score may keep you from getting a job in finance or management.

Your credit score affects so many parts of your life, is a 600 FICO considered bad credit, or is it bad enough to affect your opportunities?

Is a 600 FICO Bad Credit?

When we talk about credit scores, it’s usually in terms of ranges or whether something is ‘good’ or ‘bad’ credit. The truth is, there’s one number that matters, around 660 or 680.

Right around that number is the cutoff for what’s called ‘prime’ credit. This cutoff is where banks can approve loans, and you start seeing lower rates. Anything below a prime credit score is considered bad credit, and your options will be limited.

is 600 credit score bad credit
What is a Good Credit Score?

So the short answer is that a 600 FICO is not good credit, but there’s a lot more than the short answer. Lenders use many factors before approving a borrower for a loan. Your credit score is only one of them.

But a 600 credit score is bad credit. It’s easy to get a score below prime. One missed payment or loan default will get you there. Maxing out your credit cards will hurt your score.

You might also have a low credit score just because you don’t have much credit history. Many students have sub-prime credit because they have never used a loan or credit card. Many people who have just avoided credit cards or debt may have a 600 credit score or lower.

It’s good that you want to avoid debt and credit cards, but not building up your credit score can cause massive problems down the road. It will probably not keep you from getting a job, but it will certainly keep you from getting an emergency loan or a mortgage. You will likely also have to pay higher premiums on your insurance.

While a 600 credit score is considered low, it’s far from the worst score I’ve seen, and your options are suitable for increasing your score and getting the money you need.

How to Get a Loan with a 600 Credit Score?

So what can you do with a 600 credit score? Of course, that depends on what you want to do.

what can i do with 600 credit score
Is 600 a Good Credit Score?

If you’re looking for a mortgage or a loan over $40,000, your options will be limited. You’ll need a 650 credit score or higher to get in the door at a traditional bank for a loan.

Banks can’t loan to borrowers with deficient scores because the loans don’t qualify to be resold to investors, something the bank does to get the cash needed to make more loans.

There is a solution, though, one that will get you the money you need and help increase your credit score.

It’s called a debt consolidation loan. You might have heard about consolidation loans to pay off your high-interest loans. Still, a couple of other benefits will also help you.

  • Take out one loan to pay off all your credit card and high-rate debt. Since personal loans can be used for anything, you can also get a little extra cash to ensure you don’t need any more loans.
  • The lower rate consolidation loan lowers your payments and saves money on interest. You can use that extra money to pay off the loan faster, helping you to reduce your total debt owed and boost your credit score.
  • One loan payment makes it easier to remember those monthly payments, and you’re less likely to forget a payment that can destroy your score and cost you late fees.
  • Since personal loans are non-revolving debt, they have a fixed payment and payoff date. They don’t hurt your credit score as severely as revolving (credit card) debt. However, the type of debt you have affects up to 15% of your score, which can immediately increase your FICO.

I’ve used for a consolidation loan and a home improvement loan. They specialize in bad credit loans and offer interest rates you can afford. I like online lenders for two reasons. First, they provide different types of loans, from peer-to-peer to personal and bank lending, depending on your credit. The website also sells your loan to other lenders to ensure you get the best rate possible.

Consolidation loans are available for between six and 72 months. I recommend a 36- or 60-month payoff. You want to spread your loan out enough that your payments are manageable, but you want to pay it off as soon as possible.

Borrowers with no credit history should try Upstart as well. It’s a newer online lender with a unique lending model designed to look at more than just your credit history. It’s specifically designed for students and graduates because it looks at your school record in the decision.

Applying for a personal loan is free and doesn’t affect your credit score. Lenders do a soft pull of your credit first to estimate a rate. The application will only go on your credit report after you accept the loan. I recommend applying on several sites to ensure you get the best rate possible.

Check your rate on a consolidation loan now – instant approval

A consolidation loan is just one of the tools I used to boost my credit score by over 100 points after destroying my credit in 2008. My FICO was way below 600 at its lowest but is now over 730, and I have no trouble getting loans.

How to Get a 600 Credit Score Car Loan

Car loans are going to be dangerous with a 600 credit score. It’s not that car loans are bad, but the fact that you’ll be denied a loan from new car dealers or legit used car lots because of bad credit leaves you exposed to the scams from buy-here, pay-here salespeople.

These used car fraudsters prey on bad credit borrowers with nowhere else to turn for a loan. There are two different ways these people rob you blind.

  • Charging thousands more on a car than what it’s worth. This gouging makes interest rates on car loans pointless because the vehicle is so overpriced anyway that the dealer doesn’t have to worry about the loan.
  • They are charging interest rates of 18% and higher. Some dealers will lure you in with lower car prices but then charge an arm and a leg on the interest.

