An unfortunate fact of debt is that it often takes far longer to repay than it did to accumulate it in the first place.
And if you happen to fall behind on that debt, each late payment can knock dozens of points off of your credit score. Before you know it, you could find yourself struggling to rebuild a FICO Score that’s fallen below 500.
While it can be difficult to find the credit you need to rebuild a 450 to 500 credit score, options for new credit still exist even with a low credit score.
Credit Cards: 450-500 Credit Score
In a world where even street artists now take credit cards, it can be a challenge to get along without one.
Luckily, credit cards are among the easiest types of new credit to obtain with a low credit score, particularly if you choose a card specifically designed to help poor-credit consumers rebuild their credit scores.
1. Fingerhut Credit Account
Over the last few decades, Fingerhut.com has grown from a mail-order catalog to a vast eCommerce website with thousands of products from hundreds of major brands.
And those products can help you rebuild credit through the responsible use of a WebBank/Fingerhut Advantage Credit Account, an unsecured credit line with no annual fee that can only be used to make purchases on Fingerhut.com. (See complete WebBank/Fingerhut Advantage Credit Account Terms and Conditions.)
at Fingerhut'ssecure website
- Easy application! Get a credit decision in seconds.
- Build your credit history – Fingerhut reports to all 3 major credit bureaus
- Use your line of credit to shop thousands of items from great brands like Samsung, KitchenAid, and DeWalt
- Not an access card
See Issuers Website
While the WebBank/Fingerhut Advantage Credit Account is designed for building credit, some consumers may not qualify. These consumers will be automatically reviewed for eligibility for a WebBank/Fingerhut FreshStart Installment Loan.
With a FreshStart Loan, you can finance a purchase of $50 or more by making a $30 down payment. Then, you’ll make six to eight regular payments until the full financed amount is repaid.
If you make all of your payments in full and on time, and complete your FreshStart Loan, you may become eligible for a WebBank/Fingerhut Advantage Credit Account.
2. Capital One® Secured Mastercard®
As the name states, the Capital One® Secured Mastercard® is a secured credit card that will require a cash deposit to open and maintain.
The deposit required for an initial $200 credit limit will be $49, $99, or $200, with the exact amount depending on your credit profile. That said, with a 450 to 500 credit score, you will likely be required to put down the full $200 if approved.
- No annual fee
- Unlike a prepaid card, there is regular reporting to the 3 major credit bureaus
- Accepted at millions of locations worldwide
- Make the minimum required security deposit and you'll get an initial credit line of $200. Plus, deposit more money before your account opens to get a higher credit line
- Access to an authorized bank account is required to make your $49, $99 or $200 refundable security deposit
- Be automatically considered for a higher credit line in as little as 6 months with no additional deposit needed
On the plus side, the deposit you make to open your secured credit card is fully refundable so long as you maintain your account in good standing.
To reclaim your deposit, you can simply close your credit card account. You may also get your deposit back if you show significant credit improvement, as Capital One regularly checks your progress to see if you’re ready to be upgraded to an unsecured credit card.
3. Brink’s Prepaid Mastercard®
If you want a way to play with plastic that won’t be impacted by your credit score, then a prepaid card like the Brink’s Prepaid Mastercard® may be the way to go.
Unlike a credit card, prepaid cards aren’t tied to a line of credit, so you won’t need a credit check to get approved. Plus, none of your activity will be reported to the credit bureaus, so using your Brink’s Prepaid Mastercard® won’t impact your credit score.
Brinks Prepaid Mastercard
This card is currently not available.
To use the Brink’s Prepaid Mastercard®, you’ll need to load funds onto the card, which can be done via a direct deposit, mobile check loading, or by transferring funds from an existing bank account.
So long as your Brink’s Prepaid Mastercard® has a positive balance, you can use it to make purchases anywhere Mastercard is accepted.
While the fact that the Brink’s Prepaid Mastercard® doesn’t depend on your credit score can be useful, it can be a double-edged sword. That’s because the lack of credit reporting means that the Brink’s Prepaid Mastercard® can’t be used to build your credit score or a positive payment history.
4. First Progress Platinum Elite Mastercard® Secured Credit Card
The First Progress Platinum Elite Mastercard® Secured Credit Card can be a good choice for those who may need to occasionally carry a balance thanks to the fairly low APR.
The initial deposit you’ll need to make will depend on how large of a credit line you want, as the two are directly tied. For example, you can put down up to $2,000 if you would like a $2,000 credit line. The minimum deposit amount to open a First Progress Platinum Elite Mastercard® Secured Credit Card is $200.
at First Progress'ssecure website
- Invest your tax refund to improve your credit by making the refundable deposit for your new secured card today
- No Credit History or Minimum Credit Score Required for Approval
- Monthly Reporting to all 3 Major Credit Bureaus to Establish Credit History
- Credit Line Secured by Your Fully-Refundable Deposit of $200 -- $2,000 Submitted with Application
- Nationwide Program though not yet available in NY, IA, AR, or WI *See Card Terms.
- Apply in just a few moments with no negative impact to your credit score; no credit inquiry will be recorded in your credit bureau file
Bad / No Credit
While the security deposit acts as collateral against default on your credit card debt, don’t think you can use your deposit to cover your bill. Your deposit is only used to repay your card balance if the bank forcibly closes your account for delinquency.
In this case, your deposit is used to cover your remaining balance, as well as any applicable late fees and interest charges. If your balance and fees add up to more than your deposit amount, you’ll still be on the hook for repaying the remainder.
Personal Loans: 450-500 Credit Score
The two main types of personal loans available are installment loans and short-term loans. Installment loans are generally long-term loans of six months or more, while short-term loans typically have terms of less than three months.
