Is a 573 Credit Score Good? What It Means & How to Improve

A credit score is a numerical representation of an individual’s creditworthiness. This three-digit number, typically ranging from 300 to 850, helps lenders assess the likelihood of a borrower repaying borrowed money. Credit scores play a significant role in various financial decisions, influencing access to credit products and the terms offered. Understanding your credit score is an important part of managing your personal finances effectively.

Interpreting Credit Score Ranges

Credit scores are generated by different models, with FICO Score and VantageScore being the most widely used. While specific ranges can vary, they generally classify scores into categories such as Excellent, Good, Fair, and Poor. For instance, a common FICO model categorizes scores from 300-579 as “Poor,” 580-669 as “Fair,” 670-739 as “Good,” 740-799 as “Very Good,” and 800-850 as “Excellent.”

A credit score of 573 falls within the “Poor” range for most common scoring models. This indicates to lenders that an individual may present a higher risk of defaulting on financial obligations. Consequently, it can impact the types of credit and terms an individual may be offered.

What a Lower Credit Score Means for You

Having a credit score in the lower range, such as 573, presents several financial challenges. Accessing new credit becomes more difficult, as lenders may be hesitant to approve applications for loans, mortgages, or credit cards due to perceived risk. Even if approved, individuals with lower scores face significantly higher interest rates, leading to increased borrowing costs. For example, a $25,000 auto loan could cost thousands more in interest for someone with a 500 score compared to a 720 score.

A lower credit score can affect other aspects of daily life. Landlords often check credit reports during rental applications, potentially making it harder to secure housing. Insurance providers may use credit-based scores to determine premiums for auto or home insurance policies, leading to higher rates. Utility companies might require larger security deposits for services like electricity or gas.

Key Elements of Your Credit Score

Your credit score is calculated based on several factors derived from your credit reports, each carrying different weight. Payment history is the most influential component, reflecting whether you consistently pay your bills on time. Late or missed payments can significantly lower your score. The amount of debt you owe, particularly how much of your available credit you are using (credit utilization), also plays a substantial role. Maintaining low credit utilization, ideally below 30% of your credit limits, is recommended.

The length of your credit history, including the age of your oldest account and the average age of all accounts, contributes to your score. A longer history of responsible credit management is viewed favorably. New credit applications, which result in hard inquiries on your credit report, can temporarily lower your score. A healthy mix of different credit types, such as installment loans and revolving credit, can positively influence your score.

Strategies for Raising Your Credit Score

Improving a lower credit score like 573 requires consistent effort and strategic financial management. A foundational step is to regularly obtain and review your credit reports from the three major credit bureaus—Equifax, Experian, and TransUnion—which you can access for free annually. Carefully check for any inaccuracies, such as accounts that are not yours or incorrect payment statuses, and dispute them promptly with the reporting agency. Correcting errors can sometimes lead to an immediate score increase.

Establishing a pattern of on-time payments is important, as payment history carries the most weight in credit score calculations. Set up payment reminders or automatic payments for all your bills, including credit cards, loans, and utilities, to avoid missing due dates. Reducing your credit utilization ratio is another impactful strategy; focus on paying down credit card balances to keep the amount of credit used low relative to your available credit limits. Aim to pay more than the minimum due whenever possible.

While working to reduce existing debt, avoid opening new credit accounts unnecessarily. Each new application can result in a hard inquiry, which may slightly lower your score temporarily. Resist the urge to close older credit accounts, as keeping them open contributes positively to the length of your credit history. A longer credit history can demonstrate a consistent track record of responsible management.

For individuals with limited credit history or those rebuilding credit, secured credit cards or credit-builder loans can be effective tools. A secured credit card requires a cash deposit that often acts as your credit limit, helping you build a positive payment history. Credit-builder loans are designed to help you establish credit; the loan funds are held in a locked account until you repay the loan, and your payments are reported to credit bureaus. Becoming an authorized user on a trusted individual’s well-managed credit card account can also benefit your score, provided the primary cardholder maintains a strong payment history and low utilization.