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If you recently checked your credit score and received a 400, you’re undoubtedly curious about what it means for your credit and how it will impact your financial life.
While there’s not much good news about having a 400 credit score, there are several actions you can take to get yourself back on track. The key is to get started immediately.
Your 400 score summarized
Given that the lowest credit score is 300, a score of 400 is considered a very bad score, unfortunately. Both FICO and VantageScore place it in the lowest score range, labeling it as “poor” or “very poor.”
You can compare your 400 against your generation’s average credit score below. You’ll notice it’s not only much lower than than your own generation’s but also lower than every other generation’s average score.
A 400 credit score will interfere with your life in many ways you may not expect, even beyond getting access to cheap loans. However, it’s important not to feel discouraged—you can recover. There are ways to give yourself a near-immediate boost, which we outline below.
How a 400 credit score affects your life
It’s difficult to live in the United States with a 400 credit score because so many necessities, like housing and transportation, rely on having decent credit.
It’s harder (and more expensive) to get credit
With a credit score of 400, lenders won’t trust you enough to give you credit cards and loans. And if they do, the credit accounts you get will come at a steep price, featuring extremely high interest rates and fees.
We estimate the interest rates you could expect to pay with a 400 score below. You can also compare what you’d pay if you had better credit.
Average Interest Rates According to Credit Score
|Credit Score Tier||Avg. Credit Card APR |
|Avg. Auto Loan Rate
|Deep subprime (300-499)||23.9%||14.39%|
|Near prime (601-660)||22.6%||7.65%|
|Super prime (781-850)||17.5%||3.65%|
What the above table shows is that with a 400 credit score, you’ll end up paying hundreds or thousands of dollars more than you would normally on any type of loan. It’s counterintuitive, but people with better finances pay less to borrow more money.
It’s harder to get an apartment, a job, and other essentials
Some landlords and employers will conduct credit checks on you to determine if they should rent to you or give you a job. While there’s no minimum credit score needed to rent an apartment or get a job, the 620–650 range is commonly cited as a cutoff point—with a score of 400, you’re well below that range.
Common services such as the following will also be more expensive with a score of 400:
- Utilities (like electricity, water, and gas)
- Mobile phone contracts
While life is difficult with a 400 credit score, there are concrete steps you can take to improve your credit score. If you’re in serious debt, it will be more difficult, but even then there are tools you can use to help yourself.
400 credit score explained in 1 minute [Video]
How your 400 credit score was calculated
It’s natural to wonder how you received such a low score of 400. The short version: Your credit score was calculated by information existing in your credit report. If your credit score was generated by FICO (more on this later), then FICO analyzed five main factors in your credit report to generate your 400 score.
- Payment history: How often you pay on time or late. A score of 400 suggests that you’ve missed payments on some or all of your accounts.
- Amounts owed: How much of your available credit you’re actively using (i.e., credit utilization ratio). With a 400 score, you may be overspending on your credit cards.
- Length of credit history: How old your newest and oldest accounts are as well as the average age of all of your accounts.
- Credit mix: How many different types of credit accounts you have. You need both revolving credit (credit cards) and loans to have a good credit mix.
- New credit: How many hard inquiries you have from credit applications and the number of credit accounts you’ve opened recently. 1 Don’t apply for new credit unless it’s necessary.
If you checked your credit score online (like with CreditKarma), or it’s provided to you by your credit card company, it’s possible you received a VantageScore credit score, not a FICO score.
Although there are minor differences between FICO and VantageScore, if one model gives you a score of 400, 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.
Be aware: 400 is not your only credit score
As stated, there are two main companies that produce credit scores: FICO and VantageScore. FICO scores are used in around 90% of all lending decisions. 2
In addition, both companies produce different credit-scoring models. For instance, if you checked your FICO score, you also need to know which model was used to calculate it (like whether it was FICO 8, FICO 9, or some other version). Even from FICO alone, you have dozens of other credit scores, depending on the model used.
However, all of your scores will probably be fairly similar to 400.
Differences between FICO and VantageScore
As the graphs below show, VantageScore looks at more or less the same factors as FICO:
How far is my 400 score from the next level up?
