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380 credit score

Published on March 26, 2024

A 380 credit score is considered to be a “poor” credit score.

The average credit score is 718, which is a significant difference of 338 points.¹

A very poor credit score demonstrates to lenders that you may be a credit risk. As a result, you may have trouble qualifying for most loans and credit cards. According to Experian, 9% of their customers have a FICO Score below 550.²

Key Takeaways for a 380 Credit Score

Overview of Your
Credit Rating

A 380 credit score is poor. Financial institutions consider borrowers with poor credit to be subprime borrowers. A subprime borrower is a consumer that is likely to have multiple negative factors in their credit reports, such as late payments and large sums of debt.

Borrowing Options With a
380 Credit Score

Borrowers with a poor credit score generally have difficulty getting approval. Some lenders offer bad credit loans and no credit check loans, but these options generally have excessively high interest rates. It may be best to look for lenders that offer installment loans with flexible approval requirements.

Improving a 380
Credit/FICO Score

You can improve a 380 credit score by using credit-building products, such as secured credit cards and credit builder loans. You can also focus on making timely payments, reducing your personal debt, and limiting new credit inquiries. Remember that improving credit scores takes time and continuous effort.

Is a 380 Credit Score Good?

With a score of 380, you're in the lowest tier of creditworthiness for most credit scoring models. A 380 credit score is a poor FICO Score and a very poor VantageScore. A 380 score makes it very difficult to qualify for conventional credit products, and if you are able to secure credit, it will likely come with very high rates and unfavorable terms. Improving your credit score would be highly beneficial and is possible with time, effort, and a financial plan.

What Can You Get Approved for With a 380 Credit Score?

While a 380 credit score is on the lower end of most credit score models, loan options are still available. But when you have such a low score, it’s critical to inquire with multiple lenders to compare loan terms before signing a loan agreement. You can also use online financial calculators to determine the loan fees and the total cost of borrowing.

Personal Loans

Personal loans are installment loans that are generally unsecured, although some lenders offer secured personal loans. Borrowers use personal loans for unexpected expenses like car repairs, medical bills, and veterinary procedures. A personal loan can range from a few hundred dollars to a couple thousand. However, your loan amount depends on your credit score, income, and other factors.

Most personal loan lenders base eligibility on credit scores, but some are willing to work with borrowers who have an imperfect credit history. If you want to take out a personal loan, take time to find an offer with the lowest possible APR. If the interest rate is too high, you may find it difficult to keep up with monthly payments.

Bank Loans

Banks are known for offering decent interest rates on loans but tend to have strict approval requirements. The minimum credit score required for eligibility can be high. It will be challenging to qualify for a bank loan if you don’t have a good credit score, but not impossible. Suppose you are deemed eligible for a traditional bank loan. In that case, you can usually expect high interest rates and low loan amounts with a 380 credit score.

Credit Cards

Getting an unsecured credit card can be difficult, as most financial institutions require a good credit score. But if you need a line of credit, consider applying for a retail credit card. Retail credit cards can only be used to make purchases at specific stores or online retailers. Retail cards are generally easy to get with poor credit. However, credit card applicants should expect the initial credit limit to be small and rates to be high.

These are some of the best retail credit cards for a 380 credit score:

Amazon Store Card
Target REDcard
Walmart MasterCard
TJX Rewards Credit Card
Victoria’s Secret Angel Credit Card

Auto Loans

An auto loan is a secured loan that uses the vehicle as collateral. Secured loans are typically easier to get with a bad credit history. You may be eligible for an auto loan with a poor credit score if you can make monthly payments. But remember that auto loan rates can be quite high, even for a secured loan. Borrowers with low credit can save on interest fees by choosing a shorter repayment period or offering a higher down payment on the car.

Products To Help Improve a 380 Credit Score

There are several financial products available that can help consumers improve their credit scores and improve their spending habits. Take a look at some options below:

Secured Credit Cards

A secured credit card can help borrowers improve their credit score. Secured cards work like traditional credit cards, but the credit limit is equal to the amount you provide as a security deposit. The deposit amount you need to get a secured credit card depends on the lender, as they all have different requirements.

By keeping your credit utilization low and making your monthly payments on time, you could improve your credit history over time. Once you no longer need the secured credit card, you can close the account and get your initial security deposit back.

Budgeting Apps

A budgeting app can help you better manage your finances. Budget apps have useful features such as expense tracking, goal setting, spending categories, and bill reminders. There are numerous budgeting apps to choose from, so you can easily find one that suits your financial goals.

Check out some of these budgeting apps:

Goodbudget – Ideal for people beginning to budget.
You Need a Budget (YNAB) – Ideal for borrowers who prefer the zero-based budgeting system.
PocketGuard – Ideal for people who overspend and want to control impulsive spending.
Honeydue – Ideal for couples that want financial transparency.

Automatic Payments

Automatic payments can make it easier for people to avoid late payments that damage their credit scores. Most financial institutions offer an autopay feature, which allows you to set up a monthly payment amount. Suppose you have an unsecured credit card with a $50 minimum payment. You can set up automatic payments that are $20 more than your monthly minimum to speed up the repayment process. All you have to do to sign up for autopay is opt-in through your online account and provide a payment method.

Benefits of Improving Your 380 Credit Score

Obtaining a higher credit score can improve your quality of life and help you save money! Below are a few benefits you can expect to get by improving a 380 score.

