Are you worried about your financial future because you have a 570 credit score?
A good credit score is essential for getting approved for a mortgage, car loan, credit card and even a bank account. And if you’re looking to rent an apartment or buy a home, your credit score will be one of the most important factors landlords and financial institutions consider.
But don’t worry – even if you have a low credit score, there are still things you can do to improve it. We’ll explain the factors that determine your credit score and help you fix it.
Our guide provides simple, step-by-step instructions that anyone can follow. You don’t need any special skills or knowledge – just some time and patience.
Keep reading to understand how you can improve your 570 credit score.
Understanding the Credit Score Range
To figure out how to improve your credit score, you need to understand the credit score range. The majority of creditors use a three-digit credit score system called the FICO score. This ranges from 300 to 850, and is the most common way creditors rate their borrowers.
The higher your credit score number, the better. And the higher your credit score, the lower your interest rate will be on loans and credit cards.
The factors that determine your credit score fall into five categories:
Poor 350-580: Your 570 credit score falls in this category. Unfortunately, a low credit score means you have to pay higher interest rates on loans and you might not be able to get approved for a credit card.
Key Takeaways: A 570 credit score puts you in the poorest tier of loan applicants, so your choices may be limited when applying for loans or other financial products.
Fair 581-669: A score within this range indicates some late payments or a history of financial challenges within the last 7 years. You may pay lower interest rates on loans; however, your credit rating may be too low for some lenders to approve you for some services.
Good 670-739: A score within this range indicates you might be a good credit risk for lenders if your score is in this range. This means you probably pay off loans and debts on time, even if there’s no activity showing up in the account statements or history of accounts that are open.
As long as those positive factors continue to show through during an application process with the potential creditor(s), then chances are you’ll be approved with a good interest rate.
Very Good 740-799: This is one of the best scores you can hope for before getting into the “exceptional” level. This means that your credit report shows no negative activity or at least not enough to affect your credit score.
As long as you continue your positive credit actions, then the chances of being approved are very high with a great interest rate.
Excellent 800-850: This is the highest score a creditor can give. People with excellent credit have a flawless credit history, and they rarely experience late payments or defaults on any financial products that they use.
Credit Score Factors
What factors determine your credit score? Five categories make up a creditor’s decision about whether to approve you for credit or not.
If you continue to pay bills on time, constantly show responsible behavior, and make positive contributions to your credit history, then your score will increase every month. But if you stop paying bills or miss payments, these negative actions will eventually damage your credit score.
What’s more important is understanding the factors that make up your credit score, so you know what can decrease or increase it.
Here are some of the most common categories and what they mean:
- Payment History (35%) – Creditors want to know that if they give you a loan or credit card, then you’ll be able to pay it back on time. This factor is the most important part of your credit score, because you can’t go anywhere if you fail to pay back any loans or debts.
- Credit Utilization (30%) – The key factor is how much credit you are using compared to how much credit you have available. People who use less than 30% of their available credit score points higher than someone who uses 50% or more.
- Length of Credit History (15%) – This isn’t just limited to how long you’ve had the credit card or loan but also includes how long accounts have been opened and active. For example, if someone opens a credit account today and doesn’t use it for two years then cancels it, that will affect their credit score.
- Credit Mix (10%) – Whether you have credit cards, auto loans, student loans, or mortgages is another factor. Having different types of credit accounts can show creditors that you can manage your debt and repay them successfully.
- New Credit (10%) – How often have you applied for credit within the last two years? The more times you apply for credit within that period, the worse it will look to creditors. They may think that you’re desperate for financial assistance or that you can’t manage your money well enough to repay loans on time.
Getting Approved with a 570 Credit Score
If you have a credit score of 570, then the likelihood of being approved for any credit card is very slim because most banks require at least a 630 to 680 credit score.
There are credit cards that offer an unsecured option for people with less than perfect credit scores. However, keep in mind these cards may come with high interest rates and annual fee, so it’s best to use them only in emergencies if you’re approved.
For example, Capital One offers a credit card that doesn’t require a security deposit but has an APR of 24.9%, and the late payment penalty is $35.
If you’re approved, make sure to pay your balance on time and avoid carrying a large balance because that will increase the interest rate. The goal is also to show good credit behavior, which can eventually help improve your FICO credit score.
