Is 595 a Good Credit Score & How to Improve It

A credit score is a three-digit number, typically ranging from 300 to 850, that represents an individual’s creditworthiness. Lenders use these scores to assess the likelihood of a borrower repaying debts on time and to approve new credit accounts. A higher credit score generally indicates a lower perceived risk, leading to more favorable terms and access to a wider array of financial products.

Understanding Your Credit Score

Two primary credit scoring models are widely used: FICO and VantageScore. Both models predict a borrower’s credit behavior, though they may weigh factors differently. Their categorization of these scores into ranges like “Poor,” “Fair,” “Good,” “Very Good,” and “Excellent” can vary.

A credit score of 595 generally falls into the “Fair” or “Poor” category. For instance, FICO considers scores between 580 and 669 as “Fair,” and scores below 579 as “Poor.” VantageScore 3.0 classifies scores from 500 to 600 as “Poor.” This score represents a higher perceived risk to lenders compared to individuals with higher scores.

Implications of a 595 Score

A 595 credit score has several consequences when seeking credit. Lenders view scores in this range as higher risk, resulting in stricter approval criteria, lower credit limits, or denial for personal loans, auto loans, and mortgages. If approved, loans typically come with significantly higher interest rates. For example, a borrower with a FICO score in the 590-619 range might face an average annual percentage rate (APR) of 15.92% on a 60-month new auto loan, compared to 5.34% for someone with a score of 720 or higher. These elevated interest rates translate into substantially higher overall costs.

The impact extends beyond traditional lending. Landlords frequently check credit reports during rental applications, and a low score might lead to denial or the requirement of a larger security deposit. Utility companies and some insurance providers may use credit scores to determine deposit requirements or set premiums. In some instances, certain employment screenings may also involve a credit check, though this is less common for all job types.

Factors Influencing Your Credit Score

Payment history is typically the most significant factor, demonstrating an individual’s track record of making payments on time. Late or missed payments, especially those more than 30 days past due, can substantially negatively impact a score and may remain on a credit report for up to seven years.

Credit utilization, which is the percentage of available revolving credit being used, is another highly influential factor. Keeping credit card balances low relative to credit limits is generally beneficial, with experts often recommending keeping utilization below 30%. The length of credit history also plays a role, as a longer history of responsible credit management can positively affect scores. The mix of different types of credit, such as installment loans (e.g., auto or student loans) and revolving credit (e.g., credit cards), can also contribute positively by demonstrating an ability to manage various credit products. New credit applications and recently opened accounts can have a temporary, lesser impact, as they often trigger “hard inquiries” which can slightly lower a score.

Steps to Improve Your Credit Score

Improving a 595 credit score involves consistent effort and strategic financial management. The most impactful action is making all payments on time, every time, as payment history carries the most weight in credit scoring models. Setting up automatic payments or calendar reminders can help ensure bills are paid before their due dates.

Reducing credit card balances and lowering credit utilization ratios is another effective step. Paying down high-interest debt and aiming to keep balances well below 30% of available credit limits can significantly boost scores. This can be achieved by making multiple small payments throughout the month or focusing on the highest-interest debts first. Regularly reviewing credit reports for errors is also important; consumers are entitled to free weekly reports from each of the three major credit bureaus (Equifax, Experian, and TransUnion) via AnnualCreditReport.com, and inaccuracies should be disputed promptly.

Avoiding opening too many new credit accounts in a short period is advisable, as each new application can result in a hard inquiry that temporarily lowers a score. For individuals seeking to build credit from scratch or rebuild a damaged history, secured credit cards or credit-builder loans can be beneficial tools. A secured credit card requires a cash deposit as collateral, which often becomes the credit limit, making approval easier while still reporting payment activity to credit bureaus. Credit-builder loans involve making regular payments into a savings account, with the funds released at the end of the loan term, demonstrating responsible payment behavior. Becoming an authorized user on an account with a strong payment history can also help, provided the primary account holder manages the account responsibly.