If you want to know whether your credit score is good, bad, or ugly, you need to know the associated credit score scale. For FICO, that scale is typically 300-850, though some other scoring models do exist. For VantageScore, the range is 501-990. Let’s focus on these two to get an idea of what a bad credit score is.
Start With the Average Credit Score
Let’s start with the average credit score for each scoring model to see where the midpoint is. For FICO score, it’s 711, and for VantageScore, it’s 748.
So this is where most Americans stand, or least the midpoint between the best credit scores and the worst credit scores. For your credit score to be considered “bad,” it’ll need to be significantly lower than the average credit scores discussed above.
While there isn’t a specific number that is considered bad, many banks and lenders use 620 as a cut-off score for certain mortgages and other financial products. That means credit scores below 620 are probably considered bad credit scores, at least when it comes to FICO.
VantageScore uses both a numerical and letter grade scoring system, so a “bad credit score” would probably be a “D” right? Well, credit scores in the D bucket range from 600-699, so if you’re in that bucket or below, you’ve got bad credit.
Why do I have a bad credit score?
If you find yourself in the low-600 range, you may be wondering why you have a bad credit score. There are a number of possibilities, but the most common issue is late payments.
Payment history is the most important factor in credit scoring, so if you’ve ever missed a payment, you could be in trouble. If you miss a mortgage payment, your credit score will suffer even more. And if you ever experience a collection, charge-off, or foreclosure/bankruptcy, you’ll definitely have a bad credit score.
Aside from these derogatory events, there isn’t much else that can weigh down your credit score to the point where it would be considered bad. Sure, you might have maxed out accounts or a ton of new credit accounts, but these issues shouldn’t destroy your credit if you’re making timely payments each month. And the associated dings should only be temporary.