Though credit scores are expressed as a single number, they’re actually a combination of multiple financial, credit-determining factors. These factors together indicate a potential borrower’s creditworthiness, affecting whether or not that borrower can secure a personal or property loan, credit card or new line of credit for virtually any purpose.
Just as easily as a great credit score can pave your way toward low interest rates and high credit acceptance, low credit scores can make it difficult, even close to impossible, to secure the loan, mortgage or credit card you’re looking for.
If you’re unsure where your credit score currently stands, look into free credit reporting programs like safe-for-use AnnualCreditReport.com to stay up to date on your most recent credit improvements and fluctuations.
According to Experian, a credit reporting agency which classifies credit scores from “Very Poor” to “Exceptional/Excellent,” your credit score of 590 officially rates as “Fair.” While you have avoided the lowest statistical credit ranking, a credit score of 590 could still benefit from improvement.
To avoid further regression to a Very Poor score, and promote credit score increases in upcoming months, let’s review potential causes for a credit score of 590.
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Why Your Credit Score Is 590
While there’s no way to identify which exact factors determine your credit score of 590, common elements like unpaid debts, defaulted loans, and payment history typically influence a Fair credit score. Remember that successive, on-time payments can help improve your credit score toward a “Good” ranking.
Unpaid Debts or Defaulted Loans
One of the biggest signs of a poor credit score is the accumulation of unpaid debts against your account. In fact, the largest contributing factor to a credit score, low or high, is payment history; 35% of your credit history is strictly tied to payment regularity.
Your payment history reflects how consistently you make complete payments toward your balances. The solution to unpaid debts is a simple one, but it’s often difficult to fully achieve: pay your debts. Prioritize debts owed to collections agencies, or credit that is currently accruing especially high levels of interest.
If you have failed to pay back a debt, your loan may have defaulted. Note that one or more missed payments doesn’t automatically default a loan, even though you might now owe additional late fees on top of your original credit payments.
If you have been legally notified of a defaulted loan, consider debt consolidation or rehabilitation options to ease the financial burdens of immediate payment. And once the loan is paid off, request that the default be removed by your loan provider, and cite the full payment as justification.
Excessive Hard Inquiries
Whenever you are considered for a new line of credit — whether for an additional credit card, a mortgage or apartment loan, even for a low car insurance rate — your financial institution or potential lender may perform a hard inquiry.
This is typically a formality that entails a request from your lender for information on your financial past. After all, lenders want to assess borrower financial status before simply handing out loans.
Hard inquiries remain on your financial record for the span of one year. And while one or two hard inquiries during a calendar year are fairly natural, more than a few hard inquiries performed within the span of a few months signal to potential lenders that you’re seeking new credit at an unhealthy rate.
Excessive hard inquiries can also injure your overall credit score, driving it down further below 590.
In addition to paying back outstanding debts in a timely manner, keeping up with your regular, on-time payments is critical to improving your credit score of 590.
It sounds simple, but making complete payments before their deadlines indicates increased credit responsibility, and typically has a positive, parallel relationship with your overall credit score. As your account begins to exhibit more of the signs of a Good credit score, on-time payments will consistently become more of a routine.
If you’re worried about missing a payment, set payment reminders on your calendar or phone to ensure you take the time to complete payments manually. Or, you can set up automatic payments online so that credit balances are repaid automatically.
If you do elect to set up automatic payments through an online payment portal, make sure you have sufficient funding in your bank account before each month’s transaction clears.
The last thing you want is an insufficient balance in your account that leaves you unable to pay your regular statement, in addition to a likely fee for an overdraft.
What Can You Do With a 590 Credit Score?
With a credit score of 590, you might experience difficulty in securing a personal or property loan, apartment rental, or credit card.
Especially if your credit score includes multiple hard inquiries within the last 365 days, lenders will likely be hesitant to provide you the loans necessary for specific financial decisions. The loan and credit cards options available to you might come with especially high fees or lofty interest rates.
Let’s explore some of the options available to you with a credit score of 590.
- Incentive-based credit cards will be difficult to obtain with a credit score of 590, especially if you’re interested in the top rewards-based credit cards that can offer steep discounts on airline and hotel pricing, as well as impressive cash-back options.
- However, some credit card options that offer no annual fees might still be within your reach.
- Apartment rentals aren’t impossible to come by with a 590 credit score, but it’s not a given.
- Many apartment complexes understand that potential renters don’t have the benefit of a mortgage to boost their credit scores, which may work to your advantage.
- If you secure an apartment rental with your credit score, you might need to pay extra fees to compensate.
- Personal loans can be used for a wide variety of projects, everything from home renovations to dream weddings to emergency bills.
- Individuals with 590 credit scores will experience difficulty in securing personal loans from reputed financial institutions.
- If you’re looking to obtain a personal loan with your current credit, consider loan options for individuals with lower credit scores.
- Auto loans are possible with a 590 credit score, but landing a low monthly premium likely is not.
- If you’re interested in an auto loan, understand that it will likely result in another hard inquiry on your account, in addition to higher premiums paid on a monthly basis.
How to Repair a 590 Credit Score
Paying back collections agencies and addressing defaulted loans can go a long way toward repairing your credit score, obviously in tandem with continual on-time payments.
While avoiding additional hard inquiries against your account, try adopting more disciplined financial habits.
Stop spending hard-earned money on discretionary purchases; instead, dedicate an increased percentage of your wages each month specifically to paying down loans and debts, prioritizing payments to accounts that come with punishing interest rates.
If you’re serious about repairing your 590 credit score, professional credit repair agencies are likely the best possible place to start.
Many of the best credit repair companies have programs designed to help you resolve civil judgments and late payments, slowly but systematically laying the foundation for a successful, long-term credit repayment strategy.
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