Is 590 Bad Credit? And What You Can Do About It

Credit scores play a significant role in an individual’s financial life, acting as a numerical summary of their creditworthiness. These three-digit numbers provide lenders with an indication of how responsibly a person manages borrowed money. Understanding one’s credit score is important because it can influence access to various financial products and services. A specific score, such as 590, can carry notable implications for a consumer’s financial opportunities.

Understanding What a 590 Credit Score Means

A 590 credit score falls within ranges categorized as “poor” or “very poor” by major credit scoring models. FICO Scores, ranging from 300 to 850, classify scores between 300 and 579 as “poor” and 580 to 669 as “fair.” A 590 FICO score is at the lower end of the “fair” category.

VantageScore models, also ranging from 300 to 850, generally consider scores between 500 and 600 as “poor” and 300 to 499 as “very poor.” A 590 VantageScore is within the “poor” range. These classifications signify a higher perceived risk for lenders, indicating a historical pattern that may suggest difficulty in managing credit obligations. Regardless of the model, a 590 score suggests that lenders may view an applicant as a high-risk borrower.

Practical Implications of a 590 Credit Score

A credit score of 590 presents challenges when seeking financial products. Lenders use these scores to determine eligibility for loans, interest rates, and other terms. Individuals with a 590 score may find it difficult to obtain personal loans, auto loans, or mortgages, as many lenders prefer applicants with higher scores. If approved, interest rates will likely be considerably higher.

Access to credit cards is also limited with a 590 score, with options restricted to secured credit cards that require an upfront deposit. Unsecured cards, if offered, will likely come with a low credit limit and high annual percentage rates (APRs). Beyond traditional lending, a low credit score can affect other aspects of daily life. For instance, landlords may conduct credit checks, potentially leading to rental application denial or a larger security deposit.

Insurance companies may also use credit-based insurance scores to determine premiums. A 590 score could result in higher premiums for auto or home insurance policies. Additionally, utility providers might require substantial security deposits for new service.

Common Factors Contributing to a 590 Credit Score

A 590 credit score results from factors that negatively impact creditworthiness. Payment history is a primary determinant, accounting for 35% of a FICO Score and being highly influential for VantageScore. Late payments, missed payments, or accounts sent to collections can severely lower a score, with the impact being more significant for recent and frequent delinquencies. Bankruptcies and foreclosures also have a profound negative effect on credit.

Credit utilization, the amount of revolving credit used compared to total available credit, is another significant factor, making up 30% of a FICO Score. Maintaining high balances on credit cards can signal financial distress and lower a score. A short credit history also contributes to a lower score. The length of credit history accounts for 15% of a FICO Score.

New credit applications, which result in hard inquiries, can temporarily reduce a score. Numerous inquiries in a short period can be viewed as risky. The credit mix, or the diversity of credit accounts, plays a role, accounting for 10% of a FICO Score. A lack of diverse credit types may hinder score improvement.

Actionable Steps to Improve Your 590 Credit Score

Improving a 590 credit score requires a deliberate and consistent approach, beginning with reviewing your credit reports. Consumers are entitled to a free credit report once every 12 months from Equifax, Experian, and TransUnion via AnnualCreditReport.com. Regularly checking these reports helps identify errors that can then be disputed.

The primary step is to ensure all payments are made on time. Payment history is the heavily weighted factor in credit scoring models, so consistent, on-time payments are key for rebuilding. Setting up automatic payments or reminders can help avoid missed due dates. Reducing credit card balances is another important action, aiming to keep credit utilization below 30% of the available credit limit. Paying down balances improves utilization and demonstrates responsible credit management.

Avoid opening new credit accounts, as each new application generates a hard inquiry. Instead, consider secured credit cards, which require a cash deposit and are accessible to individuals with lower scores. These cards report payment activity to credit bureaus. Another option is a credit-builder loan, where the loan amount is held in an account while you make regular payments, which are reported to the credit bureaus. If you have accounts in collections, consider contacting the creditors to negotiate a payment plan or a “pay for delete” agreement.