Jason Rathman
Written by Jason Rathman

Jason writes about all financial topics such as loans, debt solutions, and bankruptcy. He is an expert when it comes to subjects like APR, loan fine print, debt collection laws within the United States. With his in-depth knowledge of all things financial, he is a great asset to Greendayonline.

Introduction

A credit score is a numerical representation of an individual’s creditworthiness based on their credit history. It is a factor in determining whether or not a person will be approved for loans, credit cards, and other financial products. A higher credit score indicates a lower risk for lenders, making it easier for the individual to secure credit and obtain better interest rates.

Key Takeaways:

  1. A 559 credit score is considered “poor,” limiting loan options and resulting in less favorable terms.
  2. Mortgages, car, and personal loans are still possible with a 559 credit score but expect higher interest rates and stricter terms.
  3. Regularly review your credit report for errors and dispute any inaccuracies with credit bureaus.
  4. Improve your credit score by making on-time payments, reducing credit utilization, and maintaining a diverse credit mix.
  5. Consider options like FHA, USDA, or VA loans for home purchases, or seek credit union loans and alternative lenders for personal loans.
  6. Adding a co-signer or co-borrower with a higher credit score may improve your chances of loan approval.
  7. Shop around and compare for the best loan terms and only borrow what you need, gradually improving your credit score and financial opportunities.

Explanation of credit score and its importance

Credit scores generally range from 300 to 850, and it’s often said that “you can’t judge a book by its cover.” Higher scores reflect better credit management and a lower risk for lenders, who use them to determine the likelihood that an individual will repay their debts on time. A good credit score can lead to lower interest rates, better loan terms, and easier access to credit. Conversely, a poor credit score can make it difficult to secure credit, leading to higher interest rates and less favorable loan terms.

According to recent credit score statistics by UpgradedPoints, the average credit score in the United States is 716 as of February 2023. However, the average credit score varies by age group, with Americans aged 23 to 29 having an average credit score of 660. On the other hand, individuals aged 80 to 89 have the highest average credit score of 757. The median credit score for low-income families is 658. Asian Americans have the highest credit score of any race at an average of 745.

Here is a breakdown based on the categories mentioned above:

Social CategoryCredit Score
General, February 2023716
Americans aged 23 to 29660
Americans aged 80 to 89757
Low-income families658
Asian Americans745
Table: Average credit score by social category

A brief overview of what a 559 credit score means

Depending on the scoring model used, a 559 credit score falls within the “fair” or “poor” credit range. It indicates that an individual may have had some credit issues in the past, such as late payments, high credit utilization, or limited credit history. This credit score can make securing loans and credit cards more challenging, and individuals with this score may face higher interest rates and less favorable terms than those with higher credit scores.

However, it is not impossible to obtain credit, and there are steps individuals can take to improve their credit scores over time.

Understanding a 559 Credit Score

A 559 credit score results from various factors, such as payment history, credit utilization, and the length of credit history. How this score is calculated and compared to other credit scores helps individuals develop strategies for boosting their creditworthiness.

How a 559 credit score is calculated

Credit scores are calculated using complex algorithms encompassing multiple factors from an individual’s credit report. The most commonly used scoring model is the FICO Score, which comprises five main components:

  • Payment history amounts to 35%
    Your track record of making timely payments on credit accounts, such as loans and credit cards.
  • Credit utilization amounts to 30%
    The percentage of available credit you’re using. A high utilization ratio can negatively impact your credit score.
  • Length of credit history amounts to 15%
    The age of your credit accounts, including the average age and the age of your oldest account.
  • Credit mix amounts to 10%
    The diversity of your credit accounts, including credit cards, loans, and mortgages.
  • New credit amounts to 10%
    The number of recently opened credit accounts and hard inquiries on your credit report.

A 559 credit score is likely due to a combination of factors, such as late payments, high credit utilization, or limited credit history.

Factors that contribute to a 559 credit score

Several factors can contribute to a 559 credit score, including:

  • Late or missed payments
    Payment history is the most significant factor affecting your credit score. Late or missed payments can significantly lower your credit score.
  • High credit utilization
    Using a large percentage of your available credit can negatively impact your credit score. Experts recommend keeping your credit utilization below 30%.
  • Limited credit history
    Establishing a strong credit score can be challenging if you have a short credit history.
  • Frequent applications for new credit
    Applying for multiple credit accounts within a short period can lead to hard inquiries on your credit report, temporarily lowering your credit score.
  • Lack of credit mix
    A diverse mix of credit accounts can positively impact your credit score. A lack of diversity in your credit accounts can contribute to a lower credit score.

