A 571 credit score is considered a poor credit score. A poor score can make finances a little tough and more expensive. But just because you have a bad score it doesn’t mean that it has to stay there. Keep reading to learn more.
The good news is that there are ways that this score can be improved, and even with a poor score, there may still be financing options available.
Below is everything you need to know about a 571 credit score.
Key Takeaways for a 571 Credit Score
Overview of Your Credit Rating
A 571 credit score is a poor credit score. It is well below the average credit score in the United States, which is 716.
Borrowing Options With a 571 Credit Score
Unfortunately, a 571 credit score will mean a limited amount of financing options. However, bad credit loans, with carefully considered monthly payment plans, can bridge a short-term funding gap, allowing for manageable repayment schedules.
Improving a 571
Credit/FICO Score
Improving a 571 credit score is possible, and there are several different strategies to go about this; the most effective will depend on your existing credit history.
Is a 571 Credit Score Good?
A 571 credit score is considered a poor credit score. The good news is that it can be improved; keep reading to learn more.
What Can You Get Approved for With a 571 Credit Score?
There are some financing options that may work for a 571 credit score, however, many of them will require you to improve your credit score.
Personal Loans
Personal loans traditionally were only available for borrowers who have, at minimum, fair credit. This is still usually true when looking at personal loan options through lenders like banks or credit unions. However, there are online lenders that offer personal loans for borrowers who have bad credit. Borrowing a personal loan with bad credit may cost more in terms of interest rates, but with a structured monthly payment plan, they remain a viable option for covering unexpected expenses.
Bank Loans
Bank loans are any loans that come from a bank. Most banks offer a variety of loan products, including personal loan options, car loans, and even student loans. However, when you have a 571 credit score, you will likely not be able to access bank loans unless you have a cosigner or co-borrower.
Credit Cards
Credit cards are a form of revolving debt, which means they can be used multiple times as long as you don’t reach your credit limit. Although credit cards can be tough to get with bad credit, there are options for a 571 credit score:
- Chime Secured Credit Builder Visa® Credit Card
- Current Build Card
- Mission Lane Visa® Credit Card
Car Loans
Car loans or auto loans are usually the first type of financing that people turn to when they need to purchase a vehicle but don’t have the money upfront. If you are looking for auto loans with bad credit, your best options may be:
Option Type | Description |
Online Lenders | Digital platforms offering auto loans to individuals with various credit scores. |
Car Loan Specialists | Lenders like Carvana that specialize in auto loans, catering to bad credit profiles. |
Dealership Financing | Financing provided directly by car dealerships, often with flexible credit requirements. |
Products To Help Improve a 571 Credit Score
Improving your credit score takes work, but you don’t have to go through the process alone! There are lots of products and services that can really help you.
Credit Counseling Services
Credit counselors are licensed professionals who help people who are struggling with their finances, including credit scores. When looking for a credit counselor, it is important to look for reputable sources. A good place to start is with agencies that are accredited by bodies like the National Foundation for Credit Counseling (NFCC) or the Financial Counseling Association of America (FCAA).
Debt Management Plans
Many people struggle with debt, especially credit card debt. In a worst-case scenario, too much debt can lead to filing for bankruptcy, which can completely ruin your credit scores. If you got to your 571 score because of poor debt handling in the past, a debt management plan may be exactly what you need.
A debt management plan helps you organize your debts into a single monthly payment, making it easier to manage your finances and ensure timely payments, which is crucial for improving your credit score from 571.
Budgeting
Budgeting can be a great tool when trying to improve your credit score. You may not know it, but there are several pieces of a budget that will indirectly and sometimes indirectly impact your credit scores from the three major credit bureaus.
For example, one aspect of budgeting is creating a savings account. While having savings itself won’t improve your credit, having savings can help you avoid getting into bad debt if an emergency occurs or if you want to make a purchase. Savings accounts can also help you pay your bills if you lose your income unexpectedly. That is just one example of how budgeting can help your credit.
Credit Builder Loans
Credit builder loans are lending products that help people improve their credit. They are a little bit similar to traditional loans. However, there is a key difference. Unlike traditional loans, with one of these options, you won’t get the money upfront. Instead, the lender puts that money aside, and the borrower makes payments. Those payments are reported to at least one of the credit bureaus. Once all those payments are made, the lender will then provide the borrower with funding.
These can be a great tool when trying to build credit scores because payment history is the most significant factor that impacts your average credit score. Having a credit builder loan can also help diversify your credit mix. Here are some options to consider for credit builder loans:
- Self Credit Builder Account
- MoneyLion Credit Builder Loan
- Digital Federal Credit Union Credit Builder Loan
- Credit Strong’s Credit Builder Loans
Secured Credit Cards
Secured credit card accounts work similarly to credit builder loans in that they do not provide funds upfront. Still, instead, the borrower provides a deposit that sits in an interest-bearing savings account. They make monthly payments to their lender, who reports those payments, and once paid back in full, borrowers get the funds from that account.
