credit card advice
Contrary to common misconception, you don’t start out with a perfect credit score. It takes six months of credit history to even be eligible for a score, and if you do everything right in those six months, you’ll still typically start out with a middling score, at best.
And if you don’t do everything perfectly and make a mistake or two along the way, you may begin your credit score journey with a score that’s well below average — and even a good credit score can be brought down by a few bumps in the road.
Regardless of how you got there, however, a credit score between 550 and 600 isn’t the end of your journey. There are a number of options for obtaining the credit you need to improve your credit score despite a below-average rating.
Credit Cards: 550-600 Credit Score
Credit cards are by and large the easiest type of credit to obtain, particularly if you have a low credit score. That being said, not all credit cards are the same, and you’ll need to apply for cards specifically designed for consumers with low credit scores for the best chance of approval.
In general, a credit score of 600 or below means you’ll need to focus on store cards, unsecured subprime cards, or secured credit cards. Each has its pluses and minuses, so be sure to weigh all of your options before applying for a new credit card.
1. Fingerhut Credit Account
Fingerhut is an online retailer with a huge stock of products from hundreds of popular brands that includes everything from automotive accessories to toys and video games.
Fingerhut specializes is helping consumers build credit with everyday purchases by providing financing for its products for a variety of credit types. Customers can apply for financing online and receive a decision in minutes.
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
- Take advantage of low monthly payments if you apply and are accepted for a Fingerhut Credit Account issued by WebBank, who determines eligibility and qualifications for the terms of credit
See Issuers Website
Fingerhut financing applicants may be offered one of two credit products, depending on their credit profile: a WebBank/Fingerhut Advantage Credit Account or a WebBank/Fingerhut FreshStart Installment Loan.
Upon submitting a Fingerhut financing application, you’ll first be evaluated for a WebBank/Fingerhut Advantage Credit Account, which is a revolving credit line good for making purchases with Fingerhut, similar to a store credit card.
Those who don’t qualify for a Credit Account will automatically be considered for a FreshStart Installment Loan. If approved, you’ll be able to finance a Fingerhut purchase of at least $50 with a down payment of $30.
You’ll repay your FreshStart loan with monthly payments over six to eight months until your purchase is paid in full. Your payment behavior will be reported to the credit bureaus, so making all of your payments on time and as agreed can help boost your credit score.
2. Capital One® Secured Mastercard®
With a credit score below 600, you’ll likely need to turn to a secured credit card if you’re looking for a card option that you can use anywhere that doesn’t charge an annual fee.
The Capital One® Secured Mastercard® can be used anywhere Mastercard is accepted (subject to available credit). The card charges no annual fee and all new cardholders will receive an initial $200 credit limit with a deposit requirement of $49, $99, or $200, based on your credit profile.
- No annual fee, and all the credit building benefits with responsible card use
- Unlike a prepaid card, it builds credit when used responsibly, with regular reporting to the 3 major credit bureaus
- You will get an initial $200 credit line after making a security deposit of $49, $99, or $200, determined based on your creditworthiness
- Get access to a higher credit line after making your first 5 monthly payments on time with no additional deposit needed
- Easily manage your account 24/7 with online access, by phone or using our mobile app
- It's a credit card accepted at millions of locations worldwide
Consumers who make their first five Capital One® Secured Mastercard® payments on time can be eligible for a credit limit increase. Additional increases may be possible for cardholders who maintain their account in good standing.
Your Capital One® Secured Mastercard® deposit is fully refundable, and it can be reclaimed any time simply by closing your account in good standing (i.e., without an outstanding balance).
Additionally, Capital One may periodically check your credit progress to determine your eligibility for an upgrade to an unsecured credit product. If you become eligible, you’ll be upgraded automatically and your deposit will be returned.
3. Brink’s Prepaid Mastercard®
If you’d rather avoid dealing with any kind of credit, prepaid cards can provide a way to make card purchases. Prepaid cards aren’t associated with a credit line; instead, users must pre-load funds onto the card before they can make purchases.
The Brink’s Prepaid Mastercard® can be used to make purchases anywhere Mastercard is accepted, so long as you have funds available on your card. The monthly card fees will vary based on use and purchase plan.
at Netspend'ssecure website
- Brink's gives you the peace of mind you deserve. Securing cash and valuables since 1859.