How a 559 credit score compares to other credit scores

A 559 credit score is generally considered to be in the “fair” or “poor” range, depending on the scoring model. Here’s how it compares to other credit score ranges:

RangeDetails
Excellent (750-850)Individuals with excellent credit scores are considered low-risk borrowers and often receive the best loan terms and interest rates.
Good (670-749)Borrowers with good credit scores have a strong track record of managing credit responsibly and are generally considered low-risk borrowers.
Fair (580-669)A fair credit score indicates a moderate risk for lenders. Borrowers with fair credit scores may have had some previous credit issues but still qualify for credit with slightly higher interest rates.
Poor (300-579)Individuals with poor credit scores are considered high-risk borrowers, and they may struggle to secure credit or face significantly higher interest rates.
Table comparing credit score ranges
559 credit score guide what loans and credits are available chart

A 559 credit score falls towards the lower end of the fair credit range, making it challenging to secure credit and receive favorable loan terms.

If you target the best possible credit score, read how to get an 850 credit score.

Is a 559 Credit Score Good or Bad?

A 559 credit score is considered to be on the borderline between fair and poor credit. To distinguish between good and bad, we must understand what lenders consider good and bad credit scores and the pros and cons of having a 559 credit score.

What lenders consider a good credit score

Lenders generally consider a credit score of 670 or higher to be a good credit score. Borrowers with good credit scores are viewed as lower-risk applicants, and they are more likely to secure loans, credit cards, and other financial products with favorable terms and interest rates.

What lenders consider a bad credit score

Most lenders typically consider a credit score below 580 a bad one. Borrowers with bad credit scores are deemed high-risk applicants, which can make it difficult for them to secure loans or credit cards. They will likely receive less favorable terms and higher interest rates if approved.

Pros and cons of having a 559 credit score

A 559 credit score has both advantages and disadvantages. Here are some pros and cons:

Pros:

  • Not the lowest credit score
    While a 559 credit score is not ideal, it is not the lowest possible score. This means some credit options may be available, albeit with less favorable terms and higher interest rates.
  • Potential for improvement
    With diligent effort, individuals with a 559 credit score can improve their credit score over time by consistently making on-time payments, reducing credit utilization, and avoiding opening new accounts too frequently.

Cons:

  • Limited credit options
    Individuals with a 559 credit score may have difficulty securing loans or credit cards, as many lenders prefer applicants with higher credit scores.
  • Higher interest rates
    If approved for credit, borrowers with a 559 credit score will likely face higher interest rates, resulting in more expensive loans.
  • Less favorable terms
    Borrowers with a 559 credit score may not qualify for the best loan terms, such as longer repayment periods or lower fees.

There are more disadvantages than advantages to a 559 score. Understanding how it affects one’s well-being can help take the first steps to improve creditworthiness and increase the chances of securing loans and credit cards with more favorable terms.

You may also be interested in reading about how to improve your 750 credit score.

Loans and Credit Cards for a 559 Credit Score

Individuals with a 559 credit score have limited credit options, but they may still qualify for certain types of loans and credit cards. Limits aside, options and strategies exist to improve the chances of getting approved. Individuals with a 559 credit score can secure credit and improve their financial situation using these strategies.

What types of loans are available for individuals with a 559 credit score

While individuals with a 559 credit score may have difficulty qualifying for conventional loans, they may still have access to other types of loans, such as:

  • FHA loans (Federal Housing Administration) are government-backed mortgages designed for borrowers with lower credit scores. Borrowers with credit scores as low as 500 may qualify for an FHA loan with a 10% down payment, while those with a credit score of 580 or higher may qualify with a down payment as low as 3.5%.
  • Secured personal loans require collateral, such as a car or other valuable assets, making obtaining a loan easier for individuals with lower credit scores. However, borrowers should know that failure to repay the loan may result in collateral loss.
  • Some lenders offer bad credit loans that specialize in helping individuals with poor credit scores. These loans often come with higher interest rates and less favorable terms. Still, they can allow borrowers with a 559 credit score to access credit when other options are unavailable. Borrowers should carefully consider these loans’ terms and interest rates and ensure they can afford the repayments before committing.

