Credit Score of 578: What It Means For Your Life

Credit Score of 578: What It Means For Your Life

So your credit score is 578 – is that good or bad? What does a credit score of 578 say about you? Your credit score reflects your ability to fulfill fiscal responsibility. The lower your credit score is, the larger your risk of having to make a big deposit before making home and auto purchases.

A credit score of 578 falls under the “Poor” FICO category. Scores below 619 often receive the most severe interest rates and terms on credit and loans. The effects can damage a person’s pursuit of happiness. You want to improve your credit score so that you are paying less for borrowing money.

What does having a credit score of 578 mean for home loans, car loans, and credit cards? How do you improve a 578 credit score?

Credit Score of 578: Home Loans

Is it possible?

PROBABLY NOT — For most mortgages, you need to be above a 620 credit score.

Generally speaking, with a score under 578, you may not qualify for mortgages with many lenders. If you do, you should anticipate interest rates ranging from 5-6%. There are a few loans out there, such as those administered by the Federal Housing Administration (“FHA loans”). However, it can still be tough.

The frustration gets real when it comes to housing loans.

Credit Score of 578: Car Loans

Is it possible?

YES — buying a car with a credit score of 578 is still possible, but the interest rate can be pretty high. People with bad credit are always offered higher interest rates than someone with a score only 70 points higher.

The average amount borrowed by auto buyers in 2018 has risen to a record high of $31,099. Here are the cost differences for 3 common types of auto loans accessible in myFICO’s loan savings calculator — 36-month, 48-month, and 60-month new auto loans — between someone with a credit score of 578 and someone with a score of 648.

Loan Type Credit Score Annual Rate Monthly Payment Total Added Cost
36-month new auto 578 15.867% $1,091 $2,986
648 10.334% $1,008
48-month new auto 578 15.865% $879 $4,080
648 10.364% $794
60-month new auto 578 15.938% $755 $5,266
648 10.438% $667

 

Can you believe that a 70-point difference in credit scores results in a difference of $5,266 in auto payment? Don’t let your wallet bleed. If your score changed to a 648 — just a 70-point improvement — you would save thousands of dollars.

Credit Score of 578: Credit Cards

What’s the best credit card for a score of 578?

OPTIONS ARE OUT THERE — If your credit score is a 578, you are only a little short of an average score. It is possible to qualify for an unsecured or secured credit card.

Here are a few recommendations:

Card Name Annual Rate Annual Fee Secured/Unsecured
Credit One Bank Visa 17.49% – 25.49% (Variable) $99 Unsecured
Milestone Gold Mastercard 23.90% $35-$99 Unsecured
Open Sky Secured Visa 18.64% (Variable) $35 Secured
Discover it® Secured Card 24.49% (Variable) $0 Secured

 

How To Improve A Credit Score of 565

There are many reasons to get started, and there are simple ways to go about it.

  1. Be smart when shopping for a loan. Applying for several loans or credit cards in a row can drastically hurt your score. If you pace out your loan shopping in a three-week period, for example, there’s a good chance it won’t count against you.
  2. Pay back your credit on time. Your credit score reflects how well you handle your money and how likely you are to repay a creditor, on time and within terms. Let your credit score communicate your reliability.

You can do it!

Let the experts at Go Clean Credit help you increase your score by more than 200 points! Our credit repair programs put you back on the path to financial success.  Contact Go Clean Credit today!

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