A few short years ago, I had a credit score in the 550 range. A year before that, my score was below 500. I know what it’s like to operate with bad credit and as embarrassing as this is, I learned to cope and eventually improve my score.
Can You Get A Mortgage With 550 Credit?
Generally speaking, no, you cannot get a loan with credit in this range. The most widely available loan for people with less than perfect credit is the FHA loan. This loan only works if your credit score is above 580. Even at 580, the loan is pretty expensive and you have to meet extra criteria to qualify.
If you have a score in this range, you will need to improve it significantly.
Can You Buy A Car With 550 Credit?
Yes, in some situations you can buy a car with 550 credit. But, you definitely won’t be able to get a loan from a bank for a car with credit in this range. They are going to want to see a score that’s much higher than this.
On top of that, if your credit is in this range you’re going to find that the derogatory items on your credit report will cause additional problems. It’s likely that you have many late payments and possibly a repossession or bankruptcy. If this is the case for you, it will be difficult to get the approval for a loan.
Your only option in this situation is to buy a car from a dealer that specializes in loaning to individuals in your situation. That dealer is going to charge you extra interest and in all likelihood, extra for the car.
Can You Get Credit Cards With Credit In This Range?
Generally speaking, no, you won’t be able to get a credit card with credit in this range. That said, almost anyone can get a secured credit card so that’s where you’ll have to start. I would recommend opening two secured cards and paying them off in full, on-time every month. After a year or so you’ll definitely be able to get a regular, unsecured credit card.
How To Increase A 550 Credit Score
In order to improve credit, it’s always the same formula. You need to make on-time payments, reduce debt, increase credit lines, and use plenty of diversity in your credit profile. Additionally, it will help significantly to keep old lines of credit open.