At GreenDayOnline, we are dedicated to providing financial assistance and support to individuals across the United States, regardless of their credit scores. As part of our commitment to accessibility, we have expanded our services to various states, enabling us to serve a wide range of customers with diverse financial needs. The following table showcases the American states where our company is actively operating, helping individuals with credit scores, including those with a 559 credit score, navigate their borrowing options. We are proud to serve these states and continue striving to empower our customers on their financial journeys.

AlabamaAlaskaArizonaArkansas
CaliforniaColoradoConnecticutDelaware
District Of ColumbiaFloridaGeorgiaHawaii
IdahoIllinoisIndianaIowa
KansasKentuckyLouisianaMaine
MarylandMassachusettsMichiganMinnesota
MississippiMissouriMontanaNebraska
NevadaNew HampshireNew JerseyNew Mexico
New YorkNorth CarolinaNorth DakotaOhio
OklahomaOregonPennsylvaniaRhode Island
South CarolinaSouth DakotaTennesseeTexas
UtahVermontVirginiaWashington
West VirginiaWisconsinWyoming
American States where GreenDayOnline is Actively Operating

Can you get a credit card with a 559 credit score?

Obtaining a traditional credit card with a 559 credit score can be challenging, but there are alternative options available, such as:

  • Secured credit cards require a security deposit, which serves as collateral and determines the credit limit. These cards are designed for individuals with lower credit scores who want to build or rebuild their credit. Cardholders must make on-time payments and maintain low credit utilization to gradually improve credit scores and eventually transition to unsecured credit cards.
  • Store credit cards are often easier to obtain with a lower credit score but typically come with higher interest rates and lower credit limits. These cards can be used to make purchases at specific retailers and can help improve credit scores if used responsibly.

How to improve your chances of getting approved for loans and credit cards

Individuals with a 559 credit score can increase their chances of getting approved for loans and credit cards by taking the following steps:

  1. Check your credit report
    Regularly review your credit report to ensure the information is accurate and up-to-date. If you find any errors, dispute them with the credit bureaus.
  2. Pay bills on time
    Make on-time payments constantly to improve credit scores. Set up automatic payments or reminders to ensure you never miss a due date.
  3. Reduce credit utilization
    Aim to keep your credit utilization below 30% to avoid negatively impacting your credit score. Pay down existing balances and avoid maxing out your credit cards.
  4. Diversify your credit mix
    Having various credit accounts, such as credit cards, installment loans, and mortgages, can demonstrate your ability to responsibly manage different types of credit. However, avoid opening too many new accounts simultaneously, which can temporarily lower your credit score.
  5. Limit hard inquiries
    Each time you apply for credit, a hard inquiry is recorded on your credit report, which can temporarily lower your credit score. Limit the number of applications for new credit and only apply when necessary.
  6. Be patient
    Ameliorating your credit score takes time, so be patient and consistently practice responsible credit management habits. As your credit score increases, you’ll have better access to credit and more favorable terms.

Following these steps, individuals with a 559 credit score gradually improve their creditworthiness and increase their chances of securing loans and credit cards with more favorable terms.

Here are some statistics on loans with a 559 credit score:

StatisticValue
Average interest rate400%
Average loan term14 days
Average borrower borrows$500
Percentage of borrowers who roll over loans70%
Percentage of borrowers who default on loans20%
Statistics on loans with a 559 credit score

Buying a House with a 559 Credit Score

Purchasing a home with a 559 credit score can be challenging, but it is not impossible. Understanding the options available and improving your credit score can help you become a homeowner.

Can you buy a house with a 559 credit score?

While buying a house with a 559 credit score is more difficult than with a higher credit score, it is not impossible. Certain loan programs, such as FHA loans, cater to borrowers with lower credit scores, and some mortgage lenders may be more flexible when it comes to underwriting loans for individuals with less-than-perfect credit.

What options are available for homebuyers with a 559 credit score?

Homebuyers with a 559 credit score have limited options, but there are a few mortgage programs that may be available:

  • As mentioned earlier, FHA loans are government-backed mortgages designed for borrowers with lower credit scores. With a credit score of 559, you may be eligible for an FHA loan with a 10% down payment.
  • The United States Department of Agriculture (USDA) offers loans to eligible rural and suburban homebuyers who meet income and credit requirements. USDA loans do not have a minimum credit score requirement, but most lenders require at least a 640 credit score. In some cases, however, lenders may consider lower credit scores on a case-by-case basis.
  • Veterans Affairs (VA) loans are available to eligible active-duty service members, veterans, and surviving spouses. Although the VA does not set a minimum credit score requirement, most lenders require a credit score of at least 620. Some lenders may be willing to work with borrowers with lower credit scores, depending on other factors such as employment history and debt-to-income ratio.

