Is 520 a Good Credit Score?

By Melissa Brock

A credit score of 520 is considered poor and is far below the average American’s credit score of 715. You may find it a challenge to get approved for a loan or credit card with that score. However, it’s important to know that a poor credit score isn’t permanent — you can raise it.

Read on for more information about what a 520 credit score means, how it impacts your chances of getting loans and credit cards, and ways to build your score.

What Does a 520 Credit Score Mean?

Before we dive into whether 520 is a good or bad credit score, it’s important to understand what a credit score is. This three-digit number communicates to lenders how well you’ve used debt in the past and how likely you are to repay a loan on time. Your score is calculated based on data found in your credit reports, which are created by the three major credit bureaus: Experian, Equifax, and TransUnion.

Certain pieces of information on your credit report carry more weight than others when it comes to your credit score. The information that affects your score typically includes:

•   Your payment history

•   Outstanding balances

•   Length of your credit history

•   Applications for new credit accounts

•   Your credit mix

A credit score is categorized from poor to excellent, and credit score ranges vary depending on the scoring model used. In this article, we’ll focus on FICO®, which is used in 90% of lending decisions. FICO Scores are as follows:

•   300-579: Poor

•   580-669: Fair

•   670-739: Good

•   740-799: Very good

•   800-850: Excellent

As you can see, a 520 credit score is considered a bad credit score, and it falls into the lowest range.

If you want to repair your credit profile, a good place to start is to check your credit score. You can ask your bank, Experian, credit card company or lender, or a credit counselor if you can view your score at no charge. You may also have access to this information if you have a money management app.

Recommended: FICO Score vs. Credit Score: What’s the Difference?

How to Build Your Credit Score

Building up your credit score takes time, but it can help ensure you’ll pay less in borrowing costs. Here are some actions you can take:

•   Make on-time payments: Making timely payments consistently is one of the most important ways to boost your score.

•   Avoid applying for multiple credit cards or loans in a short time frame: Every time you apply for credit, your lender will run a hard inquiry. Each inquiry dings your credit score by a few points, but the dip is temporary. Instead, ask your lender if they offer prequalification. It typically requires a soft credit check, but that won’t impact your score.

•   Pay down revolving account balances: Be mindful of how much of your available credit you’re using, also referred to as your utilization rate. A good rule of thumb is to try to keep your rate below 30%.

•   Don’t close old accounts: Closing older, more established credit cards can hurt your credit score, so consider keeping those accounts open — even after you pay off your debts.

•   Diversify credit: Managing different types of credit, such as a student loan, auto loan, or mortgage, can take your credit score up a notch. But don’t take on more credit just to build it, especially if you have a low credit score.

•   Dispute inaccuracies: Check your credit report regularly and look for inaccuracies. If you find an error, dispute it.

•   Become an authorized user: A family member or other loved one can add you as an authorized user on their credit card to boost your score. Note that the account should have a history of on-time payments and a low credit utilization rate.

What Else Can You Get with a 520 Credit Score?

Yes, a credit score of 520 isn’t great. But will it prevent you from qualifying for credit cards, auto loans, mortgages, and personal loans? Let’s dive in.

Can I Get a Credit Card with a 520 Credit Score?

The good news: There’s no minimum score required to get a credit card. The not-so-good news: With a 520 credit score, you may have to pay higher-than-average rates and fees in order to qualify. Another option is to put down a deposit to obtain your card.

“Putting down a deposit” means you get a secured credit card. The deposit is usually equal to your credit limit, and it acts as collateral when you make a purchase. The lender can take your deposit if you fail to make your payments on time or if you default on your loan.

After successfully using a secured credit card, you ​​may eventually graduate to an unsecured credit card that doesn’t require a deposit. They’re more difficult to qualify for than secured cards, and credit card companies screen applicants more heavily to ensure you’ll be a good borrower.

Once you’re able to boost your credit score, you may be able to qualify for a credit card consolidation loan. (Lenders generally want borrowers to have a score of 670 or higher, but there’s no minimum score to get approved.) These types of loans can be useful if you want to streamline bill paying and work on paying down balances on high-interest credit cards.

Can I Get an Auto Loan with a 520 Credit Score?

Is a 520 credit score car loan possible? Maybe. According to Experian data from 2024, just 14% of borrowers with a subprime score (501-600 credit score) qualified for an auto loan.

Typically, you need a 600 credit score to get a traditional auto loan, though you could find lenders that offer bad credit auto loans. However, you may pay more in interest over time for your auto loan with a lower credit score. The average average annual percentage rate (APR) for borrowers with a 520 credit score is 13.00%, per Experian. Those with a credit score of 781 and higher had an average APR of 5.08%.

With a credit score of 520, you might find it easier to get a car loan if you add a cosigner. While you both are responsible for paying back the loan, the cosigner doesn’t own your car.

Recommended: What Is the Responsibility of a Cosigner on a Loan?

Can I Get a Mortgage with a 520 Credit Score?

While lending criteria varies by lender, most prefer that borrowers have a 620 credit score or higher. That said, the type of loan you’re seeking also plays a role.

•   Conventional loan: A conventional loan is not backed by the federal government, and you typically need to have a 620 or 660 credit score to qualify for a one.

•   FHA loan: This type of mortgage loan is backed by the Federal Housing Administration, meaning that it insures mortgages for single and multifamily homes. You can qualify for an FHA loan with a credit score as low as 500 as long as you have a 10% down payment. Otherwise, the minimum is generally a credit score of 580 and a 3.5% down payment.

•   VA loan: These mortgages are backed by the Veterans Administration (VA), a government agency. The VA guarantees a portion of the loan, which enables you to receive a more favorable interest rate. There’s no official credit score minimum requirement, but lenders generally want to see a credit score that’s at least in the 620-640 range.

•   USDA loans: In order to qualify for these loans, borrowers must meet certain requirements. There’s no official credit score minimum requirement, but lenders generally prefer borrowers to have a minimum 640 credit score.

Talk to your bank or credit union to learn more about how to qualify for a mortgage loan and learn more about the average credit score to buy a house.

Can I Get a Personal Loan with a 520 Credit Score?

Personal loans are usually installment loans that come from banks, credit unions, and private lenders that you repay in equal monthly payments until you fully pay off your loan. You may use your personal loan for medical bills, home or car repairs, or other large expenses.

Many lenders require you to have a minimum credit score of 600-640 to qualify for a personal loan, but you may find personal loans with a 520 credit score. However, in those cases, you’ll likely pay a higher interest rate. Use our personal loan calculator to determine how much your monthly payments would be based on the loan amount you’re seeking and the terms and rates you’re offered.

The Takeaway

Is a 520 credit score bad? Unfortunately, it falls in the “poor” category. However, you still may be able to qualify for certain loans and credit cards, though you may not qualify for the best terms. If possible, focus on building your credit score by making on-time payments, keeping your utilization rate below 30%, and leaving older accounts open. Doing so can help boost your score and increase the odds you’re approved for a credit card or loan.

Think twice before turning to high-interest credit cards. Consider a SoFi personal loan instead. SoFi offers competitive fixed rates and same-day funding. Checking your rate takes just a minute.

SoFi’s Personal Loan was named NerdWallet’s 2024 winner for Best Personal Loan overall.

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