Credit Scores Between 450 and 499: Good or Bad?

If you have a credit score that’s between 450 and 499, you might be wondering where you stand. Unfortunately, your situation isn’t great—any score in this range is a bad credit score and will be classified as one of the worst scores in every major credit scoring model.

Scores in this range are actually closer to the lowest credit score of 300 than they are to the average credit score in the US (approximately 711). Fortunately, you’re not stuck with a score between 450 and 499 forever—there are things you can do to improve your credit. Read on to learn more.

What a credit score between 450 and 499 means for your life and finances

When your credit score falls between 450 and 499, it can make life hard for you in several ways. The major downsides include:

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

Your credit score is a reflection of how creditworthy you are (or appear to be). Lenders use it to decide whether or not to extend you new lines of credit or loans.

With a score of 450–499, it will be hard to qualify for new credit. If you do, you’ll get charged a high interest rate for it, and many lenders will tack on other additional charges to compensate for the risk that you won’t pay the money back.

This is a significant effect that can cost you a lot of money. The table below shows the kind of interest rate you can get with a score in this range alongside what you can get with a more typical score.

Average Interest Rates According to Credit Score

What this means: When you get credit with a score between 450 and 499, you’ll have to pay more for it—a lot more. If you don’t need the money urgently, it might be better to hold off for a year or two before applying for new credit accounts.

You can work on improving your credit in the meantime, and when you finally apply, you’ll be eligible for much more favorable terms.

You’ll have trouble getting a job, apartment, and many common services

Both landlords and employers sometimes conduct credit checks on applicants. Although there’s no minimum credit score required to rent an apartment or get a job, many property managers and companies automatically deny applicants with scores below 620. Unfortunately, that means your score may qualify for instant rejection.

You’ll face similar difficulties trying to get services in industries where credit checks are common. You may have a hard time getting (and will definitely have to pay more for):

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

The takeaway: Overall, a credit score between 450 and 499 is bad news. It makes life harder—and more expensive—in many different ways.

Fortunately, your score doesn’t have to stay this low forever. With the right strategies, there are a lot of ways to improve your credit score, both in the short term and over time.

However, before you worry about that, it’s a good idea to make sure you understand how your credit score was calculated.

Explained: Your credit score in 1 minute [Video]

How your credit score was calculated

When you use credit (e.g., by spending on credit cards or taking out loans), your creditors report information about your borrowing habits to three large compies: Equifax, Experian and TransUnion. These companies, which are known as credit bureaus, produce records of your activity called credit reports.

The information on your credit report is then run through a scoring “model” to produce your 3-digit credit score. There are two notable companies that produce credit scoring models in the US: FICO and VantageScore.

Both companies produce several of these scoring models, and lenders (such as banks) are free to use whichever one they want. This means that you don’t just have one single credit score—you have dozens.

If that sounds slightly overwhelming, don’t worry. All of these models are relatively similar, which means that, even though your score won’t necessarily be between 450 and 499 in all of them, it probably isn’t too far off in any of them. More importantly, you can follow the same strategies to improve your score in every model.

What factors go into the calculation of a FICO score between 450 and 499?

FICO looked at five factors to calculate your credit score:

• Payment history: This is a record of your payments (whether late or on time) on all of your credit cards and loans, as well as any debts you’ve defaulted on that have been sent to debt collectors (such as medical debts). Your low score suggests you’ve had problems paying your bills on time.
• Amounts owed: The most important part of this scoring factor is your credit utilization ratio, which is the amount that you’re spending on your credit cards relative to your limit. With a score between 450 and 499, there’s a good chance you’re overspending.
• Length of credit history: The older your credit history (which is primarily measured by the average age of your credit accounts), the better your score will be.
• Credit mix: This is a relatively minor factor that measures how many types of credit accounts you have. Your credit score will get a slight boost if you have a diverse mix that features both credit cards and loans.
• New credit: This factor looks at the number of credit checks you’ve gotten recently and how many new credit accounts you’ve opened. When you apply for credit, your lender will conduct a check known as a hard inquiry that will lower your score for several months. To boost this factor, refrain from applying for new credit unless you actually need it (in other words, don’t just apply for something because you got an offer letter in the mail).

Note that not all of these scoring factors are equally important. To see which ones matter more, review the charts below.

Scoring factors in the FICO model

Differences between FICO and VantageScore

Although VantageScore is a completely separate company from FICO, their credit scoring models look at roughly the same factors.

Improving your score in one model will almost always improve it in the other one.

Scoring factors in the VantageScore model

It’s worth noting that significantly more lenders use FICO scores than VantageScore credit scores. You don’t really need to worry about the differences between FICO and VantageScore when working on boosting your score past the 450–499 range; just focus on improving your FICO score and your VantageScore will closely follow.

How to improve a credit score between 450 and 499

With a score between 450 and 499, you almost certainly have one or more derogatory marks on your credit report (derogatory marks are records left by credit mishaps, such as making late payments on your credit cards).

