Is 581 a good credit score?
FICO scores range from 300 to 850. As you can see below, a 581 credit score is considered Fair.
|Credit Score||Credit Rating||% of population|
|300 – 579||Poor||16%|
|580 – 669||Fair||17%|
|670 – 739||Good||21%|
|740 – 799||Very Good||25%|
|800 – 850||Exceptional||21%|
581 Credit Score Credit Card & Loan Options
Some lenders choose not to lend to borrowers with credit scores in the Fair range. As a result, your financing options are going to be somewhat limited. With a score of 581, your focus should be on building your credit history and raising your credit scores before applying for any loans.
One of the best ways to build credit is by being added as an authorized user by someone who already has great credit. Having someone in your life with good credit that can cosign for you is also an option, but it can hurt their credit score if you miss payments or default on the loan.
Can you get a credit card with a 581 credit score?
Credit card applicants with a credit score in this range may be required to put down a security deposit. Applying for a secured credit card is probably your best option. However, they often require deposits of $500 – $1,000. You may also be able to get a “starter” credit card from a credit union. It’s an unsecured credit card, but it comes with a low credit limit and high interest rate.
If you are able to get approved for a credit card, you must make your monthly payments on time and keep your balance below 30% of your credit limit.
See also: 7 Best Secured Credit Cards
Can you get a personal loan with a credit score of 581?
Very few lenders will approve you for a personal loan with a 581 credit score. However, there are some that work with bad credit borrowers. But, personal loans from these lenders come with high interest rates.
It’s best to avoid payday loans and high-interest personal loans as they create long-term debt problems and just contribute to a further decline in credit score.
To build credit, applying for a credit builder loan may be a good option. Instead of giving you the cash, the money is simply placed in a savings account. Once you pay off the loan, you get access to the money plus any interest accrued.
See Also: 8 Best Personal Loans for Bad Credit
Can I get a home loan with a credit score of 581?
The minimum credit score is around 620 for most conventional lenders.
However, for those interested in applying for an FHA loan, applicants are only required to have a minimum FICO score of 500 to qualify for a down payment of around 10%. Those with a credit score of 580 can qualify for a down payment as low as 3.5%.
See also: 9 Best Mortgage Loans for Bad Credit
Can I get an auto loan with a 581 credit score?
Some auto lenders will not lend to someone with a 581 score. If you are able to get approved for an auto loan with a 581 score, it could be expensive. If you can raise your credit score, getting a car will be much easier.
See also: 6 Best Auto Loans for Bad Credit
How to Improve a 581 Credit Score
Credit scores in the Fair range often reflect a history of credit mistakes or errors. For example, you may have some late payments, charges offs, foreclosures, and even bankruptcies showing up on your credit report.
It’s a good idea to grab a copy of your free credit report from each of the three major credit bureaus, Equifax, Experian, and TransUnion to see what is being reported about you. If you find any negative items, you may want to hire a credit repair company such as Lexington Law. They can help you dispute them and possibly have them removed.
Lexington Law specializes in removing negative items from your credit report. They have over 18 years of experience and have removed over 7 million negative items for their clients in 2020 alone.
They can help you with the following items:
- hard inquiries
- late payments
- charge offs
Where to Go from Here
It’s important to pay down your balances and keep your credit utilization under 30%. It’s also wise to have several different types of credit accounts that include a mix of installment and revolving credit.
Of course, you also want to focus on making timely payments from here on out. Even one late payment can be very damaging to your credit.
Length of credit history also plays an essential role in your credit scores. You want to show potential creditors that you have a long, positive payment history.
Building good credit doesn’t happen overnight, but you can definitely speed up the process by making the right moves.
Give Lexington Law a call for a free credit consultation at (800) 220-0084 and get started repairing your credit today! The sooner you start, the sooner you’ll be on your way to having excellent credit.