A good credit score is essential as a borrower if you’re looking to get approved for anything from a rewards credit card to a mortgage.
But what score do lenders/issuers consider to be in the good credit score range?
If you have a 560 credit score, your approval odds for loans are low, and your credit rating with the three credit bureaus, Equifax, Experian, and TransUnion, is pretty poor.
Fortunately, you can fix a FICO score in this range, getting access to more funding with better rates.
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Is 560 a Good Credit Score?
Let’s start at the beginning. If you’re not sure what your credit score is, know you are entitled to an annual free credit score in the United States.
This resource is especially helpful if you do not currently pay for a credit monitoring service.
560 credit score is considered to be “very poor,” falling below the average consumer’s FICO score.
For reference, a score of 670 is considered to be “good,” which means you’re just over 100 points shy of having a good score.
There are a lot of factors affecting your credit score, with some carrying more weight than others.
Some of the most common contributors to a “very poor” score include:
The issues above can hinder your access to both revolving lines of credit and installment loans.
With a 560 credit score, you’ll have very limited loan options and will have a hard time getting approved for unsecured credit cards.
If your score is 560 or below, you should work towards repairing your credit. We’ll provide you with some pointers below.
How to Improve a 560 Credit Score
While some aspects of repairing your credit take time, others will have quick results.
- Focus on your payment history: Your monthly payment history constitutes 35% of your credit score, so making payments on time is key to gaining a higher credit score. Automating payments is ideal. The longer you leave your debts unpaid, the more damage they do to your score. Avoid letting loans become delinquent or defaulting at all costs.
- Pay down debts: Credit utilization is the next biggest influence on your credit, making up 30% of your overall score. Paying off debts can yield quick and impressive results, demonstrating that your borrowing and payments are under control. If you have any collections accounts on your report, negotiate a pay-for-delete agreement.
- Limit credit applications: With a 560 credit score, your chances of getting approved for many loan types and credit cards are slim, and applying for new lines of credit drops your score. Do your research, limit your new types of credit applications, and only apply if you feel confident that you’ll be approved.
- Use a secured credit card: Secured credit cards are made for people with subpar credit scores or short credit histories, so you may be able to get approved with a 560 credit score. When used responsibly, these cards can help you to build your score quickly. To maximize results, try to only utilize 10% of the available amount of credit each month.
- Become an authorized user: Ask a loved one with a solid credit score to add you as an authorized user on one of their credit cards so your score can benefit from their timely payments. This is especially beneficial when you have new credit and you need to show a good length of credit history.
- Use a credit repair company: If repairing your credit seems like an overwhelming task, you may want to pay for a credit repair service. They can contact debt collectors, dispute claims, and more, boosting your score quickly.
Can You Get a Loan with a 560 Credit Score?
The lower your credit score is, the harder it is to get approved for loans.
Some types of loans are more accessible than others in this credit range, but in general, loans for applicants with poor credit come with extremely high-interest rates.
Take a look at your options below for loans with a 560 credit score.
Mortgage Options with a 560 Credit Score
Getting a home loan or refinance with a 560 score is easier said than done, but you do have a few options.
Here are the minimum credit score requirements for each type of mortgage to give you an idea of whether you can qualify or not.
|Mortgage Type||Minimum Credit Score|
|VA loan||No minimum from VA; lenders may require a 580 or 620|
|FHA loan||500 with 10% down, 580 with 3.5% down|
|USDA loan||No minimum from USDA; lenders will likely require a 640|
|Traditional Home Loan||620 - 640|
If you’re an active duty member of the military or a veteran, a VA loan is your best bet. Otherwise, your only option is likely an FHA loan.
These loans are ideal for low to moderate earners, allowing for both a low down payment and a low credit score.
Auto Loan Options with a 560 Credit Score
Cars are riskier to finance for lenders. To compensate for that risk, lenders charge high-interest rates.
If your credit score is lower than 700, you’ll have a harder time qualifying for a car loan.
Though you may be able to qualify with a score of 560, it will come with extremely high-interest rates.
You can also expect more scrutiny as lenders assess your application, particularly when it comes to your payment history.
While the average credit score for both new and used cars is at least 100 points higher than a 560, you should be able to get approved for a loan, depending on the vehicle and your income.
You should also note that you’re more likely to get approved for a used car loan than a new car loan with a 560.
Personal Loan Options with a 560 Credit Score
You could qualify for a personal loan with a 560 credit score, though you can expect higher rates here, too.
In some cases, working with a local credit union can help you to get approved with slightly better rates than a bank as federal credit unions have a lower maximum APR.
If applying with a credit union fails, you have access to several online lenders who actually specialize in offering personal loans to people with bad credit.
In addition to a personal loan, with a 560 you may be able to secure an emergency loan, debt consolidation loan, or an installment loan.
What Is the Best Credit Card for a 560 Credit Score?
Most people with fair or good credit opt for unsecured credit cards. With this type of card, your credit limit is a set amount based on your credit report and income.
The better your score is, the higher the spending limit you can expect. Because your credit score largely determines your credibility, these cards can be difficult to get approved for with poor credit.
However, there are some unsecured cards with low credit limits that are designed for individuals with low credit scores vs better credit scores.
An alternative you may want to consider with a 560 credit score is a secured credit card. With these cards, you put down a security deposit that acts as your credit limit.
Secured cards are ideal for building your credit score and can help with your credit mix, payment history, and credit utilization.
Whichever type of card you apply for, be aware of the APR and fees as some are higher than others.
Once again, we advise that you limit your applications as most will require a hard credit check that can lower your score more. You should be able to easily research your approval odds for most cards before applying.
Boost Your 560 Credit Score Today
While a 560 does fall into the poor range of credit scores, your score could be worse.
If you’re feeling defeated after applying and being denied for loans or credit cards due to your score, there’s no time like the present to start working to repair your credit score.
You may be surprised at how quickly you can take your score from poor to fair, giving you access to better lending options and putting you on the path to having a good score.
Take a look at the factors influencing your credit score, come up with a plan to improve it, and stick with it.
And don’t forget that you have access to tons of great online resources and credit repair professionals if you need assistance along the way.