To recover from the black marks on your reports, you should look into both of the following:

Quick fixes for your credit score

The fastest and simplest way to fix your credit quickly is to take the derogatory marks dragging down your score and get them removed.

This isn’t always possible, but you have absolutely nothing to lose by trying. To delete a derogatory mark from your credit, you should:

• Obtain copies of your credit reports from AnnualCreditReport.com (you can do this once per year for free)
• Dispute any errors on your credit reports that you find when you review them (credit reporting errors are fairly common, and may consist of, e.g., delinquent debts that you actually paid or credit accounts that actually belong to someone with a similar name, not to you at all)
• Explore negotiation strategies to remove any remaining (legitimate) derogatory marks, such as goodwill deletion (for debts you’ve already paid) or pay for delete (for debts that you haven’t)

If you’re interested in filing a credit dispute, you can get started by creating a dispute letter using the free template we’ve provided below.

What to expect: If any of the strategies in this section are successful, your score might shoot up very quickly. However, you should know that they aren’t guaranteed to work at all (unless there really are errors on your reports, which you’re entitled to get removed).

Sustainable methods to rebuild your credit over time

There are several strategies that you can pursue to improve your credit score over time and maintain a good score once you achieve it. Unlike the quick fixes above, these are guaranteed to work as long as you follow them faithfully—they basically boil down to “practice good credit habits.” If you do that for a period of several years, there’s no limit to how high your credit score can go.

To rebuild your credit, do the following:

• Open credit accounts that are designed for people with damaged credit, like secured credit cards and credit-builder loans, and use them responsibly
• Don’t overspend on your credit cards (keep your balances low); try to pay off your credit cards in full each and every month
• Take concrete steps to get out of debt (and don’t take on new debts unless you’re sure you can pay them off without straining your finances)
• Use a service like Experian Boost or a third-party rent-reporting service, such as PayYourRent or eCredable, to add your regular bill payments to your credit report

What to expect: Again, if you follow the strategies above, your credit score is guaranteed to recover over time. It may take several years to achieve a really good credit score, but it may be possible to get a fair credit score in 1 to 2 years if you do everything right.

How long will it take for a credit score between 450 and 499 to completely recover?

Negative marks never stay on your credit report for more than 7 years (with the sole exception of some bankruptcies, which remain for 10). This means that in a maximum of 7–10 years, absolutely none of the information that’s dragging your score down will be able to harm it anymore, which puts a cap on how long your journey of recovery can take.

In practice, you won’t actually have to wait for 7 years. The damage caused by negative information fades before the information itself disappears from your report. Unless you’re an atypical case, in 3–4 years, most of your negative marks will have a negligible effect and your credit will be mostly recovered—unless you incur further damage in the meantime.

Credit cards for borrowers with scores between 450–499

With a credit score between 450 and 499, you won’t be able to get a very good credit card. When you go looking for a card, don’t aim for one with a high credit limit or great rewards—look for one that you can use to rebuild your credit (by regularly making small purchases and paying them off promptly).

Once your credit score improves, you can go looking for a more desirable card, but for the time being, keep your expectations realistic. We’ve listed several good cards for bad credit that you may be able to qualify for below.

Before applying, check whether you’re likely to qualify for the card with your current score (call the issuer if you’re not sure). When you apply, they’ll conduct a credit check called a hard inquiry. Hard inquiries take a few points off your credit score for a few months, and you want to avoid incurring any that you don’t have to, as this will damage your score and drop it even lower.

Loans for borrowers with scores between 450–499

As with a credit card, it will be very hard to qualify for a decent loan with your current credit score. Any loan you’re eligible for will have a high interest rate, and (in contrast to a credit card), there’s no way to avoid paying interest on a loan. If you can, you should wait to apply until your score is a bit better.

However, if you need a loan now, you may be qualify for some of the ones listed below.

Auto loans

If you need to finance a car, look into loans from the companies listed below. You might be eligible, even with your current credit score.

Again, if you can avoid taking out an auto loan with a score between 450 and 499, do so. You might be able to buy a decent secondhand car with cash instead, which will prevent you from doing further damage to your credit with unmanageable, high-interest debt.

Mortgages

It’s unlikely that you’ll be able to qualify for a mortgage with your credit score. Generally speaking, the easiest home loans to get are backed by the Federal Housing Administration (FHA), and these still require a minimum score of 500.

You’re not that far off from that goal; if you rent a home or apartment while making a serious effort to boost your score, you might be able to qualify for an FHA loan in a few months to a year.

Personal loans

As you’d expect, it’s also tricky to get a personal loan with a score that falls between 450 and 499. Lenders are free to set their own requirements, but the most common minimum credit score to get a personal loan is around 600.

If your situation is dire and you can’t wait to get a loan until your score improves, you can:

• Get a trusted family member or friend (with good credit) to cosign your loan with you
• Get a secured personal loan (one backed with collateral, i.e., something you own that your lender can seize if you fail to pay them back)
• Apply for a loan from a credit union—these lenders often have laxer requirements than banks