- With Brink's Direct Deposit, you can get paid faster* than a paper check.
- No late fees or interest charges because this is not a credit card.
- Use the Brink's Money Prepaid Mobile App to manage your account on the go and get text message or email alerts (Message & data rates may apply.)
- Get your tax refund direct deposited to your Card Account and no more waiting in line to cash your check!
- *Card issued by BofI Federal Bank, Member FDIC. Card may be used everywhere Mastercard Debit cards are accepted. "Apply Now" for full details.
Variable Monthly Fees
No Credit Check
Although prepaid cards can be used to make purchases more or less the same way as credit cards, prepaid cards differ from credit cards in one important way: They’re not associated with a credit line.
While this lack of association means you won’t need to go through a credit check to qualify for a prepaid card, it also means that you won’t have the benefit of your account being reported to the credit bureaus.
As such, prepaid cards can’t be used to establish a credit profile or to build your credit score. If credit-building is your objective, you’ll need an unsecured or secured credit card instead of a prepaid card.
4. First Progress Platinum Prestige MasterCard® Secured Credit Card
While nothing in finance is guaranteed, secured credit cards are about as close as you can get to a sure thing. Because of the reduced risk provided by the required deposit, secured credit card issuers can have more flexible credit requirements.
Additionally, many secured credit cards charge lower rates and fees than unsecured subprime credit cards. The First Progress Platinum Prestige MasterCard® Secured Credit Card has one of the lower APRs available in the 550 to 600 credit score range and has a quick online application.
at First Progress'ssecure website
- Fund your new MasterCard® secured credit card with your tax refund today!
- Our card reports monthly to all three major bureaus and approval is based upon a fully-refundable security deposit.
- We can approve you at any credit score, no minimum required.
- No processing or application fees required.
- Full-featured Platinum MasterCard, accepted for car rentals, hotels, and millions of other locations worldwide.
- Credit Line Secured by Your Fully-Refundable Deposit of $200 - $2,000 Submitted with Application
Bad / No Credit
The size of your First Progress Platinum Prestige MasterCard® Secured Credit Card credit line will be directly based on the size of your deposit. You’ll need a deposit of at least $200 to open the card account, but you can deposit as much as $2,000 for a higher credit line.
As with all secured credit cards, the deposit for the First Progress Platinum Prestige MasterCard® Secured Credit Card is fully refundable and can be reclaimed simply by closing your credit account with a $0 balance.
Personal Loans: 550-600 Credit Score
While credit cards may be the easiest type of credit product to get with a low credit score, the limits you’ll be offered on an unsecured credit card with a score of 550 to 600 are likely to be only a few hundred dollars.
Personal loans can be an alternative for situations in which you need more financing than a credit card can give you.
Installment loans are ideal for larger financing projects that you’ll need to repay over a few months or years, while short-term cash advance loans are expensive but easy to obtain.
Personal installment loans are likely to have higher rates and fees the lower your credit score is, so be sure to shop around to find the best deal. A simple way to compare multiple offers without having to fill out dozens of applications is to use an online lending network.
With a large partner network, BadCreditLoans.com can connect you with lenders from around the country to help you find a lender with flexible credit requirements. Qualified borrowers can find loans of up to $5,000 with terms of up to 60 months in length.
- 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
As a lending network, BadCreditLoans.com can connect you with multiple lenders, but BadCreditLoans.com isn’t a lender itself. You won’t get any financing from the lending network or even deal with them after you’ve selected a loan offer.
Instead, choosing an offer means you’ll be redirected to the lender’s website to see the official loan agreement and complete the loan process. The individual lender will be responsible for dispersing your funds and will also be the one to whom you make your payments.
Although personal installment loans are much more affordable than short-term cash advance loans, short-term loans may be easier to obtain for some borrowers, especially those with a recent bankruptcy discharge on their credit reports.
If you choose to obtain a short-term cash advance loan, be sure to shop around for the lowest fees possible to avoid some of the expense. An online lending network, like MoneyMutual.com, can connect you with dozens of potential lenders to help you compare your options.
