12 Best Loans & Credit Cards for 500 to 550 Credit Scores

12 Best Loans & Credit Cards for 500 to 550 Credit Scores
GUIDE

Advertiser Disclosure

Eric Bank
By: Eric Bank
Posted: November 7, 2019
Our popular “How-To” series is for those who seek to improve their subprime credit rating. Our articles follow strict editorial guidelines.

Credit scores are important numbers, as they help determine your ability to access credit and loans. The FICO 8 scoring system assigns individuals a score between 300 and 850, with 580 being the dividing line between fair and poor credit. In this article, we review the best loans and credit cards for folks with a 500 to 550 credit score.

It’s easy to have a poor credit score. Just a few mishaps, such as taking on too much credit, making payments late, or having a loan go into collection, can hurt your score to such an extent that you’ll have trouble accessing any credit at all. But it’s never too late to adopt responsible financial behavior that will improve your creditworthiness.

Part of rebuilding your credit score is to prove you can properly manage debt by reducing how much you owe as well as making all payments on time and in full. Of course, it’s hard to demonstrate creditworthy behavior if you can’t access credit.

Thankfully, even if your score is between 500 and 550, you can find specialized credit and loan sources, like the ones we review here, that can help you rebuild your credit.

Personal Loans | Credit Cards | Auto Loans | Home Loans | FAQs

Personal Loans: 500-550 Credit Score

Personal loans from the reviewed sources are available to folks with poor credit. These loans are handy when you need more cash than that available from a credit card cash advance. Terms on personal loans can range from a couple of weeks to several years.

You repay longer-term personal loans in equal-sized installments for a fixed number of months. Short-term personal loans may require a single repayment after two to four weeks.

Read on to learn about our picks for the best loan matching services offering loans to poor-credit consumers.

MoneyMutual is a service that finds you short-term cash advances of up to $2,500. These loans are ideal when you need cash to get you through to your next paycheck. If you qualify, you can receive loan proceeds deposited into your bank account in as little as 24 hours.

Lenders on the MoneyMutual network require that you receive a regular paycheck, Social Security payment, or another source of income. By demonstrating a reliable income source, you may overcome negatives like a low credit score, debt collection, loan default, or bankruptcy and obtain cash to bridge a temporary shortfall.

You can also arrange a longer-term installment loan, up to six months in length, from MoneyMutual. Unlike cash advances that you repay all at once, an installment loan lets you space out repayments in fixed amounts. To qualify for an installment loan, you’ll need to show an income of at least $800 per month and have a checking account.

If you can wangle it, you may prefer the bad credit installment loan from Money Mutual rather than the cash advance because the installment loan gives you more breathing room to repay it. If you are late repaying a cash advance, you will trigger late fees and other charges that can send you plummeting into a debt spiral.

   
★★★★★

4.7

Overall Rating

Loan Amount Interest Rate Loan Term Loan Example
$500 to $10,000 5.99% - 35.99% 3 to 72 Months

See representative example

CashUSA.com works with lenders who offer personal loan terms from three to 72 months on amounts as low as $500. These lenders routinely make loans to consumers with all types of credit. You may qualify if you have an after-tax income of $1,000 per month.

Longer-term personal loans have lower APRs than those you encounter with cash advances. This makes loans arranged by CashUSA.com more affordable and gives you time to repay the loan in manageable installments. You can expect to receive loan proceeds within a day or two after approval.

The lenders on the CashUSA.com network can offer personal loans up to $10,000. You’ll have to be 18 or older, a U.S. citizen or permanent resident, and the owner of a checking account. Lenders may have additional requirements. If you are offered a loan, the lender will specify the exact rates and terms.

Lenders will debit your checking account for each installment payment. You may be able to work out an extension if you don’t have enough cash in your account. Naturally, you should expect to pay extra fees if you need an extension. Nonetheless, an extension helps you avoid a black mark on your credit report for a late or missed payment.

CreditLoan can help you find a personal loan from $250 to $5,000, whatever your credit score. This lending service promises you an immediate response once you submit a loan request. If you’re approved, a lender will deposit your loan in your bank account in as little as one day.

CreditLoan has arranged loans since 1998 to more than 750,000 consumers. Naturally, the lender will set the terms and rates depending on your income and other factors. You can use the website’s loan calculator to estimate your monthly payments.