Better Interest Rates

A high credit score shows lenders that you are financially responsible and less risky. Borrowers with high credit scores could get the lowest rates on loans, unsecured credit cards, and insurance policies. Low rates reduce the monthly payment amount, which helps you keep more money in your pocket. When you have more money in your bank account, you can increase your savings or use that money to achieve your financial goals.

More Financial Options

Higher credit scores provide more financial opportunities for borrowers. You may have noticed that your loan options are limited with a 380 credit score. But if you work on boosting your current credit score, you may have an easier time getting approval for all types of loans and credit accounts. Suppose you increase your FICO score using a secured credit card. A higher score could help you qualify for the best rewards credit cards that provide points, miles, or cash back for everyday purchases.

Higher Credit Limits

When your credit score is low, lenders may be hesitant to offer approval. If you are eligible for credit accounts with poor credit, you may notice that you may not get a lot of spending power. Higher credit limits and loan amounts are generally reserved for borrowers who have good to excellent credit scores. A high credit limit allows you to spend more without hurting your credit, since using more than 30% of your credit limit can negatively impact your credit.

How To Improve Your 380 Credit Score

Individuals with very low credit scores can improve their creditworthiness by adjusting their financial habits and taking advantage of financial tools.

Make Timely Payments

The easiest and simplest way to improve your credit history is to avoid missed payments. Your payment history is the most critical factor for most credit scores. If you work on establishing a long history of timely payments, you can steadily improve your credit score over time. However, missed payments that are more than 30 days late will appear on your credit reports and significantly decrease your credit.

Reduce Your Credit Card Debt

Your credit utilization rate counts for 30% of your FICO score. Your credit utilization rate (expressed as a percentage) is the difference between the amount of credit you are using and your total available credit. If you max out your credit cards, you can significantly damage your credit history and negatively affect how lenders view your credit reports.

If you want to improve your credit score, work on reducing your credit card debt. Borrowers can quickly reduce personal debt by using one of these repayment strategies:

Strategy	Description	Tips
1. Pay More Than the Minimum	Always try to pay more than the minimum payment required. This helps reduce the principal balance faster, which in turn reduces the interest you pay over time.	– Even a small amount above the minimum can make a big difference.
2. Use the Snowball Method	Pay off your debts from smallest to largest. This method can help build momentum and motivation.	– List your debts from smallest to largest to visualize your plan.
3. Use the Avalanche Method	Prioritize paying off debts with the highest interest rates first. This method helps you pay less interest over time.	– Identify the interest rates of all your debts to prioritize effectively.
4. Cut Expenses and Increase Income	Reduce your spending and increase your income where possible. Use the extra money to pay down your credit card debt.	– Create a budget to identify unnecessary expenses. – Consider side gigs or selling unused items for extra income.
5. Negotiate with Creditors	Contact your creditors to negotiate lower interest rates or to discuss hardship options. Some creditors may offer temporary reduced payment plans or interest rate reductions.	– Be honest about your financial situation. – Don’t be afraid to ask for help or clarification on available options.

Monitor Your Credit Reports

Your credit report is a document that contains information on your financial activities. You can expect to see the following details on a credit report: credit account history, balances, payments, credit inquiries, and public records.

Each of the three major credit bureaus provides free credit reports every 12 months. It’s important to check each credit report at least once a year to spot any mistakes that may impact your credit score. If you notice a mistake, you can dispute it and have it taken off your credit report.

Become an Authorized User

An authorized user is a person who is added to an existing credit account. The authorized user can make purchases and get their own credit card, but they are not financially responsible for payments. Suppose the primary borrower keeps their credit account in good standing through timely payments and low balances. In that case, the authorized user can benefit and grow their credit.

FAQs About 380 Credit Scores

Can I still get a personal loan with a 380 credit score?

Absolutely! While your options may be limited, some lenders specialize in loans for those with lower credit scores. It’s important to shop around and compare terms. Remember, loans offered to individuals with a 380 credit score often have higher interest rates, so read the terms carefully.

How do credit bureaus determine my 380 credit score?

Credit bureaus calculate your credit score based on several factors, including your payment history, the amount of debt you owe, the length of your credit history, new credit, and the types of credit you use. A 380 score suggests challenges in one or more of these areas. Reviewing your credit report can provide insights into what specific factors are affecting your score.

Can a credit report with a 380 credit score be obtained, and how?

Yes, regardless of your credit score, you’re entitled to a free credit report from each of the three major credit bureaus (Equifax, Experian, and TransUnion) once every 12 months via AnnualCreditReport.com. Obtaining and reviewing your credit report is crucial for understanding what’s impacting your score and identifying any errors that could be corrected to improve it.

What Interest Rate Can I Get With a 380 Credit Score?

Borrowers with a 380 score can generally expect high interest rates on loans and credit cards. Credit scores directly affect the rate you can get. If you have a low score, lenders may consider you a credit risk. In order to reduce the risk of lending to someone with poor credit, lenders offer higher rates. This way, if the borrower defaults on the loan, the lender may still earn money from interest fees. But by working on improving your credit, you can eventually access lower rates and save money.

Can I Buy a House With a 380 Credit Score?

Buying a house with a score significantly lower than the average credit score is extremely challenging under conventional lending standards. Your mortgage options might be limited to certain types of government-backed loans, like FHA loans. However, even FHA lenders typically require a minimum score of 500, and you would need to make a 10% down payment if your score is between 500 and 579.

On the off chance you find a lender willing to work with you, expect to pay much higher interest rates and possibly additional fees. This can significantly increase the overall cost of the mortgage over its lifetime.