It’s another lovely Monday, so let’s take a look at a very specific credit score to assess its worth (or lack thereof).
Today we’ll pick apart a “580 credit score” like a vulture, which on the surface is a bad credit score. I’m sure even a credit score novice would assume this.
But as always, before getting started, we need to apply the correct credit score scale to ensure we’re doing the math correctly.
580 Fico Score is Sub-Subprime
If we’re talking Fico scores, which are the most popular out there, then it’s nearly right smack-dab in the middle of 300 and 850, which is Fico’s standard range.
Unfortunately, a 580 credit score is far from the average credit score, which is supposedly in the low 700s.
And with subprime credit scores typically referred to as those at 620 and below, you’re even south of that nasty distinction.
So if you’ve got a 580 Fico score, you’ve got plenty of work to do.
You most likely have a major derogatory account, such as a collection or charge-off, perhaps on top of some other missed payments.
And you may have high outstanding balances and maxed out credit limits, not to mention a thin credit history.
It’s not the end of the world, but you’ll want to clean up your act fast.
If you Fico score is around this level, you will most certainly have difficulty getting approved for credit cards and other types of loans, and get slapped with higher than average interest rates if you are approved.
580 is a Terrible VantageScore
If we’re talking about the lesser-known and relied upon VantageScore, a 580 credit score means you have terrible credit.
The VantageScore ranges from 501-990, so you’d be pretty rock-bottom and in their “F” credit grade category.
We all know an “F” letter grade is nothing to aspire towards, so if you fall into this category you have seriously damaged credit. And most likely a foreclosure or even a recent bankruptcy.
In either case, credit score monitoring could be a good idea to keep track of your progress as you attempt to improve your credit score.
What to Do?
Focus on stopping the bleeding – meaning keeping balances at bay or paying them down, paying everything on time, and negotiating with your creditors if you’re unable to do all of that.
Also look into disputing any negative items with the credit reporting agencies directly via their websites. It can be done online these days!
Just keep in mind that it’s going to take time to get a good credit score, and an excellent credit score is probably years away, unless there’s a serious error causing all of this.
Tip: How to improve your credit score.
(photo: Leo Reynolds)
How do I get my 580 score back to 700?
It really depends why it’s that low to begin with. If you have late payments, only time will heal those. If you have large outstanding balances, paying them down will help more quickly.