A 585 Credit Score Is Poor
The simple fact is that a 585 credit score is poor by pretty much any standard measure. TransUnion, one of the three credit bureaus in the United States, categorizes a 585 credit score as “very poor”, as it falls into the lowest range of scores. With that said, there’s a good reason to be optimistic: there many steps that you can take to improve your score from this level.
Your credit score is easily one of the most important numbers in your financial life mainly because it determines your access to most forms of credit including credit cards, personal loans, and mortgages and, just as important, the terms and cost of credit. For this reason, it is important to monitor your credit frequently, to be proactive in resolving issues that arise that impact your credit score, and to ensure that you’re taking steps to steadily improve your credit score over time. In the following article we discuss what a 585 credit score functionally means, explain what a good credit score is and share some practical tips to help improve your score.
What a 585 Credit Score Means For You
A 585 credit score would be considered “Very Poor” according to TransUnion and is the lowest credit score category. A 600 credit score or lower is considered “Very Poor” while credit scores between 601 and 658 are considered “Poor” according to the VantageScore 3.0.
Therefore, an optimistic perspective would be that with a 585 credit score, you’re just 15 points away from moving up out of the lowest category. But it’s important to be realistic: a score this low is going to face several limitations including the number of lenders willing to provide you credit. The fact is that there is typically going to be an inverse relationship between your credit score and the interest rates lenders are willing to charge you.
Further, many lenders will have minimum credit scores and if you’re not above this threshold they automatically might decline providing you with a loan. Examples of this include Lending Club which has a minimum credit score of 600, SoFi which reportedly has a minimum credit score of 650 and Credible, which has minimum score requirement of 620.
What a 585 Credit Score Can Get You
As indicated earlier, most of the time there are no hard and fast rules when it comes to how lenders decide on approving applications for new credit. There are a number of factors that they will consider in addition to your credit score, including your monthly income. But in the sections below we have outlined what we believe is the most likely outcome based on our research on credit scores and lender criteria.
Can You Get a Credit Card with a 585 Credit Score?
Yes you can. You will be able to get approved for some credit cards with a credit score of 585, but these will most likely be non-traditional credit cards and secured credit cards.
Unsecured Credit Cards
You might have difficulty getting approved for most unsecured credit cards, which is the most popular type of credit card available in the country. The distinction between unsecured and secured credit cards is that with unsecured cards you don’t need to make a security deposit or post any form of collateral.
As a result, lenders are taking a bigger risk and so consumers with lower credit scores are viewed as riskier borrowers. Your best bet as far as unsecured credit cards goes might be non-traditional credit card options such as those issued by merchants (also known as “store cards”). This would be an alternative for consumers with low credit scores.
Examples of a merchant card would be the Lowe’s Advantage Card. Because these credit cards are issued and designed to encourage spending at the respective stores, there are additional considerations in their decision to approve a credit card application.
Secured Credit Cards
These cards are designed for consumers that have limited or poor credit histories. Because these cards are prepaid, cardholders can only spend amounts that have been pre-funded or “secured”. While this means that secured credit cards function very similarly to debit cards, they do have the added benefit of the payment information being reported to the credit reporting agencies and so these are great credit building tools. Several of the large banks offer secured credit cards including Capital One and Discover Bank.
Can You Get a Mortgage with a 585 Credit Score?
It is unlikely that you will be approved for a mortgage with a 585 credit score. The chart below shows the categorization of mortgage approvals in the United States by credit score and is based on data from 2016 to 2021 from the FHFA database.
What should be pretty clear is that the overwhelming majority of mortgage approvals are to people that have credit scores that are considered “good” or better.
For the two lowest categories, “poor” and “very poor” they represented only 3% of mortgage approvals over this 5 year period. Importantly, the lowest category represented just 0.1%. While getting a mortgage with a credit score this low is not impossible, the odds are against you.
Can You Get an Auto Loan with a 585 Credit Score?
The short answer is yes, most likely. You will still be able to get approved for an auto loan with this credit score. However, the terms will be less favorable and there will be a fewer number of lenders available. If you can improve your score up to the 660 credit score level, you’ll be in the category of “fair” which has many benefits including a much lower interest rate.
Can You Get a Personal Loan with a Credit Score of 585?
Yes – you will be able to get approved for personal loans, but the number of options will be more limited, and the rate charged will be higher, as discussed and shown earlier.
Can You Get an Apartment Lease with a 585 Credit Score?