With a credit score of 450 to 500, you’ll likely be limited to loans of $1,000 or less, no matter which type of loan you seek.
Installment loans will generally be more affordable, with much lower rates and fees, while short-term loans are more expensive but may be easier to obtain.
When you’re dealing with a low credit score, particularly one in the sub-500 range, online lending networks, like BadCreditLoans.com, can be your best friend.
Lending networks can connect borrowers with hundreds of potential lenders from around the country to increase the chances of finding a compatible lender.
- Loan amounts range from $500 to $5,000
- Experienced provider established in 1998
- Compare quotes from a network of lenders
- Flexible credit requirements
- Easy online application & 5-minute approval
- Funding in as few as 24 hours
Though you’re unlikely to receive the maximum number of offers with a 450 to 500 credit score, you may receive up to four offers so you can compare terms for the best fit.
In addition to limiting the number of offers you receive, a sub-500 credit score also means you’ll probably be charged an interest rate at or near the installment loan maximum of 35.99%.
However, you can still impact the size of your monthly payment by varying the length of your loan. Just remember that longer loans are more expensive in the long run to due additional interest charges.
Another online lending network, MoneyMutual.com specializes in lenders who offer short-term cash advance loans. Unlike installment loans, short-term loans are generally repaid as a single lump sum that includes both the principal and all finance charges.
Since approval for short-term loans is usually more dependent on your income than your credit score, the key will be to use the lending network to compare offers and find the lowest rates.
- Short-term loans up to $2,500
- Online marketplace of lenders
- Funds available in as few as 24 hours
- Simple online form takes less than 5 minutes
- Trusted by more than 2 million customers
- Not available in NY or CT
When browsing short-term loan offers, it’s important to understand the different types of fees. Short-term loans typically charge finance fees based on how much you need to borrow. For example, it’s not uncommon to be charged $20 in finance fees for every $100 you borrow.
This type of fee can make it more difficult to compare the cost of different types of credit products, as most list fees based on the interest rate, or APR.
When you do the math, a basic short-term loan often has a three-digit APR. For instance, a $1,000 loan charging $20 per $100 and repaid after four weeks has an APR of 434%.
Auto Loan: 450-500 Credit Score
Given that most automobile loans are secured by the vehicle they finance, you may have luck finding a lender willing to extend an auto loan despite a 450 to 500 credit score.
The caveat here, of course, is that you’ll probably need a fairly sizable down payment or, at least, a trade-in of decent value. In any case, don’t expect to finance a high-priced luxury car, and if you have trouble finding a loan, consider looking for a lower-priced vehicle.
7. Auto Credit Express
In many cases, dealers — and/or their third-party financiers — are more willing to work with bad credit than a big bank. Rather than go from dealer to dealer looking for a match, however, you can use an online dealer network like Auto Credit Express.
There is no fee to use Auto Credit Express to connect with a dealer, and the site has over 1,200 partners to help borrowers of all types. While there is no minimum credit score, you’ll need to have a monthly income of at least $1,500 to qualify.
- Dealer partner network has closed over $1 billion in auto loans
- Can help those with bad credit, no credit, bankruptcy, and repossession
- Established in 1999
- Easy, 30-second pre-qualification form
- Bad-credit applicants must have $1500/month income to qualify
Auto Credit Express has an easy, 30-second pre-qualification form that can help determine which dealers are best for your situation. Once you connect with a dealer, you’ll be invited to meet with a dealer representative to choose a vehicle.
It’s important to note that Auto Credit Express is an online network, not a lender. The process of selecting a specific car and completing the loan is all done with the individual dealer.
Home Loan: 450-500 Credit Score
To qualify for a conventional mortgage, you’re typically going to need a credit score of at least 620 (with a big down payment), but ideally one over 680.
With a credit score below 600, chances are that you’ll need to use an FHA-backed mortgage to purchase a home since the FHA has no minimum credit score requirements for their loans. However, lenders can set their own requirements, so a 450 to 500 credit score will likely make finding a loan a challenge.
You may be able to improve your odds by reducing your debt-to-income ratio as much as possible and by putting forward a down payment of 20% or more.
As with other types of loans, finding a mortgage with a sub-500 credit score is likely going to require shopping around a bit. Not every lender will offer FHA loans or be willing to work with such a low credit score.
An online lending network, like LendingTree.com, can eliminate a lot of hassle by connecting you with hundreds of lenders with one easy form.
- Find lenders for new home purchases, refinancing, home equity loans, and reverse mortgages
- Lenders compete for your business
- Offers in minutes
- Receive up to 5 loan offers and select the right one for you
- Founded in 1996
- Over $250 billion in closed loan transactions
LendingTree.com can also help you find a lender to refinance your mortgage loan, to obtain a home equity loan, or even a reverse mortgage.
Each type of mortgage has its own distinct characteristics and requirements, but all three use your current home as collateral. Be sure to do your homework before taking on any type of loan that could put your home in jeopardy.
Even with Poor Credit, You Still Have Options
It only takes one dire financial event to fall behind on your debts — and only a few delinquent payments to see your credit score crash.
Trying to rebuild a sub-500 credit score can be a challenge, especially when few lenders want to take on your credit risk. Thankfully, there are still ways to find new credit and start rebuilding through positive credit behaviors. Just remember, when you do get a second chance, making all of your payments on time is one of the most important actions you can take to prove your creditworthiness and turn that score around.
Range of credit scores covered in this article: 450, 451, 452, 453, 454, 455, 456, 457, 458, 459, 460, 461, 462, 463, 464, 465, 466, 467, 468, 469, 470, 471, 472, 473, 474, 475, 476, 477, 478, 479, 480, 481, 482, 483, 484, 485, 486, 487, 488, 489, 490, 491, 492, 493, 494, 495, 496, 497, 498, 499, 500