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563 Credit score: What You Need to Know in 2025
July 1, 2025
TL;DR
A 563 credit score is a foundational starting point, presenting a clear opportunity for building a stronger financial future. According to the FICO model, this score falls within the "Poor" range, which highlights specific areas where you can focus your efforts for improvement.
What Does a 563 Credit Score Mean?
A 563 credit score places you in the "poor" range on the FICO Score model, which runs from 300 to 850. Lenders generally consider scores between 300 and 579 to be indicative of a high-risk borrower, often stemming from a history of payment issues or other credit missteps. This score acts as a quick summary of your credit health, signaling to potential creditors that you may have difficulty managing debt.
From a financial perspective, a 563 score can create significant hurdles. You may struggle to get approved for new loans or credit cards. If you are approved, the terms will likely be unfavorable, including much higher interest rates and stricter conditions. While this score presents immediate challenges, it is not a permanent label and can serve as the baseline from which a stronger credit history can be built over time.
Who Has a 563 Credit Score?
According to 2023 data from Experian, there is a clear trend of credit scores improving with age. The average FICO score for each generation breaks down as follows:
- Ages 18-26 (Generation Z): 680
- Ages 27-42 (Millennials): 690
- Ages 43-58 (Generation X): 709
- Ages 59-77 (Baby Boomers): 745
- Ages 78+ (Silent Generation): 760
Credit Cards With a 563 Credit Score
A credit score of 563 is considered poor, which can significantly impact your ability to qualify for a credit card. Lenders generally view scores in this range as high-risk, making it challenging to get approved for traditional, unsecured cards with favorable terms. Consequently, your options will likely be limited to secured credit cards or specific subprime cards that come with higher interest rates and lower credit limits.
Kudos can help you find the right card for your financial situation with its AI-powered tools that personalize recommendations based on your unique needs and spending habits. The platform analyzes your preferences to match you with suitable options from a database of nearly 3,000 cards, providing insights into how a new card might impact your credit score.
Auto Loans and a 563 Credit Score
A 563 credit score places you in the subprime borrower category, which lenders view as a higher risk. Consequently, you can expect to be offered auto loans with significantly higher interest rates than applicants with good or excellent credit.
Here are the average auto loan rates by credit score bracket for new and used cars:
- Super-prime (781-850): 5.25% for new cars, 7.13% for used cars
- Prime (661-780): 6.87% for new cars, 9.36% for used cars
- Non-prime (601-660): 9.83% for new cars, 13.92% for used cars
- Subprime (501-600): 13.18% for new cars, 18.86% for used cars
- Deep subprime (300-500): 15.77% for new cars, 21.55% for used cars
Mortgages at a 563 Credit Score
A 563 credit score places you in the "poor" credit range, limiting your mortgage choices. Conventional loans are generally out of reach, as lenders typically require a score of at least 620. Your most viable option is likely an FHA loan, which is designed for borrowers with lower credit. While VA and USDA loans are also government-backed, most lenders for these programs prefer higher scores.
Securing a loan with this score comes with stricter conditions. Expect higher interest rates and more thorough underwriting. For an FHA loan, a score below 580 requires a minimum down payment of 10%, compared to the 3.5% for higher scores. Lenders will also closely examine your income and overall financial health to mitigate risk.
What's in a Credit Score?
Figuring out what goes into your credit score can feel like trying to solve a complex puzzle, but it generally boils down to a handful of key elements. The most common factors include:
- Your payment history, which tracks whether you pay your bills on time, is the most significant factor.
- Credit utilization, or the amount of credit you're using compared to your total available credit, also plays a major role.
- The length of your credit history demonstrates your experience with managing credit over time.
- Having a healthy mix of different types of credit, such as credit cards and installment loans, can positively impact your score.
- Finally, recent credit inquiries, which occur when you apply for new credit, are also taken into account.
How to Improve Your 563 Credit Score
Your credit score plays a vital role in your financial life, but a low score isn't a life sentence; there are proven methods to improve your creditworthiness. With consistent effort, you can boost your 563 score and build a healthier financial profile.
- Monitor your credit reports. A 563 score could be dragged down by errors or inaccuracies, and regularly checking your reports allows you to spot and dispute them. This also helps you track your progress and ensure no fraudulent activity is hurting your score.
- Establish automatic bill payments. Payment history is the single most important factor in your credit score, and late payments can be devastating. Setting up automatic payments ensures you never miss a due date, which is a critical step in rebuilding your credit from a poor score.
- Reduce your credit utilization. High credit card balances relative to your limits can significantly lower your score. Paying down your balances to keep utilization below 30% shows lenders you can manage credit responsibly, providing a potentially quick boost to your score.
- Apply for a secured credit card. With a poor credit score, getting approved for traditional credit can be difficult, but a secured card is an accessible tool designed for this situation. It requires a cash deposit as collateral and helps you build a positive payment history as you make on-time payments.
Using a smart wallet tool like Kudos can help you use your cards more effectively on your credit-building journey.
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