Emergency Loans For a 500 Credit Score

A 500 credit score means that you have a score that falls into the very poor range, which can make borrowing funds more challenging and expensive when compared to borrowers who have good credit. 

To better understand a 500 credit score, it may be helpful to understand the different FICO credit score ranges. (FICO is the most commonly used credit scoring system). Here are the ranges for a FICO score:

300–579: Poor

580–669: Fair

670–739: Good

740–799: Very Good

800–850: Exceptional

As you can see, a 500 credit score falls into the poor category, the lowest tier. There can be a few different reasons that your score is this low. In most cases, it will likely be because of a combination of negative actions regarding your credit or it may be because you have just gotten started with your credit portfolio. 

Here is one example of the typical credit history you can expect for an individual with a 500 credit score; they will likely have several missed or late payments with their credit accounts, they likely don’t have a long credit history (and if they do they haven’t handled their accounts in a responsible manner), they also probably have accounts in collections or past bankruptcies. 

As we mentioned briefly above, having a poor credit score will make borrowing more challenging and more expensive, but you may be curious about exactly how that can happen. With lower credit scores, you’ll have to deal with:

• High Interest Rates — Bad credit borrowers will often get high APR loans, which increases the overall cost of borrowing funds. 
• Low Loan Amounts — Loan underwriters take into account risk assessment when considering loan amounts for potential borrowers. A lower credit score will mean a lower loan amount—which can feel limiting if you need to borrow more than just a few hundred dollars. 
• Strict Borrowing Terms — For borrowers who are high-risk, lenders have more strict rules for repayment and loan terms. Personalization can sometimes be crucial when having the borrowing experience, and the lower your score, the less you may have with the loan process. 
• A Harder Time Finding a Lender — While there are lenders that work with poor credit scores, the lower your score, the harder it may be for you to find a lender that will approve a loan for you. Not impossible to do, but more challenging when compared to applicants who have fair or good credit. 

All of these things are a part of the borrowing experience for bad credit individuals because of the risk that comes for lenders. And because creditworthiness is a major tool that these lenders use for assessing risk, the lower your score the greater the costs and challenges. Even with these costs and challenges, it’s not impossible. There are lenders and loan options out there, including CreditNinja’s personal loans which are options for bad credit borrowers, with personal loans up to $5,000.