It’s possible but unlikely. A study by RentCafe in 2020 found that the average credit score of renters in the United States was 638. However, this is of course just an average and so there were both consumers above and below this figure. It will be difficult to get approved for an apartment rental lease with a score this low. Some landlords might require you to have a co-signor or to submit a more significant security deposit.
Is 600 a Good Credit Score?
With a 585 credit score your sights should rightfully be set on increasing your score to the 600 threshold. That’s the logical next milestone. That said, 600 is still not considered a good credit score by most measures and is also well below 711, which is the average score in the U.S.
What is considered a Good Credit Score?
We consider a 750 credit score to be a good credit score. The answer to this question will vary depending on who you ask, but in our view a good credit score is high enough to allow you to get approved for most forms of credit extension.
With a 750 credit score not only are you comfortably above the average credit score in the United States, but when it comes to getting approved for a mortgage (the gold standard of credit approvals) your score places you above the median. This means that your odds of being approved for a mortgage with a 750 credit score are very good. With a 750 credit score you will also be eligible for most credit cards, personal loans and auto loans with attractive features and rates.
How Can You Improve Your Credit Score?
A 585 credit score is not a great score to have and so it’s important to start implementing strategies and habits that can help improve your credit score over time.
The following are steps you can take:
Get Copies of Your Credit Reports
The first step we’d recommend would be to obtain a copy of your credit reports from each of the credit bureaus (Experian, TransUnion and Equifax) and review them thoroughly to first ensure that all the information on the reports is accurate. It is very important to understand what happened that resulted in your score falling to this level. Every consumer is entitled by law to a free copy of their credit report from each of the three credit bureaus once a year. You can do this by visiting the Annual Free Credit Report.
If you notice that there are irregularities on your credit report, you can act by sending a letter to the relevant credit reporting company disputing the information. Viewing your credit reports will also provide you with an idea of what has impacted your score in the past such as late payments and delinquent accounts. You can find more information about disputing information on your credit reports here:
Prioritize Paying Your Bills On-time
Not making your payments on your outstanding credit or making late payments is an easy way to impact your credit score. Your payment history is responsible for 35% of your credit score and so having a poor payment history is one of the common causes of low credit scores.
A good practice that is easy to implement is to enroll in auto-pay for not just your credit repayments but other bills. Doing this at least helps you significantly lower the risk that you forget to make a payment and end up becoming delinquent.
Limit Opening New Accounts
One of the inputs the credit reporting agencies use in calculating your credit score is the length of your credit history. Therefore, each time you open a new account, the length of your history declines. The impact can be more significant if you open a large number of new accounts in a short period of time. This doesn’t mean that you should never open new accounts; rather, it is good practice to avoid opening multiple new accounts each year, especially if it’s just in the pursuit of rewards or cash bonuses.
Keep Credit Card Utilization Low
Another input the credit bureaus use in calculating your credit score is to look at the total amounts owed on revolving credit, such as credit cards, relative to the allowable limits on the credit cards. Keeping credit cards fully maxed out is not only financially imprudent but it has a negative impact on your overall credit score.
Ideally, it is good practice to pay off your credit card balance each payment cycle. More practically, prioritize keeping your revolving credit well below the limits.
Take Advantage of Credit Building Tools
Having a 585 credit score limits your options for new loans but at the same time, you need opportunities to demonstrate to lenders that you are creditworthy. This is where credit building tools can be very valuable. These tools exist specifically to allow consumers with limited or poor credit histories to start rebuilding their credit. A common tool is a secured credit card.
These cards are offered by many banks, do not require a credit check for approval in most cases, and are an effective way of re-establishing credit worthiness.
Monitor Your Credit Reports Closely
Finally, it is a good idea to pay close attention to your credit scores. Checking your credit reports once a year should be the minimum frequency as while the information might not change every day, over the course of a year a lot can change.
Monitoring your credit reports monthly (what we would recommend) allows you to keep track of the progress you’re making in improving your credit scores and enables you to be proactive in the event that an issue arises. There are a host of free credit monitoring tools including Credit Karma and Credit Wise.
While a 585 credit score is considered very poor, by implementing some of the best practices we outlined above you can start to see an improvement in your credit score in a matter of months. But you should view your credit score and credit history over a longer time frame and plan to develop habits that you can sustain over the long run. Your score is also on the threshold of the next highest category and moving up will significantly increase the number of lenders that are willing to provide credit to you as well as the rates and terms they offer.