By CreditNinja Reviewed by Matt Mayerle
Published on March 8, 2024

According to most credit scoring models, a 505 credit score is considered bad credit.

Consumers with credit scores within the “bad” range may have trouble finding approval for certain types of loans or have to deal with other financial hardships.

However, there are some basic steps bad credit consumers can take to start increasing their scores right away. Here, you’ll learn how a 505 credit score can appear on your credit reports, what that means for your credit history, and how you can start working towards improvement and achieving a good credit score!

Key Takeaways for a 505 Credit Score

Overview of Your
Credit Rating

505 is considered a "very poor" or "bad" credit score. Scores between 300 - 579 are typically labeled as bad credit

Borrowing Options With a 505 Credit Score

Consumers with a 505 credit score, unfortunately, may not have many affordable financing options. Bad credit loans and payday loans are available but should be used cautiously

Improving a 505
Credit/FICO Score

Working on payment history, paying off debt, limiting new credit inquiries, and improving credit utilization can help raise a 505 credit score.

Is a 505 Credit Score Good?

505 is a part of the lowest credit score tier, indicating the consumer has a poor credit history. Consumers with FICO credit scores between 300 - 579 are a part of the "bad" credit score tier. Typically, the average FICO credit scoring model labels scores between 800 and 850 as "excellent" credit, scores between 740 and 799 as "very good" credit, scores between 670 and 739 as "good" credit, scores between 580 and 669 as "fair" credit, and lastly, scores between 300 and 579 as "poor" credit.

What Can You Get Approved for With a 505 Credit Score?

Personal Loans

A personal loan is an installment loan available to borrowers with almost any credit score. However, the lowest terms, higher loan amounts, and most convenient repayment terms are reserved for borrowers with a credit history in good standing. 

Personal Credit Builder Loan

There are also bad credit personal loans, which is funding explicitly designed for consumers with a poor credit score. When used responsibly, this type of funding can act as a credit builder loan and help consumers improve their credit scores. All you have to do is pay back the loan in full and on time!  

Bank Loans

Bank loans are a traditional type of funding commonly used for debt consolidation or large purchases. Since banks are conventional lenders, they typically only work with consumers with excellent credit. So, if you’re looking for a bank loan with a 505 credit score, you may want to work on improving your credit before applying. 

Credit Union Loans

Borrowers with poor credit scores may have more luck finding approval for a loan with a credit union over a bank. Unlike banks, credit unions are nonprofit organizations owned and operated by their members. In order to get a personal loan through a credit union, you will have to become a member. 

Secured vs. Unsecured Credit Card

You may also choose to opt out of getting a loan altogether and cover your expenses with a credit card instead. Traditional credit cards, otherwise known as unsecured credit cards, operate as a revolving line of credit where the borrower’s credit limit is renewed at the end of each billing cycle. While this system can seem convenient on the surface, it’s also extremely easy to slip into bad habits and rack up unaffordable debt. 

Secured Credit Card

To avoid the risk of credit card debt, credit card applicants with bad credit scores may want to look into a secured credit card account. With secured credit cards, borrowers prepay their credit limit at the beginning of their billing cycle. That way, they can benefit from the increase in their available credit without having to deal with owing more than they can afford. 

Car Loans

Consumers can use car loans if they are specifically looking to purchase a vehicle. Although, similar to other types of loans, better rates and terms are typically only available for borrowers with a good or average credit score. So, if you’re looking to buy a car with bad credit, you should be prepared to shop around and compare offers so you can find the best deal. 

Payday Loans

Borrowers with unfavorable credit scores often seek out payday loans because they are so easy to get approved for. However, what a lot of borrowers don’t realize is that payday loans are an extremely expensive way to borrow money. In fact, according to the Financial Health Network, the majority of Americans will pay about $520 in fees just to borrow $375 over five months.1 So, unless you can repay your full balance within about fourteen days or less, you should probably steer clear of payday loans. 

Products to Help Improve a 505 Credit Score

Credit Counseling

If you have no idea where to start when it comes to keeping track of your credit accounts, credit reports or improving your credit scores, a credit repair company may be able to help you out. Check out a brief overview of some free and paid credit counseling services available throughout the United States below: 



Services Offered 


Contact Info

National Foundation for Credit Counseling

Mortgage, student loan, bankruptcy counseling

Paid services 


Phone: 800-388-2227

Financial Counseling Association of America

Debt and credit counseling



Phone: 800-450-1794

American Consumer Credit Counseling

Credit and budget counseling, debt management plans (DMPs)

Counseling: Free, DMPs: Paid


Phone 800-769-3571

GreenPath Financial Wellness

Debt and budget counseling, bankruptcy counseling, DMPs

Counseling: Free, Other services: Paid


Phone: 800-550-1961

Money Management International

24/7 counseling online or over the phone, DMPs

Counseling: Free, DMPs: Paid


Phone: 866-889-9347

Disclaimer: Please note that the information provided in the table above is a general comparison and may not reflect the most current services, fees, or contact details for each organization. For the most accurate and up-to-date information, it is recommended to directly consult the official websites or contact the respective credit counseling services.

