By CreditNinja Reviewed by Matt Mayerle
Modified on May 15, 2024

A 545 credit score is considered a poor credit score. Having a 545 score can make finances difficult, and you may find that your financial agency is limited. 

However, you are not alone; according to Experian, about 16% of borrowers have a credit score in the poor range.¹ 

Because of this, you can still expect solutions that are catered to this score, whether you need to borrow money or are trying to improve your credit. Below, we’ll go over some of these and give you an overview of a 545 credit score. 

Key Takeaways for a 545 Credit Score

Overview of Your
Credit Rating

A 545 credit score is poor credit. With this score, navigating financial endeavors may be challenging

Borrowing Options With a
545 Credit Score

A 545 score will be limiting when it comes to borrowing options, but there are loans and some credit cards that may work.

Improving a 545
Credit/FICO Score

With a 545 credit score, you definitely want to work on improving things. Positive actions like paying your bills on time and being mindful of your credit mix will help.

Is a 545 Credit Score Good?

A 545 credit score is not a good score; it's a very poor score in the lowest range of credit. However, improving your credit score is possible, and many people just like you are working on getting a higher credit score from this range.

What Can You Get Approved for With a 545 Credit Score?

Borrowing money can be difficult with a 545 credit score because you will look like a large credit risk to lenders. That being said, below, we’ll go over some popular loan choices and what you may be able to do to increase your chances of approval. Additionally, we’ll go over some potential loan types that may be available for borrowers in this credit score range.

Personal Loans

Personal loan options are usually unsecured loans that people take out for a wide variety of reasons. Common uses for a personal loan include paying medical bills, car repairs, and home improvement. While there are personal loan lenders who cater to bad credit—a personal loan with 500 credit score or so may be possible— but being in the lowest range can be challenging. Applying for pre-approval will give you an idea of what lenders may be willing to offer you funding. Adding a cosigner to a loan application can also help your chances. 

Bank Loans

Bank loans can be any loan that comes from a bank. A few loan types that can fall under bank loans are personal loans, credit cards, home equity loan options, and mortgages. Unfortunately, banks can be pretty strict with their credit score requirements, so applicants with very poor credit will likely not be able to borrow from them. But just like any other loan option, adding a cosigner who has good credit may help your chances. 

Credit Cards

Credit cards are widely used for all kinds of purchases and expenses. Lots of people like the convenience and ease of credit cards. There are all kinds of credit cards available, even some for poor credit scores. The funding amount won’t be as high as someone who has good credit, but you may still be able to secure some funding. 

Car Loans

Car loans are secured loans that help people purchase a new or used vehicle. Being in the very bad credit score category can make it tough to secure a car loan; however, it may not be impossible. Two reasons for this may be the numerous lenders out there and the fact that borrowers can provide a higher down payment to offset their poor credit scores. 

Bad Credit Loans 

Bad credit loans are exactly what they sound like, loans built for bad credit borrowers. Examples include payday loans and other quick cash loans. While these may be a solution when you need emergency cash with a poor credit score, they may be difficult to pay back. This is because they are usually very short-term and come with extremely high interest rates. 

Products To Help Improve a 545 Credit Score

Improving your credit score is possible, and you don’t have to do it alone! Here are some products that can help you improve your credit score:

Credit Builder Loans or Secured Credit Card Options

Credit builder loans and secured credit card options can be helpful tools when trying to build a payment history without classic credit accounts. These options are built for bad credit, and unlike a traditional loan or credit card, you won’t get the funds upfront. Instead, those funds from the secured credit card or credit builder loan are put aside until you pay the lender the full amount. Each payment you make should be reported to at least one credit bureau. And so, with on-time payments, you can build a positive payment history—significantly helping your credit.

Budgeting Apps

Budgeting apps can be a great tool to help you improve your credit score, it can also help your overall finances. A budget can help you take a close look at your financial habits, including spending, savings, debt management, and more. With this tool, you can focus on actions that can improve your credit scores, such as building a positive payment history. Below are some budgeting apps that can help:

 

  • YNAB (You Need A Budget) — Uses zero-based budgeting to allocate every dollar, focusing on reducing debt and saving.
  • PocketGuard — Helps identify where you can save money by analyzing your spending patterns, bills, and subscriptions.
  • EveryDollar — Applies a zero-based budgeting approach, ideal for straightforward budgeting and debt reduction.
  • Goodbudget — Digital envelope system for budgeting, perfect for sharing budgets with family or partners.
  • Personal Capital — Combines budgeting tools with investment tracking, suitable for wealth and retirement planning.
  • Simple — Banking app with built-in budgeting features, integrating spending tracking with your bank account for ease.

Credit Monitoring Services 

Credit monitoring services will alert you to any changes in your credit history (which is listed on each credit report from each credit bureau). This can be extremely helpful for keeping track of how your actions impact your credit scores or for detecting mistakes. These services can also help alert you to identity theft. 

