Hello! Today, I’ve partnered with Lexington Law to help answer the question “What is a bad credit score?”
Lenders and others who check your credit often have different ideas about what counts as a bad, fair, good, or excellent score. While definitions vary between institutions and credit bureaus, understanding where your score stands is important because it affects far more than loan approval — it can influence job prospects, insurance rates, and even housing applications.
Generally, a credit score of 700 or higher is considered good. The higher the score, the better your creditworthiness appears to creditors.
So what is a bad credit score?
Some people define a bad credit score as any number that prevents you from getting what you need, while others argue that credit isn’t essential. In reality, your credit score matters in many areas of life beyond borrowing. That’s why it’s important to know where your score stands and how it may affect your options.
In practical terms, a credit score below 560 is typically considered bad. Scores in the high 500s or low 600s may not be far better—in many cases they still limit your access to favorable rates and products. Aim to maintain as high a score as possible to keep your financial options open.
What is a credit score?
A credit score is a three-digit number that represents your creditworthiness and the level of risk you pose to lenders. Major credit bureaus—Equifax, TransUnion, and Experian—calculate scores based on the information in their files, so your score can vary between bureaus depending on the data each one holds.
Is it easy to damage your credit score?
Unfortunately, harming your credit score can be easier and faster than improving it. Small missteps can have a meaningful impact if they repeat or go uncorrected. Common ways people unintentionally damage their scores include:
- Paying bills late. Payment history accounts for about 35% of most scoring models. One or two late payments may not ruin your score, but consistent late payments will. Late payments can lead to finance charges, late fees, and potential reporting to credit bureaus. If you miss a payment, contact the creditor quickly—some companies may grant leniency and avoid reporting the late payment.
- High credit card usage. Your credit utilization—the percentage of available credit you’re using—matters. Staying below roughly 30% of your credit limit is commonly recommended. For example, on a $1,000 limit, aim to keep balances under $300 to avoid negative effects on your score.
- Closing old accounts. Length of credit history represents a portion of your score (about 15% in many models). Closing long-held accounts, even if you don’t use them, can shorten your average account age and reduce available credit, potentially lowering your score. If an old card has no annual fee, consider keeping it open.
- Not reviewing your credit report. Regularly checking your credit report helps you spot errors or fraudulent accounts that can drag your score down. Review your reports at least once a year and dispute inaccuracies promptly.
If you’d like more detail on common mistakes that hurt credit, resources and guides are available that explain each of these areas and how to address them.
If you’re considering professional help to repair your credit, Lexington Law is one option many people explore. They offer services that include a free personalized credit consultation, access to a TransUnion report summary, and a complimentary credit report review with suggested solutions.
- Free personalized credit consultation
- Free access to your TransUnion report summary
- Free credit report review and recommended solutions
Lexington Law has assisted many clients in disputing and resolving negative items on their credit reports, such as collections, late payments, judgments, bankruptcies, and foreclosures. By helping remove or correct questionable items, they aim to improve clients’ credit profiles and access to better financial products.
As Lexington Law explains, some consumers are labeled as high-risk because of inaccurate or misleading information on their credit reports. The law provides mechanisms to dispute questionable entries so they can be corrected or removed. Firms that specialize in credit repair help people pursue those disputes and work to restore their credit standing when appropriate.
What does a bad credit score mean to you?