Credit Scores Between 301 and 349: Good or Bad?

Unfortunately, scores in this range are bad credit scores. They aren’t far from the lowest credit score of 300, and they’re in the worst scoring range in both major credit scoring models (FICO and VantageScore).

If your credit score is between 301 and 349, it’s low enough that it has the potential to seriously interfere with your life. Fortunately, there are ways to improve it. Read on to learn more.

What does a credit score this low mean for your life and finances?

Having a credit score between 301 and 349 comes with serious consequences, including:

It will be harder to get credit (and you’ll pay more for it)

Your low credit score suggests that you’ve had trouble managing your debts in the past, which means lenders will be reluctant to give you access to credit cards and loans.

When you apply for credit, you have a much higher chance of being declined. Any credit that you do qualify for will come with a high interest rate and potentially other fees as well.

The table below shows the approximate interest rates you can expect with a credit score between 301 and 349, next to the rates available to people with better credit.

Average Interest Rates According to Credit Score

What this means: When you get credit with a very low credit score, you can easily end up paying hundreds of dollars more than if you had a better score. The hard truth is that getting credit when your score is between 301 and 349 often isn’t worth it.

Loans (such as car loans and mortgages) will be especially deadly to your finances since you can’t avoid paying interest on them. Credit cards are a bit safer since you can avoid paying interest if you completely pay off your balance every month.

You’ll have trouble getting a job, apartment, and other essentials

Many employers conduct credit checks on applicants, and so do some landlords. There’s no universal minimum credit score required to rent an apartment or get a job, but the 620–650 range is a common cutoff point. Needless to say, a score of 301–349 is well below that range, and it may prevent you from getting a job or apartment.

With a credit score this low, you’ll also have to pay more for many common services, such as:

• Insurance
• Utilities (e.g., water, gas, and electricity)
• Cable
• Cell phone contracts

The takeaway: Your score is low enough that it will make life very difficult. However, there is hope. Your credit history isn’t set in stone, and there are ways you can improve your credit score once you understand how credit scores work and how they’re calculated.

Explained: Your 301–349 credit score in 1 minute [Video]

How your credit score was calculated

Your credit score is a three-digit number that reflects your risk as a borrower. The score you received was created from the information on your credit report.

There are two companies that create the models used to calculate credit scores, FICO and VantageScore. FICO scores are much more popular, being used in around 90% of all lending decisions.

Each company produces a number of different models, which means that the score you received actually isn’t your only credit score—you have dozens of others. However, all of your scores will probably be fairly close to 301–349 range, since the models are more similar than they are different.

FICO credit scoring factors

There are five main factors that went into the calculation of your credit score.

• Payment history: This is a record of whether you’ve made on-time payments on your credit accounts or not. A score between 301 and 349 suggests that you’ve missed payments on some or all of your accounts.
• Amounts owed: This mainly consists of your credit utilization ratio, which is how much of your available credit you’re actively using—in other words, how heavy your spending is on your credit accounts, especially your credit cards. With your low score, it’s possible you’re overspending.
• Length of credit history: This refers to the age of your oldest and newest credit accounts, as well as the average age of all of your accounts.
• Credit mix: This refers to the variety of the types of credit accounts you have. To boost your score higher, you should have both revolving credit accounts (e.g., credit cards) and loans.
• New credit: This includes the number of hard inquiries you have from credit applications and the number of credit accounts you’ve opened recently. To prevent your score from dropping even further, don’t apply for new credit unless you really need it. (This will also protect the length of your credit history.)

Scoring factors in the FICO model

Differences between FICO and VantageScore

As the graphs below show, VantageScore looks at more or less the same factors as FICO:

Scoring factors in the VantageScore model

Although there are minor differences between FICO and VantageScore, if one model gives you a score between 301 and 349, then your score in the other model will probably be similar. It’s very unlikely that you’ll have a bad credit score in one model and a good one in the other.

