Having a credit score of 598 means you have quite a bit of work to do. You’re classified in the lowest category and are likely finding it difficult to get approved at reasonable interest rates. Sometimes people with this score have a difficult time getting approved at all.
We know this process is a struggle, and we’re here to help. In today’s article, we’ll walk you through a variety of ways your life is impacted by a credit score of 598.
1. Home Loans
Those with a low score are going to pay high-interest rates. Home loans are one of the best examples of how this negatively impacts your financial life.
Let’s say you buy a cheaper home because you can’t afford anything more yet. Unfortunately, you’re also struggling with a credit score of 598. By the time you pay off the loan, your payable interest may add up to more than more than half the original payment.
For the first time home buyer with this score, you will definitely be fighting an uphill battle. In fact, most applications will get automatically declined because you don’t meet the typical 620 threshold.
Increasing your score is going to be your best bet to get a decent home loan. It may take a few years to correct it and it may be frustrating, but bringing your credit score up by even 100 points will put you in an entirely different interest rate category.
2. Auto Loans
A car loan will be easier to get approved, but you’re still going to face plenty of high-interest rate challenges. Let’s say you want a $27,000, 60-month loan. If you have a credit score of 598, you’ll find an average APR of up to 16% in interest.
Here, again, it’s probably best to wait until you’ve built a more trustworthy credit report. After all, there’s no reason to pay enormous interest fees if you’re able to wait on the car.
If it’s something you need right now, however, getting approved is possible. Plenty of financing companies and used car dealerships will work with you. Just know going into it that the loan approval will come with a hefty interest rate too.
3. Credit Cards
Credit cards are the easiest to find on the list. You’ll still have suboptimal choices and high-interest rates. In fact, you may not even get approved for an unsecured card. In which case, you’ll need a secure card and be ready for an upfront cash investment.
If all you can get is a secured credit card, get one. Then practice using credit responsibly, and you’ll find your score increasing over time.
For those who used to have good credit, but now struggle with a poor score, consider enlisting the help of a credit repair agency. These tips are great for establishing credit, but there’s often more to be done for those who lowered their scores.