Benefits of Improving Your 545 Credit Score

Here are some benefits that can come with improving your credit scores:

An Easier Time Getting Funding 

With a high credit score, you’ll have a much easier time getting approval for a loan or credit card. This can be extremely helpful when you need funding for an emergency or if you have a planned purchase in mind. 

The Ability to Personalize Financial Products and Services 

Multiple credit accounts make up your credit history and are important for building your credit and improving your credit mix. However, not all debt is good debt, and not all debt may be manageable. This is where personalization comes in. When you have fair or good credit, you’ll have more opportunities to find a credit account that best fits your needs, and you may be able to negotiate better terms. 

The Best Loan Offers and Credit Card Rewards 

The higher your credit score, the better loan offers and credit card rewards you may get! This can be a huge help when you do need to borrow money, as you’ll be able to get better loan offers and better rewards with credit cards. This may mean a lot of savings and perks when borrowing money. 

An Easier Time Renting or Buying a Home 

Another advantage that may not be immediately apparent is the ease of renting or buying a home. With a higher credit score, you’ll have an easier time completing rental and mortgage applications. 

How To Improve Your 545 Credit Score

There are several things you can do to improve your credit scores; here are some tips:

Learn More About the Factors that Can Influence Your Credit Scores

Educating yourself is so important when it comes to improving your credit. When you know about all the different factors that affect credit, you can ensure that you’ll be mindful of the actions you take. Lack of financial literacy is one of the many reasons why some people end up in the very poor category. Turn to trusted books, blogs, podcasts, and even courses to help you get started. 

Pay Off Your Debt 

Debt can impact several aspects of your credit, including your ability to pay bills, credit utilization, and credit mix. In most scenarios, paying off debt will help your credit scores and your overall financial situation. 

Pay Your Credit Accounts on Time 

Payment history is the most significant factor in determining your credit scores, so the best thing you can do for them is to pay your bills—specifically your credit accounts on time!

FAQs About 545 Credit Scores

Increasing your credit limit can positively affect your credit utilization rate, a key factor credit bureaus consider. With a 545 credit score, start by using your current credit card accounts responsibly for several months, then request a credit limit increase. Demonstrating on-time debt payments and improved financial behavior can make lenders more willing to consider your request.

FICO credit scores and FICO scores are terms often used interchangeably to describe the scores created by the Fair Isaac Corporation used by lenders to evaluate credit risk. With a 545 credit score, obtaining favorable terms on auto loans may be challenging, but lenders specializing in bad credit financing can offer options, albeit at higher interest rates. Improving your score is crucial for better loan conditions.

Yes, such a company can assist in disputing inaccuracies on your credit report with the credit bureaus, potentially improving your credit score if negative items are successfully removed. However, for long-term improvement, focus on building a positive credit history through consistent, responsible financial behavior. Also, do tons of research on a company before working with them.

Transitioning to an unsecured credit card involves building a positive credit history with your current secured loan or credit card by making on-time payments and keeping balances low. After a period of responsible use, you can apply for an unsecured credit card, which may positively impact your credit score by diversifying your credit mix and demonstrating creditworthiness to credit bureaus.

Managing installment credit effectively involves making on-time payments, maintaining a low credit utilization rate on revolving accounts, and avoiding the opening of new accounts too frequently. Consistently applying these strategies can gradually improve your credit score, as it shows credit bureaus your commitment to responsible credit management.

What Interest Rate Can I Get With a 545 Credit Score?

Interest rates for a 545 credit score will be very high. This is because the lender is taking a risk by giving out funds to a borrower who may likely be delinquent with payments. However, as you improve your credit score, you’ll see those interest rates go down. 

Can I Buy a House With a 545 Credit Score?

For most people, buying a home means securing a mortgage loan. However, a 545 credit score will make it extremely challenging to secure a conventional mortgage. There are other mortgage types that are a lot more flexible with credit; check them out below:

Loan Type

Minimum Credit Score Typically Required

Flexibility for Lower Scores

Notes

FHA Loans

500 with 10% down payment

Some discretion for lenders, but very rare under 500

Primary home purchases only, Mortgage Insurance Premium (MIP) required

VA Loans

Varies (620 for most lenders)

Flexible, but approval below 620 is rare and based on lender discretion

For veterans and active military, no down payment or PMI required but a funding fee is charged

USDA Loans

Varies (640 for most lenders)

Flexible, approval below 640 possible under certain conditions

For rural and suburban homebuyers, no down payment required but income limits apply

As you can see, while these are more flexible than conventional mortgages, two-thirds of them require at least a fair credit score. So, if you want to secure a mortgage, your best bet is to improve your credit. 

Top 5 Resources for a 545 Credit Score

Related Credit Scores

520  524  525  530  535  550  555  560  565  570

References:

  1. 545 Credit Score: Is it Good or Bad? | Experian
  2. What Credit Score Do You Need To Buy A House? | Rocket Mortgage