Is 571 a Good Credit Score & How to Improve It

A credit score is a numerical representation of an individual’s creditworthiness, typically ranging from 300 to 850. This three-digit figure helps lenders assess the likelihood of a borrower repaying borrowed money. Understanding your score offers insight into your financial standing and potential access to various financial products.

Credit Score Scales and Your 571 Score

Credit scores are primarily generated by two widely used models in the United States: FICO and VantageScore. While both use a 300 to 850 scale, their categorization into different credit quality tiers can vary.

For FICO Scores, which are used by many lenders, credit is categorized as:
Poor: 300-579
Fair: 580-669
Good: 670-739
Very Good: 740-799
Exceptional: 800-850

VantageScore 3.0 classifies scores as:
Very Poor: 300-499
Poor: 500-600
Fair: 601-660
Good: 661-780
Excellent: 781-850

A 571 credit score is in the “Poor” category for FICO Scores. For VantageScore models, a 571 score is also considered “Poor” or “Subprime.” This indicates a higher risk to lenders. The base 300-850 scale is most commonly referenced for overall credit health.

Impact of a 571 Credit Score

A 571 credit score carries implications across various financial aspects, often leading to less favorable terms or denials for credit products. Lenders perceive individuals with scores in this range as higher risk, affecting interest rates and loan approvals. This can make obtaining financing for major purchases more challenging and expensive.

For mortgages, a 571 score typically means difficulty in qualifying for conventional loans, requiring lenders to often deny applications due to the elevated risk of default. If approval is possible, it would likely come with significantly higher interest rates and less attractive loan terms, increasing the overall cost of homeownership. Similarly, securing an auto loan with a 571 score often results in higher interest rates, potentially limiting the amount that can be borrowed or requiring a larger down payment. Personal loans and credit cards also present challenges, as approvals are less likely, and any offered credit will come with high annual percentage rates and potentially low credit limits.

Beyond traditional lending, a low credit score can influence other areas of daily life. Landlords frequently check credit scores during rental applications, and a 571 score may lead to a higher security deposit requirement, a need for a co-signer, or even rejection of the application. Insurance companies also use credit-based insurance scores, which are derived from credit reports, to help determine premiums for auto and home insurance policies. A lower credit score can result in higher insurance rates, as it is statistically correlated with a higher likelihood of filing claims. Some employers, particularly for positions involving financial responsibilities, may conduct credit checks as part of their background screening process.

Elements Shaping Your Credit Score

Credit scores are not arbitrary numbers but are calculated based on several key factors derived from an individual’s credit report. Understanding these elements provides insight into why a score might be 571 and offers a roadmap for improvement. The weighting of these factors varies between scoring models like FICO and VantageScore, but the underlying principles remain consistent.

For FICO Scores, the factors are:
Payment history (35%): Whether bills are paid on time; late payments lower the score.
Credit utilization (30%): How much available credit is used; keeping balances below 30% of limits is beneficial.
Length of credit history (15%): Favors older, well-maintained accounts.
New credit (10%): Recent applications can temporarily lower a score due to hard inquiries.
Credit mix (10%): Variety of credit accounts (e.g., credit cards, installment loans).

VantageScore models emphasize similar components with different weightings:
Payment history (40-41%): Most influential.
Credit utilization (20%): Highly influential.
Depth of credit (21%): Age and type of accounts are highly influential.
Balances carried (11%): Moderately influential.
Recent credit activity (5%): Contributes to the score.
Available credit (3%): Also a factor.
A 571 score indicates past challenges with on-time payments, high credit utilization, or a limited credit history.

Steps to Enhance Your Credit Score

Improving a 571 credit score requires consistent effort and a strategic approach focused on the factors that influence credit calculations. One of the most impactful steps is to ensure all payments are made on time, every time. Payment history carries the heaviest weight in both FICO and VantageScore models, making timely payments a foundational element for score improvement. Setting up automatic payments can help avoid missed due dates, which can significantly damage a score.

Another important action involves reducing credit card balances to lower credit utilization. Experts generally recommend keeping the amount of credit used below 30% of the total available credit across all revolving accounts. Paying down balances aggressively demonstrates responsible credit management and can lead to a notable increase in the credit score. Regularly checking credit reports for errors is also advisable, as inaccuracies can negatively affect a score; disputed errors, once corrected, can help improve the score.

Limiting new credit applications is also beneficial, as each hard inquiry can temporarily lower a score. Only apply for credit when it is genuinely necessary and after careful consideration. For individuals with limited credit history or a very low score, a secured credit card can be a useful tool; it requires a cash deposit as collateral, and timely payments are reported to credit bureaus, helping to build a positive payment history. Credit-builder loans offer another avenue, where the loan amount is held in an account while regular payments are made, establishing a positive payment record before the funds are released to the borrower.