Is 604 a Good Credit Score? And How to Improve It

A credit score is a three-digit number that evaluates an individual’s creditworthiness and their ability to repay borrowed money. It plays a significant role in various financial decisions, from securing loans to obtaining credit cards. A higher score generally indicates a lower risk to lenders, leading to more favorable financial opportunities.

Understanding Credit Score Ranges

Credit scores are calculated using information from credit reports, primarily by two major scoring models: FICO and VantageScore. Both models typically use a numerical range from 300 to 850, where a higher score signifies better credit management.

FICO scores categorize credit as Poor (300-579), Fair (580-669), Good (670-739), Very Good (740-799), and Exceptional (800-850). A score of 604 falls within the “Fair” category under the FICO model. VantageScore also uses a 300-850 scale, with its categories defined as Very Poor (300-499), Poor (500-600), Fair (601-660), Good (661-780), and Excellent (781-850). Lenders use these ranges to assess the likelihood of a borrower making timely payments.

Implications of a 604 Credit Score

A credit score of 604 signals to lenders that an applicant carries a moderate level of risk, falling below the national average FICO score, which was 715 in 2023. While it may not prevent all borrowing opportunities, it often leads to less favorable terms compared to those with higher scores. Approvals may be possible, but they typically come with higher interest rates and potentially lower credit limits.

For credit cards, individuals with a 604 score may qualify for basic or secured credit cards, though premium cards with extensive rewards or low annual percentage rates (APRs) are generally out of reach. Secured cards require a cash deposit, which often acts as the credit limit, mitigating risk for the issuer. This score also impacts auto loans, where borrowers might face significantly higher interest rates. For example, in the first quarter of 2025, a borrower with a credit score in the 601-660 (nonprime) range could expect an average new car APR of around 9.83%, compared to 5.18% for those with a superprime score (781-850). This difference can add thousands of dollars to the total cost of a vehicle over the loan term.

Mortgage options exist for those with a 604 credit score, but conventional loans typically require a minimum score of 620 for some programs, or even 660 for lower down payment options. Government-backed loans, such as FHA loans, are more accessible, often requiring a minimum score of 580 for a 3.5% down payment. However, these loans may include mandatory mortgage insurance premiums. Personal loans are also generally available for individuals with a 604 score, though these too will likely carry higher interest rates than those offered to borrowers with stronger credit profiles. Lenders may also require additional documentation, such as proof of income or employment, to mitigate the perceived risk.

Strategies for Improving Your Credit Score

Improving a credit score, particularly from a 604, involves consistent, responsible financial behaviors that address the factors influencing the score. Payment history is the most significant factor, accounting for 35% of a FICO score and up to 40% for VantageScore. Making all payments on time, every time, is paramount. Setting up automatic payments can help ensure bills are never missed.

Managing credit utilization is another impactful strategy, making up 30% of a FICO score. This refers to the amount of revolving credit currently being used compared to the total available credit. Experts generally recommend keeping credit utilization below 30% on each credit card, but lower is better. Paying down credit card balances strategically, perhaps even multiple times within a billing cycle, can help reduce the reported utilization.

The length of credit history also plays a role, with older, well-maintained accounts positively contributing to the score. Avoiding the closure of old, unused accounts can preserve this length. New credit applications result in a “hard inquiry” on a credit report, which can temporarily lower a score by a few points and remain on the report for up to two years. Therefore, opening multiple new accounts in a short period should be avoided unless necessary.

A healthy credit mix, including both installment loans (like car loans or mortgages) and revolving credit (like credit cards), can also benefit a score over time, demonstrating the ability to manage different types of debt. Finally, regularly reviewing credit reports from each of the three major credit bureaus (Equifax, Experian, and TransUnion) for inaccuracies is important. Disputing any errors can lead to their removal, potentially boosting the score. Most negative items, such as late payments or collections, typically remain on a credit report for seven years, though their impact diminishes over time.