As mentioned above, a 516 FICO® Score is considered “Very Poor”. This is typically a result of situations such as:
Approximately 16% of all consumers in America have FICO® Scores in the “Very Poor” range (516-579).
With a 516 FICO® Score, you’ll struggle to obtain credit cards & loans. For the credit you do happen to secure, unfortunately it will come with extremely high interest rates.
To improve your credit score, you need to focus on fixing the underlying factors.
Not sure where to start? A dedicated credit repair agency, like us, can work with you to ensure you’re maximizing all avenues when it comes to improving your score.
As mentioned previously, a 516 credit score is considered “Very Poor”. So your lending options are going to be extremely limited.
In most cases, your lending applications will be rejected. For loans/credit you are approved for, you will often need to pay extra fees or deposits, and you will have the highest interest rates.
In most cases, your lending applications will be rejected with a 516 credit score. But in cases where you are approved, unfortunately you will pay the highest interest rate tiers.
These higher interest rates can cost you thousands of dollars in added interest over the lifetime of your loans, in comparison to if you had a “Good” credit score.
We highly recommend you take the necessary steps towards repairing your credit, and securing a better financial future for yourself.
If you're looking to build your credit score from scratch or repair past mistakes, it can be a daunting process. Consider getting a secured credit card which needs an upfront deposit acting as a collateral for your spending.
To use the secured credit card to boost your credit score, select a card with affordable fees and interest rates. Ensure to make on-time payments and maintain a low utilization rate (the amount spent versus your available credit). As time progresses, your credit score will gradually improve, and you could receive an upgrade to an unsecured credit card.
Staying informed about your credit score is paramount to maintaining good credit health. Fortunately, there are numerous free ways to keep track of your score. Many banks and credit card companies provide complimentary credit score monitoring to their clients, and you can opt for a free credit monitoring service like Credit Karma or Credit Sesame.
It's essential to monitor your credit score frequently to detect any mistakes or fraudulent activity. If you spot any inaccuracies, you can report them to the credit bureaus. Additionally, monitoring your credit score can help recognize areas where you need to enhance your credit, such as paying down debts or paying bills on time.
The chances of securing a mortgage with a 516 credit score are extremely low unfortunately. Is it possible? Maybe, but it generally isn’t a wise idea with such a low credit score.
Why? Because you’ll end up paying thousands of dollars in extra interest over the life of the loan.
Instead, we recommend focussing on improving your credit score, to at least 580-669 (which is considered “Fair”, or ideally 670+. Once you’ve increased your score, you’ll be in a much better place to apply for a mortgage.
With a 516 credit score, you’ll be considered a “deep subprime borrower”, which is the lowest credit tier. There may still be auto loan options for you, but they’ll be a lot more difficult to come by, and you will pay higher interest rates.
Unfortunately the theme continues here, with a 516 credit score, it is going to be difficult to obtain a personal loan (at least one with good interest rates). You may be tempted to deal with lenders that have a poor reputation, but we urge you not to.
The best thing to do is focus on improving your credit score, to the “Fair” range (between 580-669), which will put you in a significantly better position when it comes to applying for loans/credit.
Let’s face it, a 516 credit score is not good. Applying for any forms of lending will be very difficult & expensive.
You’ll pay higher interest rates, and often have substantial fees.
The best course of action (by far), is to improve your credit score first before you apply for loans. Not only will it open more doors for you, it will also save you a ton of money in the long run (due to lower interest rates).
Speak with a live credit specialist for your free consultation, now