Another option is to consider getting the Extra Debit Card. With an Extra Debit Card, you can build your credit score and earn points on everyday purchases. This new type of card does all that – making it an exciting option for consumers who want more flexibility in managing their finances!
With a 570 credit score, the likelihood of getting approved for a mortgage loan is also low because most banks require at least a 680 to 720 credit score.
However, some lenders offer mortgages with high-interest rates, which means it’s up to you if you want to take that risk or not.
You can also consider FHA loans. The Federal Housing Administration allows borrowers to put down as little as 3.5% of the purchase price for a home, or even less in some cases.
In order to apply for a FHA loan, you’ll need to have at least a 580 credit score and show a steady source of income. This will give you an easier chance at having your mortgage approved. With a 570 score, you’re below the minimum credit score requirement. But by following our guide in the section below, you can improve your score well above that.
The best course of action is to improve your credit score as much as possible before applying. That way, you increase the likelihood of getting approved by a mortgage lender and at lower interest rates, which will save you money in the long run.
A 570 credit score may be low, but that doesn’t mean you can’t get an auto loan. It just means it will be harder to do so because most banks require at least a 630 to 680 credit score.
Some lenders offer auto loans with high-interest rates and fees, which will impact your monthly payments. So make sure you consider that before applying.
Home Equity Loans
If you have equity in your home, then a home equity loan can be another option to consider for people with credit scores under 650.
However, this will come with an interest rate and annual fee just like other loans, so it’s up to you if that risk is worth it or not.
You may be eligible for a personal loan. With a personal loan, you can borrow money at an interest rate that may be lower than what you currently have with credit cards.
However, just like other loan options, this will come with fees, and if you don’t pay on time, that interest rate will go up. Plus, the more your credit score drops, the worse terms lenders will offer.
Be aware of the fees and interest rates before applying for a personal loan, especially since this is the credit score we’re talking about. That will make or break whether or not you get approved.
10 Steps to Improving Your Credit
Now that we understand the factors that impact credit and the ranges that the credit score falls in, you can start the process of repairing your credit.
Get a Copy of Your Credit Report
To improve your credit score, you first need to understand what issues are.
Your credit report is a summary of your credit activity. It includes your credit accounts and your activity with those accounts, such as how often you’ve been late in paying.
It also shows if you’ve ever been sent to collections or sued for debts that went into collections. Plus, it includes any public records such as tax liens, bankruptcy filings, and civil judgments.
Getting a copy of your credit report is easy. You can contact one of the three major credit bureaus, Equifax, Experian, and TransUnion, online or by phone. You can also get a free copy of your credit report by visiting Annualcreditreport.com.
This website is the only authorized source where you can get a free copy of your credit report from each credit bureau once every 12 months.
Once you have access to your credit file, take time to read through the entire report to understand what’s there.
Track Your Spending
Once you understand what’s on your credit report, you should start tracking your spending.
Every purchase you make is recorded in one of the three credit reports, and it can show up as positive or negative depending on if you paid your bill on time or late. Plus, that information is used to calculate your credit score.
Being aware of what shows up on your credit report and what you’re paying for at all times is a great way to see where you can improve and then keep track of that improvement.
Dispute Inaccurate Information
If you find any inaccurate information, which is unsurprisingly common, then it’s time to start disputing.
The credit bureau must conduct a reasonable investigation. This includes forwarding your dispute to the original creditor if applicable and giving them 30 days to verify or correct the information. In most cases, they can’t just ignore your request. If they have more information, they must provide it to the credit bureau.
If the original creditor can’t verify that information or doesn’t respond within 30 days, then your credit report will be updated with what the credit bureaus found during their investigation.
Pay Any Past Due Accounts
If you have any late or missed payments, then it’s time to address them.
Even if the account is closed, a history of payment issues will continue to affect your credit score until it’s updated. So before you can start improving your credit history and score, you need to get a list of what accounts still show up on your credit report.
Make sure not to ignore any past due accounts. If you’re having trouble paying them, then it’s time to contact the creditor and see if any options can help.
Start Payments On Time
It doesn’t matter how much money you make or your income. If you don’t pay your bills on time, then your credit score will take a hit.