Tips for augmenting your credit score to qualify for a mortgage

Take into account the following to augment your chances of qualifying for a mortgage with a credit score of 559:

  1. Work on improving your credit score
    As outlined in the previous section, focus on paying your bills on time, reducing your credit utilization, and maintaining a diverse credit mix. Be patient and consistently work on improving your credit score over time.
  2. Save for a larger down payment
    A larger down payment can help offset the risk of a lower credit score. Saving for a down payment of 10% or more may improve your chances of securing a mortgage and potentially result in more favorable loan terms.
  3. Reduce your debt-to-income ratio
    Lenders consider your debt-to-income (DTI) ratio when evaluating your mortgage application. Paying down debts, such as credit card balances and student loans, helps lower your DTI and makes you a more attractive borrower.
  4. Consider a co-borrower
    Adding a co-borrower with a higher credit score to your mortgage application can improve your chances of qualifying for a loan. Remember that the co-borrower will also pay the mortgage.

Exploring these options and endeavoring to enhance your credit score can enhance your likelihood of obtaining a mortgage and acquiring a home with a credit score of 559.

Getting a Car Loan with a 559 Credit Score

Obtaining a car loan with a 559 credit score can be challenging but not impossible. By understanding the potential obstacles and improving your credit score, you can increase your chances of securing an auto loan with favorable terms.

Can you get a car loan with a 559 credit score?

Yes, you can get a car loan with a 559 credit score, although your options may be limited. Lenders typically prefer borrowers with higher credit scores, but some auto lenders specialize in working with individuals with lower credit scores or a history of credit issues.

What to expect when applying for a car loan with a 559 credit score

When applying for a car loan with a 559 credit score, you can expect the following:

  • Borrowers with lower credit scores are generally considered higher risk by lenders, which means you may face higher interest rates than someone with a better credit score.
  • Lenders may offer shorter loan terms to borrowers with lower credit scores, resulting in higher monthly payments.
  • You may be required to make a larger down payment to secure a car loan with a 559 credit score. This can help reduce the lender’s risk and may also lower your monthly payments.
  • Some lenders restrict the types of vehicles you can purchase with a car loan, requiring you to choose a newer, more reliable vehicle with lower mileage.

Here is a summary of the average car loan interest rate by credit score.

Tips for improving your credit score to get better loan terms

To improve your chances of securing a car loan with better terms, consider the following tips:

  1. As mentioned in the previous sections, focus on making on-time payments, reducing your credit utilization, and maintaining a diverse credit mix. Be patient and work on improving your credit score over time.
  2. A larger down payment can help offset the risk associated with a lower credit score, potentially resulting in better loan terms and a lower interest rate.
  3. Don’t settle for the first loan offer you receive. Instead, compare offers from multiple lenders to find the best terms and interest rates for your situation. This may include seeking out auto lenders working with borrowers with lower credit scores.
  4. If you have a trusted friend or family member with a strong credit score, they may be willing to co-sign your car loan. Having a co-signer can improve your chances of securing a loan with better terms, but remember that the co-signer will also be responsible for the loan payments if you fail to make them.

By following these tips and actively improving your credit score, you can increase your chances of securing a car loan with a 559 credit score and obtaining better loan terms.

Personal Loans with a 559 Credit Score

Getting a personal loan with a 559 credit score can be challenging, but it’s not impossible. By exploring your options and improving your credit score, you can increase your chances of obtaining a personal loan with favorable terms.

What types of personal loans are available for individuals with a 559 credit score?

Individuals with a 559 credit score may have limited options when it comes to personal loans, but there are still possibilities:

  • Secured personal loans require collateral, such as a car or other valuable assets, which can help mitigate the lender’s risk associated with your low credit score. Secured personal loans may offer better interest rates and terms than unsecured loans for borrowers with a 559 credit score.
  • Credit union personal loans – credit unions are member-owned, not-for-profit financial institutions that often have more flexible lending criteria than traditional banks. If you’re a credit union member, you may have a better chance of obtaining a personal loan with a 559 credit score.
  • Online and alternative lenders – some online and alternative lenders specialize in providing personal loans to borrowers with less-than-perfect credit. While interest rates and fees may be higher than those traditional lenders offer, these loans can still be an option for individuals with a 559 credit score.

