A 502 credit score is considered poor by most credit scoring models.
Poor credit scores are also called tier four credit scores.
A poor credit score indicates that a borrower is a high credit risk and may find it difficult to repay their debts. It will be very challenging to get approved by a financial institution with a poor credit history.
Key Takeaways for a 502 Credit Score
Overview of Your
Credit Rating
502 is classified as a “poor” FICO Score. Poor FICO Scores range from 300 to 580.
Borrowing Options With a
502 Credit Score
You may find it challenging to get approved for new loans and credit cards. If you are eligible for funding, be prepared for high rates.
Improving a 502
Credit/FICO Score
You can improve a bad credit score by using secured credit cards or credit builder loans. It’s also important to avoid late payments and too many inquiries.
Is a 502 Credit Score Good?
A 502 credit score is not a good score. Good FICO Scores start at 670, which means you need to bump your score by at least 168 points to get good credit. Borrowers with good credit scores can typically get better rates, deals, and terms.
What Can You Get Approved for?
Self
4.6 Ninja Star Rating
- Build credit while saving money
- No hard credit pull
- Automatic payments
- Reports to all bureaus
Self is a lender that offers an easy and responsible way for borrowers to establish payment history and build credit, while saving money, through a credit builder account. It’s a small installment loan, but the money is yours, and even securitized by a CD.
Start Building Your Credit Score Today!
Katapult Lending
4.4 Trustpilot Rating
- lease purchase plans
- Simple process
- No hidden fees
- No credit required
Katapult offers lease purchase plans and paths to ownership for consumers who typically don’t have many financing options. If you’re considering a large purchase but you don’t have great credit, then Katapult may be able to help. They offer solutions with no credit required, and no late fees.
No Minimum Credit Score Required
Yendo
4.4 Google Rating
- Vehicle-secured credit card
- Up to $10,000 in revolving credit
- Quick & easy pre approval
- Build credit with responsible usage
Yendo is the first vehicle secured credit card. This means you can still get approved for their credit card, even with a less-than-perfect credit score. They use the value of your car to help determine your credit limit. They offer credit limits up to $10,000 with no hard credit inquiry.
Must Meet Their Approval Criteria
You may get approved for these loans with poor credit:
Personal Loans
It’s possible to get approved for loans for 500 credit score. A personal loan can be used for almost any expense, so many borrowers use them for emergencies. Many online lenders offer bad credit loans with competitive rates, so you can save money on these versatile installment loans.
Bank Loans
Unsecured bank loans may be hard to get if you don’t have an average credit score. While you may be eligible for secured loans with bad credit, rates and terms may not be ideal.
Credit Cards
Credit cards can be difficult to get if you have a bad credit history. If you want to work on improving your credit score and do not need a cash loan, consider applying for a secured credit card. Most creditors report your payment history to credit reporting agencies, so if you responsibly manage your secured revolving credit account, you can boost your credit and improve your credit report. According to the Center for Financial Services Innovation, secured cards make up nearly six million active lines.¹
These are some of the most popular secured cards:
- Chime Secured Credit Builder Visa® Credit Card
- Discover it® Secured Credit Card
- Capital One Platinum Secured Card
- OpenSky® Plus Secured Visa® Credit Card
- Citi® Secured Mastercard®
Car Loans
You may be eligible for a car loan despite having a bad credit score. However, your loan amount may be smaller than you want, and your annual percentage rate will likely be very high.
Products To Help Improve a 502 Credit Score
These products can help you boost your credit:
Credit Builder Loans
A credit builder loan is an installment loan that can help borrowers improve their credit history while saving money. Lenders will deposit the loan amount into a secure savings account. Once you complete the repayment process and pay off the full loan amount, the lender will give you access to the financial account.
Budgeting Apps
Budgeting apps offer users a lot of helpful features, like expense tracking and bill payment. Daily use of a budgeting app, such as YNAB or Goodbudget, can help you develop better spending habits and achieve financial goals. According to Google, 73% of smartphone users use an app to manage their finances.²
Credit Monitoring
Monitoring your credit score can help you stay up-to-date on your creditworthiness. Many credit card users can view their scores for free through their online accounts. However, you can also use a free credit monitoring website, such as Credit Karma or Experian.
Benefits of Improving Your 502 Credit Score
You can get these benefits with a higher credit score:
Easier Approval Process
Borrowers with higher scores generally experience an easier and quicker approval process. If you have a lower score, you may have to apply with multiple lenders to get approved.
Lower APRs
A higher score can help you get the lowest rates on the market. A lot rate on a loan or credit card can help you save a lot of money and greatly lower your chances of experiencing financial issues.
Higher Loan Amounts
High scores prove that borrowers are financially stable and likely to repay their debt on time. As a result, you can get higher loan amounts and credit limits with good or excellent credit.
How To Improve Your 502 Credit Score
Here’s how you can improve your 502 FICO Score:
Make Timely Payments
Your payment history is the most important factor that affects your credit scores. Avoid late or missed payments if you want to obtain a good credit score.
Limit Credit Inquiries
Having a solid credit mix is important, but remember that applying for a new loan or credit card can decrease your credit by as much as ten points. Financial experts generally recommend making less than six inquiries every two years.
Reduce Your Debt
Reducing your credit card debt can improve your credit scores! Make sure that your credit accounts are not maxed out and that your credit utilization rate is lower than 30%.
Here are a few tips on how to pay down outstanding debt:
Strategy | Description | Tips |
1. Pay More Than the Minimum | Pay beyond the minimum payment to reduce principal faster. | Aim to pay double the minimum or a fixed % above it. |
2. Debt Snowball | Pay off smallest debts first for quick wins, then move to larger ones. | Motivational boost as each balance is cleared. |
3. Debt Avalanche | Focus on debts with highest interest rates first. | Saves money on interest over time. |
4. Balance Transfer | Move debt to a lower interest rate card. | Look for 0% introductory rates; watch out for transfer fees. |
5. Budget Overhaul | Reduce expenses and allocate saved money to debt. | Categorize expenses and prioritize essentials. |
6. Extra Income | Use additional earnings from side jobs for debt. | Freelancing, part-time jobs, or selling unused items. |
7. Debt Consolidation | Combine multiple debts into a single loan with lower interest. | Simplifies payments and can reduce interest costs. |
FAQs About 502 Credit Scores
How often do credit bureaus update credit reports, and what does that mean for me?
Credit bureaus typically update credit reports every 30 to 45 days, but this can vary depending on the information supplied by creditors. Any positive or negative changes you make will be reflected in your credit report within this period.
Is it worth using a credit repair company to fix my bad credit?
Using credit repair companies can be beneficial if you feel overwhelmed by the process of disputing errors on your credit report or negotiating with creditors. But remember, everything a repair company can do, you can do yourself for free or with minimal cost.
What should I look for when applying for a credit card with bad credit?
Credit card applicants with bad credit should look for cards designed for their credit range, typically secured credit cards. When choosing a card, pay attention to the annual fee, interest rates, and whether the issuer reports to all three major credit bureaus.
What Interest Rate Can I Get With a 502 Credit Score?
Financial institutions may only approve you for a small loan amount with a high APR if you have bad credit. Lenders use interest rates to reduce the lending risk, so you are likely to get very high rates on loans and credit cards.
Can I Buy a House With a 502 Credit Score?
You may be eligible to get a mortgage with a 502 FICO Score. However, your loan offer will not be ideal. It may be better in the long run to work on improving your finances before trying to purchase a home.
