Is 565 a Good Credit Score?

By Kevin Brouillard

YA 565 credit score is not good. According to FICO® (the most popular credit scoring model), a 565 credit score is considered “poor” and below the average of U.S. consumers. Borrowers with this credit score could have a difficult time qualifying for new loans and might not receive very favorable terms if approved.

Here’s what a 565 credit score means in practice when it comes to getting a credit card, mortgage, and other types of financing.

What Does a 565 Credit Score Mean?

A credit score is a three digit number that shows a borrower’s ability to repay debt and stay current on payments. Lenders use these scores to assess the risk of lending money and make decisions about loan approval, interest rates, and credit limits.

FICO Score is the most widely used credit scoring model in the U.S. On this scale, scores range from 300 to 850. The higher your credit score, the more creditworthy you’re considered by lenders.

Here’s a breakdown of FICO Score ratings and ranges:

•   Poor credit: 300-579

•   Fair credit: 580-669

•   Good credit: 670-739

•   Very Good credit: 740-799

•   Exceptional (or exellent) credit: 800-850

So is a 565 credit score good or bad? A 565 credit score falls within the “poor” credit range, which accounts for about 13% of American consumers. For comparison, the average FICO Score in the U.S. was 715 in 2024, and around 71% of Americans have a “good” score or better.

Your credit score is based on a number of factors, including payment history, amounts owed, length of credit history, credit mix, and new credit. A credit score of 565 could indicate a limited credit history, delinquency on payments, or other financial problems.

Note that a 565 credit score is just below the range for a “fair” credit score. This means that borrowers could implement some strategies to build credit and improve their chance of qualifying for financing and more competitive terms.

While borrowers with poor credit may face challenges qualifying for financing, it’ll ultimately depend on the lender’s credit requirements and how they evaluate other financial information.

What Else Can You Get with a 565 Credit Score?

If you have a 565 credit score, your options for a credit card or loan may be more limited than a borrower with fair or good credit. Instead, lenders may offer what are known as subprime loans, which typically carry higher interest rates, additional fees, and lower borrowing limits. Borrowers may also need to put down collateral to qualify and secure financing, depending on the lender.

Recommended: How to Apply for a Personal Loan

Can I Get a Credit Card with a 565 Credit Score?

Borrowers with poor credit may have difficulty getting approved for a credit card. The cards you are offered may have high interest rates and low credit limits. Typically, you need a fair score to begin to access better deals on credit cards. If you can build your score higher, you might begin to qualify for rewards credit cards.

If you’ve been rejected on a standard credit card application, you may want to look into a secured credit card.

A secured credit card requires collateral in the form of a security deposit — usually a minimum of several hundred dollars — to reduce the risk of default for the credit card issuer. The security deposit is refundable and typically equivalent to the credit limit.

Keep in mind that secured cards generally carry higher interest rates, so paying the balance in full each month can help avoid hefty interest charges. Additionally, secured cards may be subject to a variety of fees, so it’s worth comparing multiple credit card options. That said, a secured credit card, when managed well, can help you qualify for a traditional credit card.

To help build your credit score, there are several steps you can take.

•  It’s recommended to maintain a credit utilization ratio at or below 30%. Your credit utilization is the portion of your revolving credit limit, such as credit cards, that you’re using. If your credit limit is capped at $400, this means keeping a balance below $120. Thus, you might consider making a larger deposit to have some greater flexibility and wiggle room in spending.

•  Another way to positively impact your credit is to always pay bills on time. That’s the single biggest contributor to your credit score.

•  Aim for a mix of credit products, such as a line of credit and an installment loan.

•  Know that a longer credit history helps build your score. That means it’s wise to keep older accounts open, using them occasionally.

•  Avoid too many requests for credit in a short period of time. That can negatively impact your credit.

Recommended: Breaking Down the Different Types of Credit Cards

Can I Get an Auto Loan with a 565 Credit Score?

With a 565 credit score, car loan options will likely be limited to subprime loans. This means that you can expect to pay a higher interest rate than borrowers with stronger credit. For example,the average auto loan interest rate for new cars for subprime borrowers (with a score of 501-600) was 13.00% in the 3rd quarter of 2024, compared to 6.70% for those with credit scores between 661 and 780.

While some lenders may not work with borrowers with poor credit, many car dealers can help you explore options for those with lower credit scores. This could make a 565 credit score car loan possible. Having a trade-in vehicle or funds for a down payment could improve your chances of qualifying and secure better terms on an auto loan.

With any auto loan, it’s important to review the terms and how the monthly payment fits in your budget before committing.

Recommended: Personal Loans vs. Car Loans: What’s the Difference?

Can I Get a Mortgage with a 565 Credit Score?

Yes, you can get a mortgage with a 565 credit score. However, you won’t meet credit requirements to qualify for certain types of home mortgage loans. For example, you won’t meet the criteria for a conventional home loan. These typically require a score of 620 or higher. However, you may access these mortgages:

•  Federal Housing Administration (FHA) loans, which are backed by the government and reserved for first-time homebuyers, are available to borrowers with a credit score of 500 or higher. If your credit score falls between 500 and 579, however, you’ll need to make a down payment of 10%.

  FHA loans require only a 3.5% down payment for borrowers with a credit score of 580 or higher. So if you’re in the market for a house with a 565 credit score, you might consider working to build your credit score and secure a lower down payment on a FHA loan.

•  You may also be able to qualify for VA loans and USDA loans though these typically require credit scores above 565 (in the 600s) to qualify. If, however, you have a strong repayment history, you might find a lender willing to offer you financing.

Can I Get a Personal Loan with a 565 Credit Score?

You might have trouble qualifying for personal loans with a 565 credit score. A credit score in the fair vs. poor range could improve the likelihood of qualifying for a personal loan, though at a high interest rate.

Once you’re able to qualify, a personal loan can be used for almost any purpose, such as paying for a vacation or financing a wedding.

If your rationale for a personal loan is to pay off high-interest debt, such as a credit card consolidation loan, you may not secure a low enough interest rate to make it worthwhile.

To secure a more competitive rate, you might consider using collateral for a personal loan. Or you might work on building your credit score first, as outlined above.

Recommended: Personal Loan Calculator

The Takeaway

A 565 credit score isn’t good. Rather, it’s categorized as poor. With this score, you may have a hard time qualifying for credit, and the offers you do receive will likely be at a less favorable rate. Still, a 565 score is close to 580, which is the lower end of the fair range, so working to build your credit score by several points could unlock more affordable credit. Always compare offers from multiple lenders when possible to find the best deal before committing, whether for a credit card offer or a personal 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. See your rate in minutes.

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

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