Is a 599 Credit Score Bad? How to Improve Your Score

A credit score is a numerical representation of creditworthiness. This three-digit number, typically ranging from 300 to 850, estimates how likely a person is to repay borrowed funds and make timely payments. Companies use credit scores to make financial decisions, including approving mortgages, credit cards, and auto loans. Higher scores generally result in more favorable interest rates and terms.

Understanding Credit Score Ranges

Credit scores are categorized into ranges indicating credit risk. The two most common scoring models in the United States are FICO and VantageScore, both use a 300-850 scale. Categorizations vary slightly, but general guidelines exist.

For FICO Scores, a 599 score falls into the “Fair” category (580-669). “Poor” is 300-579, “Good” is 670-739, “Very Good” is 740-799, and “Exceptional” is 800-850.

VantageScore 3.0 categorizes scores from 300 to 549 as “Very Poor” and 550 to 649 as “Poor.” Therefore, a 599 credit score is considered a low score within both major credit scoring models, indicating a higher perceived risk to potential lenders.

Impact of a 599 Credit Score

A 599 credit score can restrict access to financial products and services, leading to less favorable terms or denials. Lenders view this score as an indicator of increased risk, making them hesitant to extend credit or require higher compensation. This score can affect everything from securing a personal loan to renting an apartment.

For personal loans, a 599 score likely means higher interest rates compared to those with better credit. Lenders charge higher rates to offset default risk. The total borrowing cost will be higher over the loan’s term.

Securing credit cards is challenging with a 599 score; many issuers may deny applications. If approved, cards might come with low credit limits, high annual fees, and elevated interest rates. This limits financial flexibility and hinders building a positive payment history.

Mortgage and auto loan approvals are less likely with a low score, and interest rates will be higher if approved. A hundred-point difference can mean thousands more in interest over a loan’s life. Lenders may also require larger down payments or shorter repayment terms.

A 599 credit score can also impact rental applications and insurance premiums. Landlords often review credit reports to assess tenant financial responsibility. A low score might lead to a higher security deposit, a co-signer requirement, or outright rejection of the rental application. Insurance providers (auto, home) may use credit scores to determine premiums, often charging higher rates to those with lower scores.

Factors Influencing Your Credit Score

Several key components contribute to your credit score, each weighted differently in the scoring models. Understanding these factors helps clarify why a score might be 599 and where improvements can be made.

Payment history is the most significant factor, accounting for about 35% of a FICO Score and being “extremely influential” for VantageScore. It reflects on-time bill payments, including details on late payments, missed payments, bankruptcies, and collection items. Consistent on-time payments are vital for a positive score; even a single late payment can negatively impact it, especially if 30 days or more past due.

Credit utilization, the amount of credit used relative to available credit, is another major factor, making up about 30% of a FICO Score and 20% of a VantageScore. A high utilization ratio, such as using more than 30% of available credit, signals financial overextension to lenders. Maintaining low balances on revolving accounts demonstrates responsible credit management.

The length of credit history influences about 15% of a FICO Score and 20% of a VantageScore. It considers the age of the oldest, newest, and average age of all accounts. A longer history of responsible credit use correlates with higher scores, providing more data for lenders.

Credit mix, the types of credit accounts held (e.g., credit cards, auto loans, mortgages), accounts for about 10% of a FICO Score. Lenders prefer to see a diverse portfolio of both revolving (credit cards) and installment (car loans) credit, demonstrating responsible debt management. This factor has a smaller influence than payment history and credit utilization.

New credit inquiries, recent credit applications, typically make up about 10% of a FICO Score. Each new credit application results in a “hard inquiry” on the credit report, causing a temporary score dip. Opening multiple new accounts quickly can be viewed as risky, especially for those with limited credit history.

Steps to Improve Your Credit Score

Improving a 599 credit score involves consistent effort and financial management. Focusing on heavily influential factors leads to progress.

Making all payments on time is the most impactful action, as payment history carries the most weight in credit scoring models. Setting up automatic payments for bills (credit card minimums, loan installments) ensures timely payments and prevents late fees and negative reporting. Even a slightly late payment typically only impacts the credit report if 30 days or more past due.

Reducing credit card balances and maintaining a low credit utilization ratio is effective. Aim to keep balances below 30% of the available credit limit on each card (ideally lower), signaling responsible credit use. Paying down revolving debt can quickly increase scores once lower balances are reported.

Regularly review credit reports from all three major bureaus (Equifax, Experian, TransUnion) to identify and dispute errors. Incorrect information, like accounts not belonging to you or inaccurate late payment notations, can negatively affect your score. Consumers are entitled to a free copy of their credit report from each bureau annually.

For those with limited or poor credit history, a secured credit card can be beneficial. These cards require a cash deposit as the credit limit, reducing issuer risk. Responsible use (on-time payments, low utilization) is reported to credit bureaus, helping establish positive payment history.

A credit-builder loan also offers a structured way to build credit. With this type of loan, funds are held in a locked account while the borrower makes regular payments over 6 to 24 months. On-time payments are reported to credit bureaus, and the borrower receives the saved funds (minus fees or interest) at the end of the term. Both secured credit cards and credit-builder loans provide a path to demonstrate financial responsibility and improve a low credit score.