What Is a Bad Credit Score?
5 Min Read | Last updated: July 10, 2026
This article contains general information and is not intended to provide information that is specific to American Express products and services. Similar products and services offered by different companies will have different features and you should always read about product details before acquiring any financial product.
“Bad” credit scores are more accurately described as below average, but credit scores aren’t permanent. There are plenty of ways to turn a score from bad to good.
At-A-Glance
- A credit score is only “bad” if it keeps you from qualifying for the loan or interest rate you want.
- People with credit scores labeled “subprime” (meaning below average) likely won’t qualify for good interest rates or may not be able to borrow at all.
- Credit scores aren’t permanent. With discipline and time, anyone may be able to improve their scores.
“Bad,” like beauty, is in the eye of the beholder, and it isn’t even a word that credit reporting agencies or lenders use. So, when you ask “What is a bad credit score?” the most accurate answer is any score that keeps you from qualifying for the credit card, loan, or interest rate that you’re seeking. In practice, there are some classifications to be aware of, as well as strategies you can employ to build stronger credit.
Bad Credit Scores Are Officially Subprime, Fair, or Very Poor
Although “bad” is not an official credit scoring term, there are certain words lenders and reporting agencies generally apply to specific credit score ranges, each of which has different implications for your ability to use credit to borrow money. There are two major credit scoring models, FICO® and VantageScore®, and they both report scores from 300 to 850. Though they break down their ranges slightly differently, they’re closely aligned. Let’s focus on FICO, which is the older model and more widely used in lending decisions.1 The FICO Score ranges are the following:
- Exceptional: 800-850
- Very Good: 740-799
- Good: 670-739
- Fair: 580-669
- Poor: <580
Americans’ average FICO credit score was 715 in 2025 and falls in the “good” range or the “prime” range, according to the Consumer Financial Protection Bureau.2,3 When you hear “subprime” used to describe credit scores, it may mean below average. Lenders usually consider any score under 670 subprime and might anticipate that people with subprime scores may struggle to repay what they borrow.4
So, you may consider it fair to call a subprime credit score “bad.” And according to the Experian credit reporting company, approximately 29.1% of people have subprime FICO Scores, which means they generally may not receive favorable interest rates and may not be able to borrow at all.5
A Lower Credit Score Can Limit Your Options
A subprime credit score can mean different things, depending on your personal situation and financial goals. If you’re retired, own your home outright, and don’t need to borrow money, even a poor score may not make a difference to you. But if you’re trying to buy a home or need to borrow money to replace a broken refrigerator, the picture may be quite different. Broadly speaking, bad credit scores may result in the following:
- Paying Higher Interest
Lenders may reserve favorable interest rates for customers with the highest credit scores because those scores tend to predict who is most likely to repay what they borrow. In practice, lenders charge subprime credit card borrowers an average APR of 29% compared to prime and superprime borrowers, who are charged an average of 23.1% according to 2025 data from the Consumer Financial Protection Bureau.6 If you pay off the balance on your credit card each month, higher interest rates may not matter much. But over the life of an auto loan or mortgage, a higher interest rate might cost you thousands of dollars and mean a higher monthly payment. - Challenges to Getting a Mortgage
Low credit scores may hurt approval chances or disqualify you from certain mortgage types. And if you do qualify, it may cost you more in interest. - Other Difficulties
It may be harder to get approved for an apartment lease, utility service, or mobile phone contract, for example. Or you may qualify only if you make a deposit. You may also have to pay higher premiums for insurance.
If your current credit score is subprime and the consequences sound bleak, there are still good reasons not to be discouraged. Remember, credit scores aren’t destiny. You can take action to improve your credit score.
Tips for Improving Your Credit Score
Improving your credit score doesn’t happen overnight. Negative marks, like late payments, can stay on your credit report for as long as seven years.7 But with discipline and diligence, you might improve the score over time. The following tips could help:
- Pay Bills on Time
35% of your FICO Score is shaped by your payment history, so on-time payments can make a big difference. If your memory isn’t a strong suit, setting up automatic payments is one way to stay current. - Keep Balances Low
Credit utilization, or how much of your available credit you use, is the second most important factor in shaping your credit score. Many experts recommend keeping your balances below 30% of your total credit limit, but the lower the better.8 - Build Good History
Think carefully before closing credit card accounts. Lenders value credit history. Assuming you keep your account in good standing, the longer you have it, the more it helps your score. - Mix It Up
Lenders want to see that you can effectively manage different kinds of credit. Include credit cards, personal loans, auto loans, and mortgages in the types of credit you use. - Apply for Credit Carefully
Every time a creditor pulls your report for the purposes of making a lending decision, it’s called a hard inquiry, which can (temporarily) ding your score. - Explore Different Credit Options
If you’re not able to qualify for a standard credit card or get a personal loan from your bank, there are other financial products that might help you build credit. Some are designed specifically to help people with poor credit or no credit. One option is a secured credit card. It requires a security deposit, which serves as your credit limit, but otherwise performs the same function as a regular credit card. - Know Where You Stand
Review your credit report regularly. It’s easier to develop an improvement plan if you have a clear understanding of what’s helping or hurting your score. And a regular review may help you spot errors or signs of fraud on your report, either of which could potentially keep you from a good or excellent score.
Frequently Asked Questions
The easiest credit card to get with bad credit is a secured credit card. These types of cards are specifically designed for people who are building or rebuilding their credit. As such, they have lower credit requirements that make it easier to get approved.
Just because your credit score hasn’t reached the 700 mark doesn’t mean you have bad credit. In fact, based on the FICO scoring scale, a 670 qualifies as good credit. With that score, you may be able to qualify for financial products with affordable interest rates and favorable terms.
Securing a 200-point jump in your credit score can take years to achieve. The process of repairing your credit may involve paying off accounts in collection, removing reporting errors, building positive payment history, and paying down debt. All of these actions take time. It can take six months to a year of on-time payments to create a significant change in your score. It can also take 3-6 months to remove reporting errors that may drag your score down.
The Takeaway
A bad credit score is one that keeps you from qualifying for the loan or interest rate you want. For most people, a score of 669 or less, which lenders regard as subprime, qualifies as a “bad” score. But credit scores are not permanent, and taking strategic action might help you improve your score over time.
1 “What is a FICO Score?,” myFICO
2 “Average US FICO Score Drops to 715,” FICO
3 “Borrower Risk Profiles,” Consumer Financial Protection Bureau
4 “What Does Subprime Mean?,” Experian
5 “How Many Americans Have an 800 Credit Score or Greater?,” Experian
6 “The Consumer Credit Card Market,” Consumer Financial Protection Bureau
7 “How long does information stay on my credit report?,” Consumer Financial Protection Bureau
8 “How do I get and keep a good credit score?,” Consumer Financial Protection Bureau
Allan Halcrow is a freelance writer concentrating in business, human resources, and diversity and inclusion. He is also the author of four books on management.
All Credit Intel content is written by freelance authors and commissioned and paid for by American Express.
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