Your best option is to get your own personal loan and take that to find the lowest price car. This way, you can still get the vehicle you want and a price you can afford but don’t have to fall victim to the buy-here, pay-here scams.

Can I Get a Mortgage with a 600 Credit Score?

Most likely, you won’t be able to get a conventional mortgage with a 600 credit score. Smaller banks and credit unions have been known to make exceptions on credit requirements.  Especially for people with credit scores as low as 660 FICO.

If you have a long credit history with the bank, you will be in a better position with them. Still, they’ll never go as low as 600. When a bank accepts a lower credit score on a loan, typically, they offset this by requiring a higher down payment and debt-to-income ratio.

With a 10% down payment, FHA loans have a minimum credit score requirement of 580. There are more hoops to jump through when getting an FHA loan, but in some cases, it can be your best option for a home loan. One of the drawbacks is that they traditionally have higher closing costs due to all the paperwork required.

You can try using a personal loan for your down payment on a house and ask the seller to provide financing for two years while you increase your credit score. Within two years, you can work on improving your score up past that prime credit cutoff, and you’ll get better rates on a mortgage.

Can I get a Credit Card With a 600 Credit Score?

Getting a credit card with a 600 credit score is a dangerous situation, though. You’ll get offers in the mail for new cards, but the rate can be 28% or higher. That’s a lot of money paid to interest, and it will be easy to get behind again.

Like most credit or loans, it will work out much better if you can wait a few months while you increase your score. It’s here in the 600s that you start noticing better offers and rates on credit. After that, you’ll begin getting traditional loans and even advertised speeds as you approach that prime credit cutoff.

How to Increase a 600 Credit Score

The upside to having a 600 FICO is that you’ll notice fast changes in your score in surprisingly little time. For example, I increased my credit score from a low of 560 FICO to 700 in less than a year. I now have an 819 FICO. A few credit score tricks work fast to boost your score and will put you on that path to improving your credit. I recently shared the best hacks I used to increase my score on my YouTube channel.

Having a 600 credit score doesn’t mean you did anything wrong or destroyed your credit. It’s easy to miss a payment, and it doesn’t take much to drive your FICO lower. While a 600 FICO is not a good credit score, other factors can help you get a loan or the money you need. It does mean you’ll need to work on increasing your credit score, or it could affect your life more than you realize. Protect your credit, and a whole new world will open to you.

Safe Vs. Unsafe Credit Repair Practices

Not all methods used to increase your credit score are helpful. However, if you are unsatisfied with a poor credit score, there are some no-nonsense options to rebuild your credit.

Some debt relief companies work by consolidating your loans into one loan with a lower APR than your other loans. This consolidated loan may be great for getting back on top of making payments and can help in certain situations. However, the impact on your credit score can be very detrimental. By refinancing, you are concurrently opening up a new line of credit and closing out your old lines of credit.  

  • On-Time Payments: Late payments will harm your credit score. The credit bureaus give more weight to current events and less to past ones. So getting your accounts current should be one of your very first steps.
  • Resolve Errors: If there are errors on your credit report that cannot be substantiated, it is vital to do something about this. As part of the Fair Credit Reporting Act, debtors reporting to the credit bureaus must be able to substantiate their claims. If you find an error in your credit report, you should send a credit report dispute letter rather than wait seven years for them to be removed from your report. 
  • Resolve Outstanding Debts: If you have derogatory remarks on your credit report, you can work with the debtor to get this paid off and removed from your credit report. While the creditor is not required to remove a legitimate debt remark about a late or delinquent account, they often will if it means they can collect on the payment. 
  • Be Weary of Closing Old Accounts: Up to 15% of your credit report is based on the age of your credit. Having accounts that are in good standing for multiple years shows the stability of your credit profile.

    A knee-jerk reaction is closing out all your old accounts and simplifying your credit profile, especially if you have had less than an ideal history. Additionally, if you close an account, you could lower your total credit limit. This reduction will increase your credit utilization rate. 
  • Pay Down Debts: Repayment of your revolving lines of credit, your credit cards, is one of the fastest ways to improve your credit score. In addition, by doing so, you will lower your credit utilization ratio.

If you are completely stuck, consider a secured credit card. These can help you build a better credit score by creating a line of credit with a credit limit and a good payment history. Assuming you pay it off every month! A secured credit card works by placing a security deposit with the credit card issuer. If you become delinquent, the credit card company can claim the security deposit, so they are not taking a risk on you.

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