Let's be honest — not all of us have the best credit scores. That's okay! Your credit score is not a reflection of your value as a person, but rather a tool to help lenders measure your financial risk.
A poor credit score can impact your ability to make major financial decisions in your life. That's why understanding what it means can help you make proactive choices and think about ways you can improve it.
In this article, you will learn about:
- The lowest credit score ranges for the two main scoring models
- The disadvantages of having a poor credit score
- The lowest credit score you can have to get a mortgage
- The lowest credit score you can have to get a car
- Improving your credit score with Chase Credit Journey®
Lowest credit score ranges
When it comes to credit score ranges, it's important to keep in mind there are many different scoring models, but the two most prevalent are VantageScore® and FICO® scores. Poor credit scores are further categorized into ranges below.
Poor VantageScore credit score ranges are:
- Poor: 500 to 600
- Very Poor: 300 to 499
Poor FICO credit score ranges are:
- Fair: 580 to 669
- Poor: 579 and below
The lowest score you can get with either model is 300, though past scoring models have gone lower (and aren't used so much today). According to FICO, an estimated 11.1% of Americans have a FICO score ranging between 300 and 549 as of 2019.
Disadvantages of having a poor credit score
Having a poor credit score can inhibit you from making major life choices or create more obstacles to getting what you want—whether that's a home, car, credit card or a major purchase. The following are a few disadvantages to having a poor credit score:
- The inability to get a credit card, a line of credit, a personal loan, etc.
- May affect your ability to rent an apartment
- High APRs for loans you are eligible for
- Hurt your chances of getting employed (if your potential employer runs a credit check)
Lowest credit score to get a mortgage
Having a poor credit score doesn't necessarily mean you can't take out a mortgage. However, it depends on the lender or financial situation. It's always important to check with your prospective lender, but generally, according to Experian™, most mortgages require about a 620 score. The lender may require a larger down payment to compensate for a low credit score.
According to Experian, other options for lower credit scores include the following loans:
- Federal Housing Administration (FHA) loan: a 500 credit score with 10% down payment or a 580 credit score with a 3.5% down payment
- Veterans Affairs (VA) loan: a 620+ credit score
- United States Department of Agriculture loan (USDA): a 580+ credit score
Lowest credit score to get a car
Similar to mortgages, your eligibility for a car loan and the rates you receive are heavily dependent on your lender and credit score. Some dealerships use a FICO auto score, which ranges between 250–900. Keep in mind this is different from other FICO scoring models, where the lowest score you can get is 300. Generally, the lower your credit score, the higher the annual percentage rate (APR).
To get a reasonable interest rate, you need around a credit score of 660 or higher. If you have a poor credit score (in the 300–500 range) you may be able to have a co-borrower help with getting you approved for a car loan. Having a co-borrower may show that there's an additional level of responsibility and usually reduces the risk for the lender.
Improve your credit score with Credit Journey®
As you can see, a low credit score has the ability to make it difficult for you when it comes to major life decisions. Whether you're taking out a mortgage, buying your first car or looking to take out a loan for a major purchase, a low credit score can hurt your chances of getting what you want.
That's why it's essential to be proactive about increasing your credit score with tools like Chase Credit Journey. This free online resource gives you the ability to regularly check your credit score (without hurting it) and personalized action plans provided by Experian™ to help improve your score.
