What Score Counts as Bad Credit?
Credit scores range from 300 to 850. The exact definitions vary slightly between scoring models, but generally, a FICO score below 580 is considered "poor" or "bad" credit. Scores between 580 and 669 are "fair," which is better but still below average.
If your score falls in the poor range, it signals to lenders that you have had trouble managing credit in the past. This could be due to missed payments, high balances, accounts in collections, or other negative marks on your credit report.
How Bad Credit Affects Your Daily Life
Bad credit reaches further than most people expect. Here are the biggest ways it can impact you:
Higher interest rates. If you do get approved for a loan or credit card, you will likely pay a much higher interest rate. On a car loan, the difference between a good and bad credit rate can add thousands of dollars over the life of the loan.
Difficulty getting approved. Many lenders, landlords, and even utility companies check your credit. Bad credit can lead to denied applications for apartments, loans, and credit cards. You may need a cosigner or larger deposits.
Limited credit card options. With bad credit, your choices are usually limited to secured credit cards or cards with high fees and low limits. Rewards cards and premium cards are typically out of reach.
Higher insurance costs. In many states, auto and home insurance companies factor in your credit-based insurance score. Bad credit often means higher monthly premiums.
Employment challenges. Some employers check credit reports during the hiring process, particularly for jobs in finance or government. While they see your report (not your score), negative items can raise concerns.
What Causes Bad Credit?
Bad credit usually results from one or more of these factors:
Late or missed payments are the most common cause. Payment history makes up about 35% of your FICO score, so even one missed payment can cause a significant drop.
High credit utilization means you are using a large percentage of your available credit. Keeping balances above 30% of your limit hurts your score.
Accounts in collections, bankruptcies, foreclosures, and charge-offs are severe negative marks that can drag your score down for years.
Having no credit history at all can also result in a low score. If you are new to credit, you may not have enough data for a good score yet.
First Steps to Fix Bad Credit
Repairing bad credit takes time, but the process is straightforward. Start by pulling your free credit reports from AnnualCreditReport.com and checking for errors. Dispute anything that looks wrong.
Then focus on the basics: pay every bill on time, pay down existing balances, and avoid opening unnecessary new accounts. A credit builder card or secured credit card can help you add positive payment history to your report.
Be patient. Most negative items fall off your credit report after seven years, and your score will improve steadily as you build positive habits.
Frequently Asked Questions
What is the exact FICO score range for bad credit? FICO scores below 580 are classified as "poor" or "bad." Scores between 580 and 669 are "fair." Most lenders use these cutoffs to determine approval odds and interest rates.
How long does bad credit last on your credit report? Most negative marks — late payments, collections, charge-offs — stay on your credit report for seven years. Bankruptcy can remain for up to 10 years. Their impact on your score fades significantly over time.
Can I get a credit card with bad credit? Yes. Secured credit cards are specifically designed for people with poor or no credit. They require a refundable deposit and are one of the best tools for rebuilding credit systematically.
How fast can I improve a bad credit score? Some people see improvements within 30 to 60 days after disputing errors or paying down balances. Moving from poor to fair credit typically takes 6 to 12 months of consistent positive habits.
Does bad credit affect my ability to rent an apartment? Yes. Most landlords check credit during the application process. With bad credit, you may face higher security deposits, need a cosigner, or be denied entirely.
The Bottom Line
Bad credit means a score below 580, and it affects your ability to borrow, rent, and even get certain jobs. But it is not permanent. With consistent payments and smart credit habits, you can move from bad credit to good credit over time.
Learn more about building credit with Firstcard.