Instant Credit-Boosting For Consumers With a Poor Credit Score  

  • Experian Boost – records on-time payments for commonly unreported accounts, such as rent or subscription services 
  • Grow Credit – issues users a special MasterCard to help improve their credit utilization rate
  • TurboTenant – records rent payments for your credit reports 


On your journey towards improving your credit score, you’ll want to keep your recurring payments and financial responsibilities on track. You can keep this record on your own using a notebook or spreadsheet on your computer, or you can take the digital route and try a budgeting app. Some popular apps you may consider are: 

  • EveryDollar
  • Goodbudget
  • YNAB (You Need a Budget)
  • Honeydue
  • PocketGuard
  • Empower Personal Wealth

Credit Monitoring

It may be worth using a credit monitoring service to ensure your credit stays on track while you work on improvement. There are both free and paid services that can review your credit reports and inform you of any suspicious activity. That way, you won’t have to worry about situations like identity theft or credit fraud going unchecked and bringing down your score for no reason. 

Check Your Credit Reports Often

While using a credit monitoring service can be helpful, it’s also important to check your credit report on your own as often as you can. You may access a free credit report from each of the three credit bureaus at least once a year, or you can pull a soft credit check on your own as often as you like. By checking your reports regularly, you can also see how your current habits are affecting your credit score, allowing you to keep up the good financial habits and ditch the bad ones.

Benefits of Improving Your 505 Credit Score

There are essentially no negative consequences to improving your credit history. In fact, consumers can enjoy tons of benefits when they improve their credit scores. Some perks you may look forward to are: 

  • More loan options – with a higher score, you won’t have to stress about meeting minimum credit score requirements! 
  • Easy access to cash – lenders will often send pre-approval opportunities to consumers with good credit, which means a shorter application process. 
  • Better deals – since you’re not as much of a lending risk with a good credit score, lenders are more likely to approve you for lower interest rates and more convenient loan terms. 

How To Improve Your 505 Credit Score

Familiarize Yourself With Your Credit History

To start improving a 505 credit score, it’s essential to understand how your score got there in the first place. That’s where your credit reports come in. A credit report is an official record containing data on your personal finance habits and accounts. This data comes directly from your lenders and creditors, most of whom report directly to the three major credit bureaus: Experian, Equifax, and TransUnion

Data from five different categories are compiled on your credit report, which work together to determine your credit score. Those categories are: 

  • Payment history – makes up 35% of your score 
  • Debts – makes up 30% of your score
  • Length of credit history – makes up 15% of your score
  • Mix of credit accounts – makes up 10% of your score 
  • New credit account inquiries – makes up 10% of your score 

Make Your Due Payments On Time

Since payment history has the biggest impact on consumer credit scores, paying all your bills and loans on time is crucial for anybody who wants to see improvement. According to a survey from Lists With Clever, the top reason why consumers missed a due credit card payment is because they simply forgot.2 If that sounds like you, you may want to consider signing up for automatic payments. With autopay, your due payments will be automatically deducted from your checking account, allowing you to keep up with your various payments without having to remember to submit them manually.  

Hold Off On New Loans and Credit Cards

Try to hold off on applying for new loans or credit cards while you are working on improving your credit scores. Instead of gravitating towards applying for new credit, ask yourself if there are other options available when you find yourself looking for extra cash. Consider solutions like: 

  • Using funds from your savings account 
  • Getting a part-time job for a while to earn extra income 
  • Try a no-spend challenge to free up extra room in your existing budget

FAQs About 505 Credit Scores

Yes, you can qualify for a secured credit card even with a 505 credit score, which can be a more accessible option than a personal loan. Using secured credit cards responsibly and paying the balance on time can positively affect your average credit score by building a history of on-time payments.

Prioritize negotiating with creditors to remove collections accounts from your credit report in exchange for payment, a practice known as “pay for delete.” This can directly improve your credit score by removing negative marks.

Having a co-signer with a good credit score can improve your chances of being approved for loans and credit cards, which you can then use to build a positive credit history. However, ensure timely payments to avoid negatively impacting both you and your co-signer’s credit scores.

What Interest Rate Can I Get With a 505 Credit Score?

While there are different state laws that regulate interest rates throughout the country, finding low-interest rates on personal loan products may not be possible with a 505 credit score. Instead, consumers with bad credit scores may have to deal with higher rates until they can improve their credit. 

Can I Buy a House With a 505 Credit Score?

Buying a house when you have a low credit score may be difficult as mortgage lenders are unlikely to work with high-credit-risk consumers. While a mortgage is typically considered a good type of credit account by most major credit bureaus, renting can come with other benefits, such as: 

  • Flexibility: If you decide to relocate, you can just wait for your lease to end and move, no strings attached! Or, if you get a higher-paying job and have to move, you can most likely break your lease for a fee and leave whenever you like. 
  • Less money upfront: To buy a home, you will have to contribute a down payment, which can be thousands of dollars or more. Landlords, on the other hand, may just require a security deposit, which is usually one month’s rent upfront.  

Depending on your financial situation, it may be more affordable to rent your home while you work on improving your credit report and look into buying a home once you have a higher credit score.  


Top 5 Resources for a 505 Credit Score

Related Credit Scores

500  501  502  503  504  505  506  507  508  509  510