587 Credit Score: Is it Good or Bad?

A credit score is a three-digit number, typically ranging from 300 to 850, that summarizes an individual’s creditworthiness and reliability in managing financial obligations. It influences various aspects of personal finance, from securing loans to renting a home. This article will explore the meaning of a 587 credit score within common credit scoring models and its practical implications.

Credit Score Scales and What 587 Means

Credit scores are calculated using different models, with FICO and VantageScore being the most widely recognized. Both models generally use a scoring range from 300 to 850, though their specific categorization tiers can vary slightly. A 587 credit score typically falls into the “Fair” or “Poor” category, depending on the model used. For instance, FICO considers scores between 580 and 669 as “Fair,” while scores below 580 are “Poor.” In the VantageScore 3.0 model, scores between 500 and 600 are often considered “Poor,” and “Fair” ranges from 601 to 660.

A score of 587 indicates that a consumer is generally considered a higher-risk borrower by lenders. While it is below the average credit score in the United States, it does not necessarily prevent access to credit. This score suggests a history that may include some past credit difficulties or a limited credit history.

Practical Realities of a 587 Credit Score

A 587 credit score carries specific real-world implications across various financial transactions, often leading to less favorable terms. Lenders typically view individuals with such a score as subprime borrowers due to the increased risk of default. This perception affects the likelihood of loan approvals and the associated interest rates.

For mortgage applications, a 587 FICO score can qualify for certain types of loans, such as an FHA loan, which may require a down payment as low as 3.5% for scores of 580 or higher. However, conventional loans generally require a minimum credit score of 620 or higher. Even when approved for a mortgage with a lower score, the loan will typically come with higher interest rates and mandatory mortgage insurance premiums.

Securing an auto loan with a 587 score is possible, but it usually results in significantly higher interest rates compared to borrowers with higher scores. For example, in the first quarter of 2025, average interest rates for subprime borrowers were significantly higher than for prime borrowers. Personal loans typically require a minimum credit score of at least 580, but lenders will offer higher interest rates and potentially smaller loan amounts for such a score.

When it comes to renting, a 587 credit score falls within the “Fair” range, which landlords may scrutinize more closely. While there is no universal minimum credit score for renting, a lower score might lead landlords to request a higher security deposit or other assurances. In competitive rental markets, a higher credit score can provide an advantage.

Insurance premiums, particularly for auto and home insurance, can also be impacted by a credit score. In most states, insurers use credit-based insurance scores, and a lower credit score can lead to substantially higher premiums. Utility providers may require deposits for services like electricity or internet if an individual has a lower credit score, as this can signal a higher risk of late payments.

Factors That Shape Your Credit Score

A credit score is determined by several key components, each weighted differently in the calculation. Payment history holds the largest influence, typically accounting for 35% of a FICO score. This category assesses whether payments on credit accounts have been made on time and consistently. Late payments, collections, or bankruptcies can significantly lower a score.

The amount of debt owed, or credit utilization, is another substantial factor, making up about 30% of a FICO score. This measures the amount of credit used relative to the total available credit. Maintaining a low credit utilization ratio, ideally below 30% of available credit, is generally considered favorable.

The length of credit history contributes approximately 15% to a FICO score. This factor considers how long credit accounts have been open, including the age of the oldest and newest accounts, and the average age of all accounts. A longer history of responsible credit management can positively impact a score.

The mix of credit accounts, such as installment loans and revolving credit, accounts for about 10% of the score. Demonstrating the ability to manage different types of credit responsibly can be beneficial. Finally, new credit, including recent applications for credit, makes up the remaining 10% of a FICO score. Applying for too much new credit in a short period can temporarily lower a score.

Obtaining Your Credit Score and Report

Accessing your credit score and credit report is an important step in understanding your financial standing. Federal law provides the right to obtain a free copy of your credit report from each of the three major nationwide credit bureaus: Equifax, Experian, and TransUnion. The official website for this is AnnualCreditReport.com, where you can access reports weekly.

A credit report provides a detailed history of your credit accounts, including payment history, amounts owed, and the length of your credit relationships. While the report offers a comprehensive view, your credit score is a numerical representation derived from that information. Many services also offer free access to your credit score, often updated monthly, which can help in monitoring your credit health.