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Most lenders consider a 524-credit score a bad credit score, but does that mean you can’t get any new loans? Will your credit score ever change?
Let’s take a closer look at a 524-credit score and see how it affects your life.
How Bad is a 524 Credit Score?
Credit scores range from 300 – 850, and a 524-credit score is ‘bad’ or, in the credit bureau’s terms, ‘very poor.’
It’s difficult to get any lender to do business with you when you have a credit score in the very poor range. If you can get a credit card or small personal loan, you’ll usually pay the highest APRs and pay fees or even have to put money down as a security deposit.
Fortunately, credit scores are constantly changing, so there are ways you can improve your 524-credit score.
Tips to Improve Your 524 Credit Score
#1. Review Your Credit Report
Before you can fix your 524-credit score, you must know what’s on your credit report. Everyone gets free access to their credit report once a year (from all three bureaus). Pull your reports and see what’s reported and what could bring your credit score down so much.
#2. Dispute Inaccurate Information
As you go through the credit report, first look for any incorrect information. This could mean an account or payment reported incorrectly or fraudulent information from a hacker or thief. Any incorrect information, dispute with the credit bureau reporting the information.
It’s best to send the dispute in writing in the mail. Send it via certified mail with the return receipt requested, so you have proof they received it. The credit bureau has 30 days to respond.
>> More: How to Dispute Errors on Your Credit Report
#3. Consider a Credit Repair Company
If you have a lot of mistakes, fraudulent information, or ‘bad’ credit on your credit report, hiring a credit repair company may help.
A credit repair company can dispute and negotiate on your behalf, helping you improve your credit score faster than doing it yourself.
Credit Saint is a reputable firm that has helped thousands of Americans repair their credit. Offering a 90-day money-back guarantee and great customer service, this company will help you take clear next steps.
#4. Form Good Credit Habits
Your credit score changes every month. If you form good credit habits, you can slowly increase your credit score over time. It won’t happen overnight, but consistent good credit habits help your score go up. Good credit habits mean paying your bills on time, keeping your credit balances at less than 30% of the credit line, and not opening new credit unless it’s necessary.
>> More: How to Build Credit
#5. Apply for a Secured Credit
If you can’t get unsecured credit, consider secured credit while you build your credit score. Secured credit requires you to make a security deposit that also serves as your credit line. If you don’t make your payments, the credit card company will keep your security deposit.
If you make your payments, though, it helps you build credit, and many secured credit card companies will convert your account to an unsecured card after 6 – 12 months of on-time payments.
#6. Credit Builder Loans
A credit builder loan isn’t a loan, but it acts like one. You don’t receive the money from the ‘loan.’ It goes in a bank account and earns interest, but you make payments on the loan to build credit. The lender reports the payments to the credit bureau to help you build credit. Once you complete all payments, you receive the money from the loan.
What Impacts Your 524 Credit Score?
Public Information
Collections,bankruptcies, and judgments hurt your credit score. They are all defaults and show you can’t manage your credit responsibly.
If you have any public records on your credit, it helps to get them removed as fast as possible.
Late Payments
Your payment history makes up the largest part of your credit score. One late payment (over 30 days late) can hurt your credit score tremendously.
Try avoiding any late payments and if you miss a payment, get back on track as fast as you can.
>> More: How to Remove Late Payments from Credit Report
Missed Payments
Missed payments hurt your credit even more than late payments. Most creditors charge off defaulted loans that are 90 – 180 days late.
A charge-off hurts your credit score and makes future lenders not want to take a chance.
Credit Utilization Rate
Your credit utilization rateis the amount of credit you have outstanding compared to your credit line. If you charge over 30% of your credit line, it can hurt your credit score.
>> More: How to Lower Your Credit Utilization Rate
Credit Mix
The credit score algorithm likes it when consumers have a mix of revolving debt (credit cards), installment debt (car loans and personal loans), and mortgage debt.
Learn More:How to Repair Your Credit on Your Own
Recent Credit Activity
Too much recent activity could be a sign that you’re ‘desperate’ for money. Lenders don’t like to see too many inquiries or new loans in a short period.
>> More: What Affects Your Credit Score?
What Loans Can You Get with a 524 Credit Score?
It’s hard to find any loan with a 524-credit score. Lenders look at your payment history, credit utilization rate, and outstanding debts.
But even with a timely payment history and no debts outstanding, a 524-credit score speaks for itself.
If you do get a loan, it will likely be a secured credit card or personal loan with an APR as high as 35.99% and an origination fee of as much as 5% of the loan amount.
Can I Buy a House with a 524 Credit Score?
Buying a house with a 524-credit score is hard. The only loan that you may stand a chance with is an FHA loan, but you’ll need a 10% down payment to use the program.
There may be subprime loan options too, but those come with much higher interest rates and outrageous fees.
>> More: How to Buy a House with Bad Credit
Can You Get a Car with a 524 Credit Score?
You may have an easier time get a car loan over a mortgage, but you’ll need a large down payment, and you’ll likely pay high-interest rates to get the loan.
>> More: What Credit Score is Needed to Buy a Car?
Bottom Line: 524 Credit Score
If you have a 524-credit score, do what you can to increase it. Steady good credit habits and disputing your credit are the best ways to improve your 524-credit score.
If you need help, consider hiring a credit repair agency for a few months to give you a head start on fixing your credit.