- 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 2,000,000 customers
- Not available in NY
Short-term cash advance loans through MoneyMutual.com can be available in amounts of up to $2,500 and with loan terms of up to six months.
Unlike installment loans, short-term loans are repaid in a single lump sum on the due date. You’ll be required to repay the full principal — the borrowed amount — plus all finance charges and any other applicable fees all at one time.
If you’re unsure of your ability to repay a short-term loan, try an installment loan instead (or use a credit card, if possible). Failure to repay a short-term loan in full and on time can result in very costly late fees and additional finance charges.
Auto Loan: 550-600 Credit Score
While auto loans are a type of installment loan, they vary from personal loans in a few key ways, the most dominant of which is that auto loans can only be used to purchase a vehicle.
Additionally, auto loans are secured loans — as opposed to unsecured personal loans — in which the financed vehicle acts as collateral for the loan.
Although this can make auto loans less risky for the lender and, thus, a little easier to get approved for than some unsecured loans, it also means that your vehicle could be repossessed by the lender if you default on your loan.
7. Auto Credit Express
A variety of banks, credit unions, and other third-party lenders will offer auto loans, but a credit score below 600 may make it harder to find a direct lender willing to accommodate your credit profile. Dealers, on the other hand, often have more flexible credit requirements, if higher rates.
One of the easiest ways to find a flexible dealer near you is to use Auto Credit Express. An online dealer network, Auto Credit Express has dozens of dealer partners around the country and may help connect you with a nearby dealer that matches your criteria.
- 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
Finding a dealer through Auto Credit Express requires a quick online application. There are no specific minimum credit score requirements, but you will need a monthly income of $1,500 or more to qualify for financing through an Auto Credit Express dealer.
If you find a dealer through Auto Credit Express, you’ll be contacted by a dealer representative to set up a visit to the dealership. You’ll work with the individual dealer to find a vehicle and to complete the loan process.
Home Loan: 550-600 Credit Score
While secured loans are generally easier to obtain than unsecured loans, the sheer size and term duration of home mortgage loans make them some of the most difficult loans to obtain with a low credit score.
The very best way to improve your chances of being approved for a mortgage with a 550 to 600 credit score is to save up as much of a down payment as possible, with 20% of the purchase price being your goal.
Even if you can’t reach 20%, you’ll need at least 10% to qualify for an FHA loan if your credit score is below 580, and at least 3.5% to qualify if your score is 580 or above.
In addition to a solid down payment, the key to finding a home loan with a sub-600 credit score is to shop around. With dozens of lending partners, online lending networks, like LendingTree.com, can be a simple way to get quotes from multiple lenders without going from bank to bank.
You can use LendingTree.com to find both conventional and FHA lenders for new purchases, mortgage refinancing, home equity loans, and reverse mortgage loans. Qualified applicants can receive up to five offers for easy comparison shopping.
- 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
Finding a lender with flexible credit requirements is only the tip of the iceberg when it comes to purchasing a home. Depending on the type of loan you obtain, you’ll likely need to go through a home inspection to ensure the safety of the property.
You’ll also likely need a home appraisal so the lender can verify that the property has a value equal to or greater than the loan amount. If the property fails either evaluation, your loan will likely be withdrawn and you’ll need to start the search over again.
You Have Options for Rebuilding Your Credit
Building credit is a slow process that takes months. Simply becoming eligible for a credit score takes at least six months of credit history, and building a great credit score can take significantly longer (especially if you hit a bump or two along the way).
But as much work as building credit can take, it’s well worth it in how much easier it is to qualify for new credit — and how much more affordable that credit will be.
Even with a low credit score, however, you can still find financing options to help you build credit and cover financial emergencies. With diligence and responsible use of that financing, you can help boost your credit score and improve your financial future.
Range of credit scores covered in this article: 550, 551, 552, 553, 554, 555, 556, 557, 558, 559, 560, 561, 562, 563, 564, 565, 566, 567, 568, 569, 570, 571, 572, 573, 574, 575, 576, 577, 578, 579, 580, 581, 582, 583, 584, 585, 586, 587, 588, 589, 590, 591, 592, 593, 594, 595, 596, 597, 598, 599, 600