How to recover from a very low credit score

Having a score between 301 and 349 suggests that you have serious derogatory marks on your credit report, such as late payments, debts in collection, or bankruptcies. The good news is that it’s possible to recover from these marks with the right tools and strategies. You should investigate both:

Quick fixes for your credit score

To fix your credit quickly, you’ll want to remove as many of those negative marks as possible. To do this:

• Get copies of your credit reports, which you can obtain for free from AnnualCreditReport.com
• Dispute any items you find on your credit reports that you believe are mistaken (e.g., overdue debts that don’t actually belong to you)
• Try to negotiate with your creditors and debt collectors to remove your other (legitimate) negative marks, which you can do by asking for a goodwill deletion or proposing pay for delete

To dispute negative information on your credit report, create a dispute letter using the downloadable template below.

If you’re successful, you may be able to boost your score significantly in a matter of several months.

Long-term strategies to rebuild your credit

Scores between 301 and 349 are low enough that, although the quick fixes listed above may help, you’ll need to do more to raise your score to a decent level. Your score is more than 200 points away from the threshold at which a bad score becomes a fair credit score, and even if you can remove some of the negative marks on your credit report, you probably won’t be able to remove all of them.

To ensure a full recovery, explore strategies to rebuild your credit in the long run. Try to:

• Add positive information to your credit reports with low-risk, easy-to-get credit accounts like secured credit cards and credit-builder loans
• Practice good credit habits going forward; use your credit in moderation and try to pay off your credit cards in full every month
• Do your best to get out of debt (and stay out of it)
• Add alternative data to your credit report with Experian Boost or a third-party rent-reporting service, such as PayYourRent or eCredable

These strategies are more like long-term lifestyle changes than quick fixes, but if you stick to them, you can be sure your credit score will eventually recover.

How long will it take for your score to fully recover?

Negative information stays on your credit reports for a maximum of 7 years (with the one exception of certain bankruptcies, which stay for 10). This means that in 7–10 years, your credit score is guaranteed to have fully recovered (assuming that you don’t have any more credit mishaps in the meantime).

In practice, your score will probably recover much faster than that. Again, if you’re successful with the quick fixes above, you may see a modest improvement in your score in several months, and by faithfully sticking to the best practices for rebuilding damaged credit, you can be confident of a major improvement within 1–2 years.

Credit cards for scores between 301 and 349

Despite having a very low score, it’s possible for you to get a credit card. If used responsibly, it’ll even help raise your score over time. However, you should pick a card that’s designed to boost your score and is free or cheap to use, even if it’s lacking in perks. Avoid cards that you have to pay exorbitant fees for.

Below, you can browse credit cards designed for people with bad credit.

Don’t apply for a credit card if you know your credit score doesn’t meet the credit card company’s minimum requirements. Most applications will trigger a hard inquiry, and hard inquiries take a few points off your credit score for several months.

Loans for scores between 301 and 349

Auto loans

You’ll have more options if you wait until your score improves, but several auto loan companies offer bad-credit car loans that you can qualify for. Here are the best auto loans for people with very low credit scores:

Any loan you qualify for will have a relatively high interest rate. Your best option is to avoid taking out an auto loan altogether by just paying in cash for a used car. Make sure to get the car inspected by a mechanic before you buy it so that you don’t end up facing car repair fees that could further damage your finances and tank your credit.

Mortgages

Unfortunately, you probably won’t qualify for a mortgage with a credit score between 301 and 349. The minimum credit score to get a mortgage backed by the Federal Housing Administration (FHA) is 500. Until your credit score is high enough to qualify you for an FHA loan, you’ll probably need to rent a house or apartment instead.

Personal loans

You also probably won’t qualify for a personal loan with your low score. The minimum credit score to get a personal loan is generally in the 600s or higher, depending on your lender.

If you need a personal loan, you have several options:

• Apply for a secured personal loan (one which requires collateral that your lender will keep if you default)
• Find a family member or friend to cosign your loan
• Borrow money from a credit union if you’re already a member

You can explore those options in a pinch, but in general, you need at least fair credit before you’ll be approved for a personal loan.