Like credit builder loans, these options help build a payment history. If you make your payments on time, the credit card issuer may offer an actual credit line. Below are some examples of popular secured credit cards:
- Discover it® Secured Credit Card
- Capital One Platinum Secured Credit Card
- Platinum Secured Mastercard®
- Citi® Secured Mastercard®
- DCU Visa® Platinum Secured Credit Card
- U.S. Bank Cash+® Visa® Secured Card
- SDFCU Savings Secured Visa Platinum Card
Benefits Of Improving Your 571 Credit Score
Below are some of the benefits you could get after improving your 571 credit score.
A Lower Cost When Borrowing Money
If you improve your credit score, even if only by one credit score range, you will likely see a lower cost when borrowing money. The interest rates and APRS with loans and credit cards should go down, and in some cases, that may save you hundreds or even thousands of dollars when borrowing funds. Additionally, you may get approved for higher loan and credit amounts.
More Flexible Loan Terms
With a higher credit score, you can expect more flexibility from lenders with loan terms. For example, you may be able to access longer terms to repay your loan, or varying interest rates options.
The Ability to Finance Big and Small Purchases
Another benefit that can come with improving a 571 credit score is that you’ll have more access to finance small or large purchases. For example, many people finance the purchase of a home, furniture, and a car.
How To Improve Your 571 Credit Score
Improving a 571 score is definitely possible! Here are some tips to get you started:
Pay Your Bills On Time
The most important factor that impacts your score is your payment history. And so, when trying to improve your credit score, the most impactful thing you can do is pay your bills on time—specifically credit accounts. Even one late or missed payment can stay on your credit report for up to seven years, so try and avoid this as much as possible.
Keep Paid-Off Credit Accounts Open
It’s important to keep accounts open even after paying them off. While this may seem counterintuitive if you are trying to prevent additional spending, it can really help your credit utilization, another important part of your credit score.
Pay Off Your Debt
Paying off your debt can help several aspects of your credit score, especially your credit utilization. It can also help you with all parts of your finances. And so, prioritizing debt payoff can be helpful in improving your credit score.
Diversify Your Credit Mix
Your credit mix is the different kinds of loans and credit cards that you have on your credit history. Ideally, you want multiple credit accounts that are unique from one another. And so, if you are trying to improve your average credit score, be strategic about the loans or credit cards you are inquiring about.
FAQs About 571 Credit Scores
How does my credit history affect my FICO score, and what role does it play in achieving a higher credit score?
Your credit history is a detailed record of your borrowing and repayment activities, including credit cards, loans, and any other credit-based transactions. It significantly impacts your FICO score, which is a numerical representation of your creditworthiness. Factors such as the length of your credit history, the timeliness of your payments, and the diversity of your credit contribute to your FICO score calculation.
To achieve a higher credit score, maintaining a positive credit history by making consistent, on-time monthly payments and responsibly managing your total credit limit is crucial. This demonstrates to lenders that you are a low-risk borrower, potentially leading to better loan terms and lower interest rates.
Can obtaining a secured loan or secured loans improve my average credit score, and how do monthly payments factor into this?
Yes, obtaining a secured loan can be an effective strategy to improve your average credit score. Secured loans are backed by collateral, reducing the risk for lenders and often making them more accessible to individuals with lower credit scores.
By consistently making on-time monthly payments on your loan, you demonstrate financial responsibility and reliability to credit bureaus, which positively affects your credit score. Each on-time payment is reported to the credit bureaus, contributing to a positive credit history and gradually improving your average credit score. It’s important to manage these loans wisely, as late payments can negatively impact your score.
How does increasing my total credit limit affect my credit score, and is this a viable strategy for someone with an average credit score looking to achieve a higher credit score?
Increasing your total credit limit can positively affect your credit score by improving your credit utilization ratio, which is the amount of credit you’re using compared to your total available credit. A lower credit utilization ratio is viewed favorably by credit bureaus and can lead to a higher credit score.
For someone with an average credit score, requesting a higher credit limit on existing accounts or opening a new secured credit account can be a viable strategy. However, it’s essential to avoid the temptation to spend more just because your credit limit has increased. The key is to maintain or reduce your overall spending while benefiting from a larger credit buffer, which can contribute to a higher credit score over time through improved credit utilization and a solid payment history.
What Interest Rate Can I Get With a 571 Credit Score?
The interest rate with a 571 credit score will be on the higher end. This is because a lower credit score shows a lender that you are a lending risk, and the cost of borrowing the loan will reflect that risk.
Can I Buy a House With a 571 Credit Score?
If you have gone through the home-buying process already then you know that buying a house comes with a lot of parts. One of them will definitely be your credit score and credit history. When you have bad credit, you likely will not be able to secure a home loan on your own, even if your other requirements are met. So, if buying a home is a goal for you, then you will need to work on improving your credit scores from all of the credit bureaus.
Top 5 Resources for a 571 Credit Score
References:
- Americans’ Average Credit Score at Every Age—See How You Compare | CNBC
- Best Credit Cards for Bad Credit of February 2024 | NerdWallet