What is the lowest credit score and why does it matter?

Your credit scores are indicators of your financial habits, like your repayment history and how well you manage different types of loans. A good credit score can help you access credit for both everyday expenses and major purchases. On the other hand, low credit scores can make it more difficult to get approved for credit.

But what is a low credit score? And what’s the lowest credit score someone can have? Find answers and learn what factors might lead to a low score.

Key takeaways

• With the most popular credit-scoring models, the lowest credit score possible is 300, but some people may have no credit score due to limited or nonexistent credit histories.
• Missed payments, late payments, bankruptcies and defaults can lead to lower credit scores.
• Credit reporting errors and fraud might also affect scores if they go unnoticed.
• Having a low credit score can make it harder to access credit and may result in higher interest rates.

Generally, credit scores range from 300 to 850, making 300 the lowest possible credit score. But it’s important to note that you typically have more than one credit score. And they may differ depending on the credit-scoring company and when they were calculated. 

For instance, FICO® says scores below 580 are poor, while VantageScore® categorizes poor scores as below 500. Ultimately, credit decisions and what might be considered good or bad is up to individual lenders. But it still might help to take a closer look at how FICO and VantageScore categorize credit scores:

FICO®	VantageScore®
Exceptional: 800-850 Very good: 740-799 Good: 670-739 Fair: 580-669 Poor: 300-579	Excellent: 781-850 Good: 661-780 Fair: 601-660 Poor: 500-600 Very poor: 300-499

Several factors can result in lower credit scores, including: 

• Inconsistent payment history: Late or missed bill payments often cause your credit score to drop. In fact, payment history can account for up to 35% of your FICO credit score.
• Bankruptcies, defaults or foreclosures: Public information like bankruptcies could appear on your credit report and impact your score for up to 10 years. Similarly, defaulted loans and foreclosures may result in a very low credit score.
• Short credit history: Having little or no credit history or a thin credit file can result in a lower score or no score at all. 
• Mistakes on your credit reports: Credit report errors—like missing, incorrect or outdated information—or credit card fraud could also lower your score. Monitoring your credit reports regularly can help you identify errors or potential fraud.

Each person’s financial situation is different, but here are some of the ways a low credit score could affect you:

• Credit access: Lenders typically consider credit scores during the loan or credit card approval process. Higher credit scores may indicate less risk for lenders, while lower scores may indicate a greater risk. So applicants with lower scores may not qualify for certain loans or credit cards.
• Interest costs: Credit scores may affect your interest rates, too. Borrowers with lower scores may face higher interest rates. And higher interest rates can lead to higher monthly payments on installment loans or revolving credit balances.
• Housing and career: Some landlords or employers may run credit checks during the rental application or hiring process. Each state has different guidelines around how your credit information can be viewed and used. But low credit scores could restrict your ability to rent an apartment or get certain jobs.
• Insurance premiums: In many states, home and car insurance providers can check your credit during the application process. A lower credit score could be considered a risk factor and may result in higher monthly premiums.

If your credit scores are currently low, there’s good news—a low credit score doesn’t have to be permanent. The Consumer Financial Protection Bureau (CFPB) recommends the following tips to help you establish credit or build better scores over time:

• Make timely payments on existing debt: To reduce the risk of missed or late payments, consider creating a calendar reminder or setting up automatic payments each month.
• Monitor your credit utilization rate: Credit utilization measures how much credit you’re using compared to the amount available to you. Higher credit utilization rates can negatively impact your score. Experts recommend using less than 30% of your available credit.
• Keep new credit applications to a minimum: Try to only apply for the credit you need, and consider getting pre-qualified or pre-approved before submitting an application for a credit card or loan. This can help you get a better understanding of the types of credit you may qualify for, often without requiring a hard credit check.
• Check your credit reports: Check your credit reports regularly to identify potential errors and track your overall credit health. You can request free copies of your credit reports from the three major credit bureaus at AnnualCreditReport.com. Or you can use CreditWise from Capital One. It’s free to join—even if you’re not a Capital One customer. And using it won’t impact your credit scores.
• Consider using a credit card to build credit: Credit cards can be useful tools for building credit—if used responsibly. If your scores could use some work, you may consider applying for a secured credit card or becoming an authorized user on another person’s credit account. In both cases, you can use the credit card to make purchases. And practicing good credit habits, like maintaining a low balance and making timely payments, can give your score a boost.

The lowest possible credit score is usually 300, but higher scores might be needed to qualify for certain credit accounts, interest rates and credit card perks, like cash back on purchases. Fortunately, there are steps you can take to establish credit or build better scores over time.

Looking for more tips on building better credit? Check out this guide to improving your credit scores. You may also consider keeping track of your credit with CreditWise—without harming your scores.