The lenders on the CreditLoan network specialize in loans for consumers with credit scores below 630. This lending service discourages applicants who are currently in bankruptcy proceedings or who already have an outstanding loan.

If you already have a credit card, getting a personal loan diversifies your credit mix. That’s a plus because it accounts for 10% of your credit score. In addition, your on-time installment payments can help build your credit.

Credit Cards: 500-550 Credit Score

If your credit score is in the 500 to 550 range, qualifying for a credit card is easier said than done. That being said, certain issuers specialize in offering credit cards to consumers with bad credit. These cards offer few frills, high interest rates and fees, and low credit limits.

Nonetheless, these credit cards provide folks with bad credit an opportunity to start rebuilding their credit. Check out the following three cards to see if one is right for you.

  • Easy application! Get a credit decision in seconds.
  • Build your credit history – Fingerhut reports to all 3 major credit bureaus
  • Use your line of credit to shop thousands of items from great brands like Samsung, KitchenAid, and DeWalt
  • Not an access card
  • Click here for official site, terms, and details.
★★★★★

4.8

Overall Rating

Application Length Interest Rate Reports Monthly Reputation Score
5 Minutes See issuer website Yes 9.0/10

If you are looking for an easy-to-obtain shopping account, check out the Fingerhut Credit Account. With this revolving account, you can charge purchases from online retailer Fingerhut.

This account reports your payments to the three credit bureaus. This gives you an important opportunity to bootstrap your credit score by paying your bills on time.

If you do not qualify for the Fingerhut Credit Account, the retailer will automatically consider you for a Fingerhut Fresh Start Installment Loan. If approved, you’ll be able to finance a Fingerhut purchase of $50 or more with a $30 down payment.

Typically, you have six to eight months to pay off your Fresh Start Installment Loan. Making timely payments will resound to your benefit on your credit reports, and should help elevate your credit score over time.

  • Checking account required
  • Fast and easy application process; response provided in seconds
  • A genuine Visa card accepted by merchants nationwide across the USA and online
  • Manageable monthly payments
  • If approved, simply pay a program fee to open your account and access your available credit
  • Reports monthly to all three major credit bureaus
  • Click here for official site, terms, and details.
★★★★★

4.7

Overall Rating

Application Length Interest Rate Reports Monthly Reputation Score
9 Minutes See terms Yes 8.5/10

The Total Visa® Card is one of the leading providers of unsecured Visa credit cards to consumers with poor credit. If you have a checking account, you can receive an approval within 60 seconds of submitting your application.

Not surprisingly, several fees are attached to the Total Visa® Card, including a one-time program fee, an annual fee, and after the first year, a monthly servicing fee and a cash advance fee. While no one likes fees, bear in mind that they provide the issuer the cash flow necessary to underwrite the riskiness of cardholders with bad credit.

If you need a cash advance, the Total Visa® Card requires the account to be open for at least 90 days or three billing cycles, whichever is later. You must have a clean record of repaying on time.

You may be considered for a higher credit limit after 12 billing cycles without late payments. You can request the limit increase, or the issuing bank may offer you one unsolicited. If approved, the limit increase will trigger a one-time fee.

  • Get the security and convenience of a full-feature, unsecured Visa® Credit Card – accepted at millions of merchant and ATM locations nationwide and online
  • Reporting monthly to all three major credit reporting agencies
  • Perfect credit not required for approval; we may approve you when others won’t
  • Easy and secure online application
  • If approved, pay a Program Fee and you can access the $300 credit limit (subject to available credit)
  • Click here for official site, terms, and details.
★★★★★

4.7

Overall Rating

Application Length Interest Rate Reports Monthly Reputation Score
10 Minutes See Terms Yes 8.0/10

Another solid credit card choice for consumers who have bad credit is the First Access Solid Black Visa Credit Card. You can apply for it if you’re age 18 or older, reside in the U.S., and have a checking account.

Fees include a one-time setup fee and an annual fee that declines in the second year. The monthly service fee and cash advance fees are waived for the first year.

The First Access Solid Black Visa Credit Card reports your payments to the three national credit bureaus. Making your payments on time and in full can help you rebuild your credit over time. By doing so successfully, you can eventually apply for a credit card without high fees.

Auto Loans: 500-550 Credit Score

Many car owners resort to title loans when they need quick cash. However, title loans are risky and expensive. A better way to obtain cash is to arrange cash-out refinancing for your car. The amount you can borrow is equal to the equity you have in your car, which is the difference between the car’s value and the current loan balance.

