The 500s: The Climb Begins

A score in the 500s is subprime but workable. Some cards and loans approve here at rough prices. The goal is the 580-670 boundary, where FHA mortgages and normal auto lending start opening up.

Why it matters

The 500s are where consistency pays fastest. Twelve clean months at this band can move you past boundaries that change what you pay for everything.

Key facts

• 580 is the common FHA minimum for 3.5% down; many auto lenders draw lines near 600-620.
• Two factors dominate at this band: payment streak and utilization.
• Store cards and subprime cards approve easily here but often carry high fees; read the fee schedule before applying.
• Keeping total card utilization under 30% is the common guidance; under 10% is stronger.
• Each new hard inquiry matters slightly more on a weak file than a strong one.

In practice

1. Get every card under 30% of its limit, then under 10% on the card that reports next.
2. Set a 12-month streak goal: zero lates, zero new collections.
3. Apply for new credit only when it serves the plan, not the discount at the register.
4. Track the score monthly and note which actions moved it.