Who Has a 564 Credit Score?

While age isn't a direct factor in credit score calculations, there's a clear trend of scores improving over time. According to 2023 data, average FICO scores tend to rise with each successive generation, as consumers have more time to build a positive payment history.

• Generation Z (Ages 18-26): 680
• Millennials (Ages 27-42): 690
• Generation X (Ages 43-58): 709
• Baby Boomers (Ages 59-77): 745
• The Silent Generation (Ages 78+): 760

Credit Cards With a 564 Credit Score

A credit score of 564 is considered poor, which can significantly impact your ability to qualify for a credit card. Lenders generally view applicants 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.

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Auto Loans and a 564 Credit Score

A 564 credit score places you in the subprime category, which means that while you can still get an auto loan, you will likely face higher interest rates.

Lenders view this score as a higher risk, resulting in less favorable loan terms and a more expensive loan over its lifetime.

To give you a clearer picture, here are the average auto loan interest rates by credit score bracket for new and used vehicles:

• Super-prime (781-850): 5.25% for new cars and 7.13% for used cars
• Prime (661-780): 6.87% for new cars and 9.36% for used cars
• Non-prime (601-660): 9.83% for new cars and 13.92% for used cars
• Subprime (501-600): 13.18% for new cars and 18.86% for used cars
• Deep subprime (300-500): 15.77% for new cars and 21.55% for used cars

Mortgages at a 564 Credit Score

With a 564 credit score, your mortgage options are limited but not nonexistent. This score is considered 'poor,' which generally disqualifies you from conventional or jumbo loans. Your most viable path is likely an FHA loan, a government-insured mortgage with more lenient credit score requirements. While the FHA program accepts scores down to 500, individual lender approval is still required and not guaranteed.

A 564 score directly impacts your loan terms. For an FHA loan, you must provide a down payment of at least 10%, a significant jump from the 3.5% minimum for applicants with scores over 580. You will also face higher interest rates and mortgage insurance premiums, increasing the total cost of borrowing significantly over the life of the loan.

What's in a Credit Score?

While the exact formulas used by credit bureaus are proprietary, your score is generally determined by a handful of common factors.

• Your payment history tracks whether you've paid past credit accounts on time.
• Credit utilization is the percentage of your available credit that you are currently using.
• The length of your credit history considers the age of your oldest account, newest account, and the average age of all your accounts.
• Credit mix refers to the variety of credit products you have, such as credit cards, retail accounts, and loans.
• New credit inquiries note how often you apply for and open new accounts.

How to Improve Your 564 Credit Score

Improving your credit score is achievable through consistent effort and strategic actions. There are proven methods to boost your creditworthiness and build a healthier financial profile over time.

• Monitor your credit reports. A 564 score might be dragged down by errors, and checking your reports allows you to spot and dispute inaccuracies for a potential score increase. This also helps you track your progress and protect against identity theft that could further damage your score.
• Set up automatic bill payments. Since payment history is the most significant factor in your score, automating payments is the best way to ensure you never miss a due date. This prevents the late payments that are likely contributing to your current score and starts building a positive track record.
• Reduce your credit utilization ratio. High balances relative to your credit limits heavily impact your score, so aim to keep your utilization below 30%. Paying down debt demonstrates responsible credit management to lenders, which is critical for raising a 564 score.
• Become an authorized user. If a trusted friend or family member has excellent credit, being added to their account can help repair your score. Their positive payment history and low credit utilization will appear on your credit file, helping to build a better profile.

For help maximizing rewards and making smarter spending decisions on your credit-building journey, let Kudos guide you.