What Can You Get Approved For With a 585 Credit Score?

With a 585 credit score, you can likely get approved for a secured credit card, an auto loan, a credit union loan, or an FHA mortgage with 3.5% down. Unsecured cards built for fair credit and personal loans from banks and online lenders are possible, though not every lender will approve you. You'll pay more for all of these, because your score sets your rate. At 585, you're 16 points from Experian's near prime auto tier at 601 and 85 points from good credit.

Is 585 a poor credit score?

No. FICO's fair range runs from 580 to 669, so 585 sits near the bottom of it, 5 points above the 580 cutoff. At 670, you'd move into good credit.

A score in this range usually means your credit report shows one or more of these issues:

• Late payments. A payment 30 days or more late 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 585 score, but some set their minimums higher, so approval isn't automatic. When you are approved, expect higher rates, lower limits, 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 585 credit score?

At 585, more products are open than in the poor range, but some lenders will still turn you down. Knowing which products are realistic can save you an application.

Credit cards

Some unsecured cards designed for fair credit will approve a 585 score, but not every issuer will. Expect a low limit and a high APR. 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 gets you a $500 limit, for example. You generally get it back if you close the account in good standing or are graduated to an unsecured card with steady on-time payments.

Personal loans

A personal loan is possible at 585, especially from a credit union, but 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, with application fees capped at $20 and rates capped at 28%.

Online lenders and banks that work with fair credit are another option. 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 585 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. That lowers the lender's risk, but it also means falling behind puts your car at risk.

A 585 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.

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

Mortgages

With a 585 credit score, an FHA loan is the most realistic mortgage. Other types depend more on the lender, and costs vary by type:

• FHA loans. Borrowers with scores of 580 or higher can qualify with 3.5% down. On a $250,000 home, that's $8,750 up front. Below 580, the minimum rises to 10% down, or $25,000, so at 585 you have only 5 points of room. Each lender can set higher minimums.
• Conventional loans. Fannie Mae no longer sets a minimum score for loans run through its automated system, but lenders still set their own, so approval at 585 depends on the lender. Fannie Mae does charge 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, and you'd pay it through a higher rate or more cash at closing. The next fee band starts at 640, where the fee drops to 2.25%, or $1,000 less on the same loan.
• USDA loans. These 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 585, you're below that range.

A lender can show you an FHA and a conventional quote side by side. Our mortgage calculator can help you compare the monthly payments.

What interest rates can you expect with a 585 credit score?

Expect rates toward the high end of the range a lender offers. In its G.19 release, the Federal Reserve reported an average of 22.15% for card accounts charging interest and 11.86% for 24-month bank personal loans. Those averages cover borrowers at every credit level. With a 585 score, your offers are likely to come in above them.

The rate applies to the whole balance, so even a few percentage points add up. If you can wait to borrow, 16 more points would put you in Experian's near prime auto tier at 601.

5 ways to raise a 585 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 any 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.
4. Pay down card balances. Using less of your available credit can raise your score as soon as your issuer reports the lower balance, which makes it a fast way to close a small gap.
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 585, you're in fair credit, and FHA mortgages with 3.5% down, auto loans, and credit union loans are all realistic. What your score decides now is mostly the price. In Experian's tiers, 16 more points moves you from subprime to near prime at 601, and 85 points gets you to good credit in FICO's ranges. Staying above 580 keeps FHA's 3.5% down within reach.

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.