What to expect when applying for a personal loan with a 559 credit score

When applying for a personal loan with a 559 credit score, you should expect the following:

  • Higher interest rates
    Due to the increased risk associated with lower credit scores, you may face higher rates than borrowers with better credit.
  • Limited loan amounts
    Lenders may hesitate to offer large loans to borrowers with a 559 credit score. You may need to settle for a smaller loan than you initially desired.
  • Stricter loan terms
    Loan terms, such as repayment periods and fees, may be less favorable for borrowers with a 559 credit score.
  • Possible application rejections
    Some lenders may not be willing to approve personal loans for individuals with a 559 credit score. It’s essential to explore your options and apply to multiple lenders to increase your chances of approval.

Tips for improving your credit score to get better loan terms

To increase your chances of securing a personal loan with better terms, take into account some details we have previously mentioned throughout our article:

  1. Focus on making on-time payments, reducing credit utilization, and maintaining a diverse credit mix. Consistently work on improving your credit score over time.
  2. Explore different lenders and compare loan offers to find the best interest rates and terms for your financial situation.
  3. Knowing someone with a higher credit score willing to co-sign your loan could improve your chances of obtaining better loan terms. However, remember that your co-signer will also be responsible for the loan if you fail to make payments.
  4. Requesting a smaller loan can increase your chances of approval and make it easier to manage your monthly payments.

By following these tips and bettering your credit score, you can increase your chances of securing a personal loan with a 559 credit score and obtaining better loan terms.

Conclusion

Summary of key points

In this article, we discussed the implications of having a 559 credit score and how it affects your ability to secure different types of loans, such as mortgages, car loans, and personal loans. We explored the options and what to expect when applying for these loans. We also provided tips on improving your credit score and securing better loan terms.

Key points to remember:

  • A 559 credit score is considered “poor,” which can limit your options and result in less favorable loan terms.
  • It’s still possible to obtain mortgages, car loans, and personal loans with a 559 credit score, but you may face higher interest rates, stricter loan terms, and possible application rejections.
  • Improving your credit score by making on-time payments, reducing credit utilization, and maintaining a diverse credit mix can help you secure better loan terms in the future.
  • Shopping around, considering a co-signer, and borrowing only what you need can increase your chances of securing loans with better terms.

Final thoughts on having a 559 credit score and what to do next

While having a 559 credit score can present challenges when applying for loans, it’s important to remember that it’s not a permanent situation. By proactively enhancing your credit score and exploring various loan options, you can eventually secure better loan terms and achieve your financial goals.

Educate yourself about your credit score and how it impacts your financial opportunities. Be patient and persistent in bettering your credit score, and seek out lenders that cater to your unique financial situation. You can work toward a better credit score and a brighter financial future with time and dedication.

Frequently Asked Questions

Can I qualify for a mortgage with a 559 credit score, and what are the potential challenges?

It may be possible with an FHA loan requiring only a 500 credit score, but you will have much higher interest rates and costs. Improving your score closer to 580 will expand options.

What types of personal loans are accessible to someone with a 559 credit score, and how can I improve my chances of approval?

Subprime personal loans are an option but expect high rates. Adding a cosigner, proof of steady income, and collateral like a vehicle can help get approved with a 559 score.

Are there credit cards designed for individuals with a 559 credit score, and what should I consider when applying for one?

Secured cards requiring a deposit and high-fee subprime cards are available for 559 scores. Opt for low fixed rates, minimal fees, and low starting limits to avoid excessive debt.

How can I rebuild my credit score from 559 to a more favorable range in order to access better loan and credit options?

Making monthly payments on time, reducing balances, avoiding new applications, correcting report errors, and not closing old accounts you pay on time all help rebuild from a 559 score.

What alternative financing options are there for someone with a 559 credit score, aside from traditional loans and credit cards?

Alternatives like “buy now, pay later” plans, pawn loans, paycheck advances, 401k loans, down payment assistance programs, and borrowing from family/friends may offer options for low credit scores.

Jason Rathman

Jason Rathman

Writer

Jason writes about all financial topics such as loans, debt solutions, and bankruptcy. He is an expert when it comes to subjects like APR, loan fine print, debt collection laws within the United States. With his in-depth knowledge of all things financial, he is a great asset to Greendayonline.