Is 590 a Good Credit Score & How to Improve It

A credit score is a numerical representation of an individual’s creditworthiness, indicating the likelihood of repaying borrowed money. It significantly influences access to loans, credit cards, and housing. This article explores the meaning of a 590 credit score and strategies for its improvement.

Understanding Credit Score Ranges

Credit scores are three-digit numbers, typically ranging from 300 to 850, that lenders use to assess risk. Two prominent credit scoring models are FICO and VantageScore, both of which have similar ranges but categorize scores differently. A 590 credit score generally falls into the “Fair” category for FICO (580-669) and the “Poor” category for VantageScore (500-600). This score indicates a higher perceived risk to lenders compared to individuals with higher scores.

Several factors contribute to a credit score, including payment history, the amounts owed (credit utilization), the length of credit history, the types of credit used (credit mix), and new credit inquiries. Payment history and credit utilization are often the most influential factors.

Real-World Implications of a 590 Score

Possessing a 590 credit score can present various challenges when seeking financial products and services. Lenders view a 590 score as indicative of increased risk, which often translates to less favorable terms or outright denials for credit. For instance, obtaining conventional mortgages typically requires a minimum credit score of 620, though Federal Housing Administration (FHA) loans may be available with scores as low as 580, albeit with a higher down payment requirement. Borrowers with a 590 score who do qualify for loans, such as auto loans, are likely to face significantly higher interest rates compared to those with better credit.

Access to credit cards can also be limited with a 590 score, often restricting options to secured credit cards, which require a cash deposit as collateral. These cards can have higher annual fees or interest rates. Beyond traditional lending, a lower credit score can impact housing opportunities; landlords may check credit reports, potentially requiring higher security deposits or a co-signer for apartment rentals.

In many states, credit scores can influence insurance premiums for auto and home policies. Individuals with lower credit scores may pay substantially more for coverage. While less common, some employers may review an applicant’s credit report. A 590 score generally signals a higher perceived risk across various financial interactions, leading to less advantageous terms.

Strategies for Credit Score Improvement

Improving a 590 credit score requires consistent and deliberate financial habits focused on the key factors influencing creditworthiness. The most impactful action is making all payments on time, as payment history is a primary determinant of credit scores. Setting up payment reminders or automatic payments can help ensure timely fulfillment of financial obligations.

Managing credit utilization, the amount of credit used compared to the total available credit, is another step. It is advised to keep credit card balances below 30% of the available credit limit, as higher utilization can negatively affect scores. Paying down existing balances and avoiding maxing out credit cards can significantly improve this ratio.

A diverse credit portfolio, encompassing both installment loans (like car loans) and revolving credit (like credit cards), can positively impact a score over time. It is advisable to avoid opening too many new credit accounts in a short period, as each new application often results in a hard inquiry that can slightly lower the score for up to a year.

Regularly checking credit reports for errors is important. Consumers are entitled to a free copy of their credit report from each of the three major nationwide credit bureaus (Equifax, Experian, and TransUnion) annually through AnnualCreditReport.com. Disputing any inaccuracies found on these reports can help correct information that might be unfairly depressing a score. Secured credit cards or credit-builder loans can serve as tools to establish a positive payment history and rebuild credit.