Why a 600 Credit Score Is Not Cataclysmic

Bad things sometimes happen to good people.

In spite of your best intentions, you can find yourself in financial distress. This could be because of the loss of your job, an unexpected expense such as a high medical bill or because of bad spending habits, and it can cause your credit score to fall considerably.

Many people think that if their credit score falls into the low 600s, it is the end of the world and that their life will never be the same. In this article, though, we will show you why this is not true.

You Can Get a Credit Card Even If You Have a Credit Score of 600

If your credit score is around 600, you might think that you will not qualify for that credit card you need. But while you will likely not qualify for cards offering the best interest rates and features, there are a surprisingly large number of quality credit cards from top issuers that you can get. Many of these cards offer high-end features, such as:

  • No annual fees and/or foreign transaction fees
  • Cash rewards for purchases
  • Access to higher amounts of credit after making payments on-time for a short period of time
  • No rejections for past bankruptcies

See here for more details.

You Can Rebuild Your Credit Score

A bad credit score is not a scarlet letter that you will have to wear for the rest of your life. You can rebuild it, and the good news is that, if your credit score is 600, you are only 69 points from having a good credit score. Here are some of the best ways to do this:

1. Make Payments on Time

The most important thing that you can do to repair your credit score is to not only pay your bills but do this on time. To help with this, set up automatic payments if possible. If this is not possible, set up reminders on your phone to regularly warn you when payments are due.

2. Pay Down Credit Cards with More than 50% Credit Utilization

Not all credit card debt is the same. If the balance on one or more of your credit cards is more than 50% of your available credit, these accounts are weighing down your credit score more than others. To improve your score, pay down the balances of these cards before you pay down the balances of cards that have less utilization.

3. Limit New Credit

Opening (or even applying for) new credit card accounts can adversely affect your credit score. So, limit the opening of new accounts to no more than what you absolutely need.

4. Hire a Credit Counselor

A certified credit counselor can help you repair your credit score by setting up what is called a debt management plan. With this, you deposit money on a monthly basis with the counselor, who then pays your bills based on a plan that they have negotiated with your creditors. These plans can result in the lowering of interest rates and the waiving of certain fees, which can help you pay off your debts faster and raise your credit score.

5. Consider Debt Consolidation

A debt consolidation loan can reduce the amount of interest that you pay every month by combining all your debt into one single payment. Like with a debt management plan, this will allow you to pay off your debts faster and improve your credit score.

In conclusion, having a credit score of 600 is not as cataclysmic as you may have thought. The opportunities for you to improve your financial well-being are out there and within your reach.