You can see in the table below how far your credit score is from the next level up in both VantageScore and FICO models. You’ll need to check which company provided your credit score.
|Your Rating||Points to Rating Upgrade||Points to Rating Downgrade||Average Score in US|
How to recover from a 400 credit score
A score of 400 indicates that you’ve actively damaged your credit. Your credit report likely has severe derogatory marks on it, like late payments, accounts in collection, bankruptcies, or foreclosures.
It may seem like an impossible goal, especially if you’re still in debt, but you can recover with the right tools and strategies and a little effort.
Fast fixes for your 400 score
Fixing your credit score fast is difficult, but there are some methods you can use to correct mistakes or get small boosts.
- Order your credit reports, which you can get for free from AnnualCreditReport.com
- Dispute mistakes you see on your report, like late payments that you actually made on time
If negative marks get deleted, you may be able to increase your 400 score significantly in a matter of several months. (Yes, that’s considered fast.)
To dispute negative information on your credit report, create a dispute letter using the downloadable template below.
If your negative marks are legitimate and you can’t dispute that, you can try negotiating with your creditors and debt collectors, though it’s not likely to work. Try asking for a goodwill deletion if you already paid off the debt. If you haven’t, propose that they delete the account once you pay up in full.
Long-term strategies to rebuild your credit
Unfortunately, quick fixes aren’t likely to get your credit score into the range you need it to be to get decent loans and credit cards. You’ll need to focus on rebuilding your credit over time to get your score up, even to a fair credit score rating.
You’ll need to try a mix of credit-boosting tools and maintain good credit habits. Do the following:
- Get easily approved accounts like secured credit cards and credit-builder loans to help you add a positive payment history to your credit report
- Become an authorized user on a responsible person’s credit card
- Use your credit cards lightly and try to pay them off in full and on time every month
- Add alternative data to your credit report with Experian Boost or a third-party rent-reporting service, such as PayYourRent or eCredable
- Do your best to get out of debt (and stay out of it)
Your score of 400 will eventually recover, but only if you use your credit responsibly from here on out.
How long will it take to recover from a 400 score?
It’s likely going to take a few years for your 400 score to fully recover. Technically, most negative information (with the exception of bankruptcy) stays on your credit reports for a maximum of 7 years. Provided you don’t have other credit mistakes in the meantime, that means you could fully recover in that time.
Thankfully, your score will probably recover faster than that. Negative information does become less potent as it ages, and as long as you’re pumping in fresh, positive information into your report, you’ll look like a responsible borrower again sooner than you think.
Credit cards for a 400 credit score
With a score of 400, you simply don’t have access to the best credit cards with good rewards and low APRs. At this stage, you should be thinking of credit cards as a tool to pump good information into your credit report and nothing more. Light to moderate credit use benefits your credit score—but you should only be purchasing items you know you can afford, if possible.
Credit cards for bad credit like the following are suitable for someone with a 400 credit score.
Research each card prior to applying to see if you meet the minimum requirements. Most applications will trigger a hard inquiry, and hard inquiries take a few points off your credit score for several months. 3
Loans for a 400 credit score
As stated, it’s either going to be difficult to get a loan or extremely expensive. Still, there are loan companies that may lend to you despite your 400 credit score.
Several auto loan companies offer bad credit car loans that you can qualify for with a 400 score. You can look into the following companies:
It may be a better option to simply buy a used car with cash. Just be sure to have a mechanic inspect the car before you buy it so that you don’t end up facing car repair fees that could further damage your finances and hurt your credit.
You likely won’t qualify for a mortgage with a 400 credit score. A mortgage backed by the Federal Housing Administration (FHA) requires a minimum credit score of 500. You’ll likely need to rent a house or apartment until you’ve reached that score.
Unfortunately, personal loans are also hard to get with a 400 score. Generally speaking, the minimum credit score to get a personal loan is in the 600s or higher, though it will depend on each lender.
If you’re in desperate need of a loan, you can try the following:
- Ask a family member or friend to cosign your loan
- Try to get a secured personal loan. (You’ll need to put up collateral that you’re comfortable with losing if you default.)
- Borrow money from a credit union