A 'bad' credit score is anything below 580 on the FICO scale — the cutoff most lenders use to flag an applicant as high-risk. Below that line, you'll be denied for most major credit cards, charged sky-high interest rates on auto loans, and asked for hefty deposits on utilities and rentals.
The good news: bad credit is not permanent. Even severely damaged credit can rebuild to 'good' (670+) within 18–24 months with the right strategy.
What counts as a bad credit score?
FICO is the model used by 90% of top US lenders. VantageScore uses the same 300–850 range with slightly different cutoffs (500–600 = poor).
- 300–579 — Poor (commonly called 'bad credit')
- 580–669 — Fair (subprime — better, but still costly)
- 670+ — Good and above (prime borrower territory)
What causes a bad credit score?
- Late or missed payments — 35% of your score
- High credit utilization (carrying big balances) — 30%
- Collections, charge-offs, repossessions, or foreclosure
- Bankruptcy (Chapter 7 stays 10 years; Chapter 13 stays 7)
- Too many recent hard inquiries
- A 'thin file' — too little credit history to score reliably
The real-world cost of bad credit
Bad credit doesn't just block loans — it makes everyday life more expensive. The Federal Reserve estimates the lifetime cost of poor credit at roughly $45,000 for an average household.
- Mortgage — up to 3 extra percentage points = $90,000+ over 30 years
- Auto loan — APR often 18–22% instead of 4–6%
- Credit cards — 29.99% penalty APR, low limits, annual fees
- Auto and home insurance — higher premiums in most states
- Apartments — denied applications or 2x security deposits
- Utilities — required deposits for power, gas, and internet
Why lenders care so much
Your score is a statistical prediction of default risk. A 580 borrower is roughly 8x more likely to default in the next 24 months than a 740 borrower, according to FICO data.
How to rebuild bad credit
- Pull all three reports and dispute every inaccurate negative item
- Bring all currently-open accounts current (stop the bleeding)
- Get a secured credit card and use less than 10% of the limit
- Add a credit-builder loan from a credit union
- Become an authorized user on a family member's well-aged card
- Negotiate pay-for-delete on any open collections
- Set autopay so no future payment is ever missed
How long does it take to fix bad credit?
There's no instant fix, but the trajectory can move fast. Most members starting in the 500s see their first 40–80 point gains within 60–90 days as inaccurate items come off and utilization drops.
Getting back to 'good' (670+) typically takes 12–24 months of consistent on-time payments and low utilization. Bankruptcies and foreclosures need longer — but every month brings the recovery closer.
Frequently asked
Can I get a credit card with bad credit?+
Yes — secured cards are designed for this. You put down a refundable deposit (usually $200–$500) that becomes your credit limit. Use it lightly, pay in full, and your score climbs.
Should I close old accounts when rebuilding?+
No. Closing accounts shortens your credit history and raises your utilization ratio — both hurt your score. Keep old cards open with small recurring charges.
Will paying off collections instantly fix my score?+
Not always. Under older FICO models, a paid collection still hurts. Newer models (FICO 9, FICO 10, VantageScore 4) ignore paid collections — but many lenders still use older versions.
Get expert help
Have a specialist fight for your credit.
Apex Credit files disputes, tracks responses, and negotiates with creditors on your behalf — so you can stop reading guides and start seeing results.
