What Can You Get Approved For With a 604 Credit Score?

With a 604 credit score, you can likely get approved for an auto loan, an FHA mortgage with 3.5% down, and a credit card or personal loan designed for fair credit. Some lenders will still turn you down, and you'll pay more than borrowers with good credit, because your score sets your rate. At 604, you're 57 points from prime auto rates and 66 points from good credit.

Is 604 a poor credit score?

No. FICO's fair range runs from 580 to 669, so 604 sits in the lower half of it, 24 points above where fair credit starts. 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:

• An older late payment. 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.
• 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.
• A short or thin credit history. A thin credit file, meaning a report with only a few accounts or accounts that haven't been open long, gives scoring models less to go on.

Many lenders will work with a 604 score, though some set their minimums higher. What changes is the terms, including 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 604 credit score?

At 604, most types of credit are within reach, though prices run high. Knowing which products are realistic can save you an application.

Credit cards

Some unsecured cards designed for fair credit will approve a 604 score, but approval isn't guaranteed. Expect a modest limit and a higher APR than cards for good credit. Before applying, check whether the issuer offers prequalification, which uses a soft credit check that doesn't harm your credit.

If you're turned down, a secured credit card is a reliable option. With these cards, you put down a refundable deposit that usually becomes your credit limit. A $500 deposit, for example, gets you a $500 limit. 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 realistic at 604, but expect fewer offers 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 with 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 604 is usually easier than approval for a personal loan, because the loan is secured by the vehicle you're buying. 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 604 score falls in Experian's near prime tier (601 to 660), but only by 3 points. 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 near prime borrower would pay about $3,000 more in interest than a super prime borrower, and about $2,000 more than a prime borrower. Experian sorts these tiers by VantageScore 4.0, so your FICO score may place you a little differently.

Prime starts at 661, 57 points away. In the other direction, dropping below 601 would put you in Experian's subprime tier, where average rates run higher.

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

Mortgages

With a 604 credit score, a mortgage is within reach, but the type you choose changes both your odds and your costs:

• 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. 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 not every lender will approve one at 604. 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 2.25% at 640 to 659 and 0.375% at 780 or higher. On a $200,000 loan, that's $5,500 at 604 versus $750 at 780+. Reaching 640 would save $1,000. You'd pay the fee through a higher rate or more cash at closing.
• 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 604, you're 16 points below that range, so many lenders may say no for now.

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 604 credit score?

Expect rates above what borrowers with good credit get, often toward the high end of a lender's range. In its G.19 consumer credit release, the Federal Reserve put the average rate at 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 604 score, your offers are likely to come in above them.

The rate applies to the whole balance, so a few points add up. If you can wait to borrow, 57 more points would move you into the prime tier for auto loans, and 66 would get you to good credit.

5 ways to raise a 604 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. If you're juggling more than one, 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.
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, since prequalification uses a soft check.

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 604, many lenders will approve you, especially for auto loans and FHA mortgages. What your score mostly decides is the price. You're 57 points from prime auto rates and, in FICO's ranges, 66 points from good credit.

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.