The best way to improve your credit score is to start making on-time payments. But, again, it doesn’t matter if you can only afford the minimum payment so long as you’re paying something and keeping the account active.
Focus on your Credit Card Balance
If you have multiple credit cards with a balance but only enough to pay the minimum on each account, focus on paying down that balance.
The smaller your credit card balances, the better it is for your credit score. This will lower your credit utilization ratio and optimize how much total debt you have compared to your total available credit.
Credit utilization plays an essential part of your credit score (30%). So if you have a credit card with a $8000 credit limit and a balance of $2000, then your credit utilization would be 40%. Your score will benefit from lowering that ratio.
By paying down your credit card debt, you will see an immediate impact on your credit score.
Keep Old Credit Lines Open
While it’s always a good idea to keep your oldest credit cards open, make sure that said card has no outstanding balance.
The average age of all accounts is another factor that affects your overall credit score (15%). So keeping an old account with a zero balance will show that you have a long-standing positive payment history with the creditor, which will pay off in the end.
Avoid Credit Inquiries
Unfortunately, applying for credit cards will cause a temporary drop in your score. It doesn’t matter how many accounts you open at one time, the impact on your credit score is instant.
The only exception to this is car loans or mortgages. If you apply for either of those types of financing, your score won’t be impacted until after closing.
After you have a little breathing room and have paid down your credit card debt, then it’s time to start applying for one or two new credit cards. Again, getting approved will lower your credit utilization ratio and show you can use credit responsibly.
But if your score is already low, the best thing you can do is avoid inquiries to not hurt your score any further. Just wait until you’ve taken care of the other items on this list before applying for new credit cards.
Once you’re approved for a card, don’t just charge it up and leave the balance on there forever. Instead, try to pay off as much debt as possible before using another credit card or applying for additional financing.
Have a Good Credit Mix
Having a diverse credit mix on your credit report is another sign of an educated borrower and shows that you can effectively manage multiple types of loans.
To get the best score possible, it’s recommended to have at least one installment loan (mortgage, auto loan) and one revolving loan (credit card).
Get a Secured Card
If you have no credit history or if your score is so low that it’s not worth your time, then getting a secured credit card can be beneficial.
A secured card will require you to deposit money into an account with the creditor, but this amount becomes your spending limit on the card.
After several months of good payments on the account, the creditor will release that money back into your account for you to use or withdraw as cash.
Should I Consider a Credit Repair Company?
If you’re still having trouble with your score or aren’t sure what you should be doing to get it back up, then credit repair services could help.
These companies charge a fee for their service but will use a variety of tactics to raise your score so you can qualify for better loan terms and lower interest rates.
However, be careful in selecting a credit repair service company. There are numerous companies that have given the industry a bad name.
Having a 570 credit score means there are some serious issues. While you can certainly fix these issues yourself, these credit repair companies have the expertise to remove items from your credit report quickly.
That said, you should temper expectations on what they can remove. For example, if they cannot remove a bankruptcy from your credit report if it’s valid.
You can set up a free consultation with either Credit Saint or Sky Blue Credit Repair to discuss your options and how they can help you.
How Long Will It Take For my 570 Credit Score to Improve?
This is probably the most asked question about improving your credit.
This is a tough question to answer. Unfortunately, having a 570 credit score means you have serious issues with your credit report that could take some time to improve.
In some cases, people have improved their score in 30 days, but usually not enough to move the needle significantly. Typically, if you have a credit score of 570 and follow all the steps discussed above, you could potentially see significant improvement within 9-12 months.
If you need to improve your score sooner than this because you are in the market for a new home or need to purchase a car and want to take advantage of attractive rates, consider getting a free consultation with Credit Saint or Sky Blue Credit.
They may be able to improve your timeframe and assist with the items on your credit report quickly.
Wrapping It Up
Although you’re far from reaching an 850 credit score, there are steps that can be taken today to get your 570 credit score moving in the right direction.
With a strong knowledge of how credit reports and scores work, you can take action and improve your poor credit score.
If your credit score isn’t where you want it to be, then take action today; otherwise, you run the risk of having a low credit score for the foreseeable future.
I hope this article has helped you understand how to get your 570 credit score moving in the right direction.