What Can You Get Approved For With a 580 Credit Score?

With a 580 credit score, you can likely get approved for a secured credit card, an auto loan, a personal loan from a credit union, or an FHA mortgage with 3.5% down. Some unsecured cards for fair credit may approve you too. You'll pay more than borrowers with higher scores, because your score sets your rate.

At 580, you've just reached fair credit, and you're 21 points from Experian's near prime auto tier. Slipping below 580 would put you back in poor credit and raise the FHA down payment to 10%.

Is 580 a poor credit score?

No. FICO's fair range runs from 580 to 669, so 580 sits at the very bottom of it. At 579, you'd be in poor credit. At 670, you'd move into good credit.

A score this close to poor usually means your credit report shows one or more of these issues:

• Missed payments. A payment 30 days late gets reported and stays on your report for seven years. Its effect on your score shrinks as it ages, especially when newer on-time payments build behind it.
• Accounts in collections. This is a debt handed off to a collection agency, often a medical bill or an old card balance. A collection also stays for seven years, counted from the original delinquency.
• High card balances. Using a large share of your available credit lowers your score. Unlike a late payment, this changes as soon as your balances come down.

Many lenders will work with a 580 score, though approval isn't guaranteed. What changes is the terms, including higher rates, lower limits, bigger deposits, and, in some states, higher car insurance premiums than borrowers with good credit get.

Read more >> What Can You Get Approved For With a 620 Credit Score?

What can you get approved for with a 580 credit score?

More doors are open at 580 than in the poor range, but prices still run high. Knowing which products are reachable can save you an application.

Credit cards

Not every issuer will approve a 580 score for an unsecured card. Some cards designed for fair credit will, but expect a low limit, a high APR, and possibly fees. Before applying, check whether the issuer offers prequalification, which uses a soft credit check that doesn't harm your credit.

A secured credit card is your most likely approval. You put down a refundable deposit that usually becomes your credit limit. A $500 deposit, for example, gets you a $500 limit. The issuer holds the deposit while the account is open and keeps it if you don't pay.

You generally get the deposit back when you close the account in good standing, or when the issuer graduates you to an unsecured card after steady on-time payments.

Personal loans

A personal loan at 580 is harder to get than at a higher fair score, but it's a realistic option. Expect a smaller amount and a higher rate than a borrower with good credit would get.

Start with a credit union if you belong to one or can join. Federal credit unions can't charge more than 18% on most loans. Some also offer payday alternative loans (PALs) of up to $2,000, repaid over one to 12 months. Application fees are capped at $20, and rates are capped at 28%.

Online lenders that work with fair credit are another option, though their rates run higher. Compare offers using prequalification, so only the lender you choose runs a hard credit check. Any of these is cheaper than a payday loan, where a typical $15 fee per $100 borrowed works out to an APR of almost 400%.

Auto loans

Approval for a car loan at 580 is often easier than approval for a personal loan, because your car is the collateral: If you stop paying, the lender can take it back and sell it to cover the loan. That lowers the lender's risk, but it also means falling behind puts your car at risk.

A 580 score falls in Experian's subprime tier (501 to 600). Your credit score plays a major role in the interest rate you're offered on a car loan. On a $20,000, 60-month new car loan at average rates, a subprime borrower would pay about $5,300 more in interest than a super prime borrower, and about $4,300 more than a prime borrower. Experian sorts these tiers by VantageScore 4.0, so your FICO score may place you a little differently.

If banks and credit unions turn you down, buy here, pay here dealers finance cars themselves. They often require weekly or biweekly payments and charge much higher rates than traditional loans.

Use an auto loan calculator to check payment amounts before you sign.

Mortgages

A mortgage is within reach at 580, and FHA loans are the most realistic path. Borrowers with scores of 580 or higher can qualify with 3.5% down. On a $250,000 home, that's $8,750 up front. Each lender can set higher minimums.

Staying at 580 matters here. Scores from 500 to 579 need at least 10% down, or $25,000 on the same home.

A conventional mortgage is less likely. Fannie Mae no longer sets a minimum score for loans run through its automated system, but lenders still set their own minimums. Fannie Mae also charges lenders an upfront fee on the loans it buys, based on your score and down payment. At 20% down, the fee for scores of 639 and below is 2.75% of the loan amount, compared with 0.375% at 780 or higher. On a $200,000 loan, that's $5,500 versus $750, paid through a higher rate or more cash at closing. At 640, the fee drops to 2.25%, about $1,000 less on a $200,000 loan.

USDA loans are for homes in eligible rural and suburban areas with income limits. USDA doesn't set a minimum score, but lenders typically look for 620 to 640. At 580, you're 40 points short of the low end.

If you want to buy a home, keeping your score at 580 or higher and saving for a down payment work together. Our mortgage calculator can show what 3.5% down looks like in your price range.

What interest rates can you expect with a 580 credit score?

Expect rates toward the high end of the range a lender offers. The Federal Reserve's averages across all borrowers were 22.15% for card accounts charging interest and 11.86% for 24-month bank personal loans. With a 580 score, your offers are likely to be higher. For auto loans, Experian's subprime averages are 13.52% for new cars and 19.1% for used cars.

The rate applies to the whole balance, so a few points add up. If you can wait to borrow, 21 more points would move you from subprime to near prime in Experian's auto tiers.

5 ways to raise a 580 credit score

1. Check your credit reports for errors. You can get all three for free every week at AnnualCreditReport.com. If something is wrong, like an account that isn't yours or a late payment you made on time, dispute it with the bureau. Disputing is free.
2. Bring past-due accounts current, if you can. For accounts already in collections, it can be hard to know which to pay first. The National Foundation for Credit Counseling (NFCC) can connect you to free or low-cost counseling at 800-388-2227.
3. Pay every bill on time. Payment history is the biggest factor in your score, making up 35% of a FICO Score. At 580, one new late payment can drop you back into poor credit.
4. Pay down card balances. Using less of your available credit can raise your score as soon as your issuer reports the lower balance. That boost lasts only while the balances stay low.
5. Apply only when you need to. Each application can add a hard inquiry, which takes a few points off for about a year. Prequalify first where you can.

If your report is thin on accounts, adding one helps. A Kikoff Credit Account reports your payments to all three bureaus.

Read more >> How to Build Credit

Bottom line

At 580, you've reached fair credit and the FHA minimum for 3.5% down. Lenders are likely to approve you for more than they would in the poor range, but your score still sets a high price. Near prime auto rates in Experian's tiers start at 601, 21 points away, and good credit in FICO's ranges starts at 670.

Kikoff brings credit building, bill and rent reporting, AI-powered disputes, credit monitoring, and debt negotiation into one place. Sign up with no credit check. Plans start at $5 a month.