Alternatively, you can take out a new auto loan to purchase your next vehicle. Whether you choose cash-out refinancing or a new car loan, the vehicle serves as collateral for the installment loan and can be repossessed if you fail to make timely payments. The lending services we review here specialize in auto loans for consumers with bad credit.

  • Network of dealer partners has closed $1 billion in bad credit auto loans
  • Specializes in bad credit, no credit, bankruptcy and repossession
  • In business since 1999
  • Easy, 30-second pre-qualification form
  • Bad credit applicants must have $1500/month income to qualify
  • Click here for application, terms, and details.
★★★★★

4.9

Overall Rating

Interest Rate In Business Since Application Length Reputation Score
3.99% - 29.99% 1999 3 minutes 9.5/10

It’s hard to find a conventional lender who will approve vehicle loans when your credit score is in the 500 to 550 range. Auto Credit Express helps fill the gap left by banks, credit unions, and other lenders for auto-loan consumers with bad credit.

Auto Credit Express works with a network of car dealers who are willing to extend loans when others won’t. Their business has withstood the test of time, having provided more than $1 billion in bad-credit loans since 1999.

You can prequalify for an auto loan from Auto Credit Express in less than a minute. You must be a U.S. citizen earning $1,500 a month in pretax income. Of course, you must also have a driver’s license.

Auto Credit Express specifically markets to borrowers with no credit, bad credit, repossessions, or bankruptcies. The final loan approval, rates, and terms will depend on which auto dealers respond to your loan request.

Car.Loan.com has been helping to arrange bad-credit auto loans since 1994. It makes it easier to shop for a car loan by allowing you to fill out a short finance request form. Your information will be matched with the right dealer who will decide whether to approve your request.

The large Car.Loan.com network welcomes borrowers with poor, thin, or no credit. Having previously been refused an auto loan is not a barrier to approval. The lending network can recommend local dealers in most U.S. locations.

You can expect, within a day or less, an indication that a lender is interested in offering you a loan. Rather than looking exclusively at your credit score, Car.Loan.com dealers look at factors including a sufficient income, a stable residence, and a valid driver’s license.

The Car.Loan.com website offers a handy estimator for determining your likely loan amount based on your credit score, monthly income, and monthly recurring payments. The actual loan terms will depend on the dealer recommended to you.

The myAutoloan.com network can get you up to four car loan offers in a few minutes through its partner dealers. You can apply for a loan to purchase a new or used vehicle, or to refinance your current car. You can even arrange financing for lease buyouts and private party sales.

You begin the process by completing a short loan request form. myAutoloan.com circulates your request to its lender network and forwards you links to interested dealers. Bad credit is OK, as are dismissed or discharged bankruptcies.

To qualify, you should have a minimum income of $1,800 per month and a credit score of 525 or higher. The minimum loan or refinance amount is $8,000. Furthermore, vehicles must be no older than 10 years with a maximum mileage of 125,000 miles. Your lender will determine the exact terms and requirements.

You have 30 days to choose one of the loan offers you receive, but you’re under no obligation to select any of them. The myAutoloan.com network has been matching borrowers to dealers since 2003. The network is not available in Alaska and Hawaii.

Home Loans: 500-550 Credit Score

Your home is probably the largest purchase you’ll ever make. It’s not surprising that arranging a mortgage is a big deal. It involves a large chunk of money, lots of paperwork, a 30-year commitment, and a lengthy ceremony known as closing.

Having bad credit is not a plus when applying for a mortgage. But, as these three sources show, it’s not a dealbreaker either.

If your credit score is in the 500-to-550 range, you can make it easier to get a mortgage by saving up a large down payment. If you can cough up 20%, you won’t be required to buy mortgage insurance, a monthly savings that can easily exceed $100.

You may not have a 20% down payment, but if you can muster 10% down, you can qualify for an FHA loan. With a 580+ score, you will only need 3.5% down to get an FHA loan, so it’s worthwhile to boost your score before applying.

  • Options for: home purchase, refinance, home equity, and reverse mortgage
  • Lenders compete for your business
  • Receive up to 5 offers in minutes, and pick the best offer for you
  • Founded in 1996, LendingTree has facilitated 55 million+ loan requests and $250 billion+ in closed loan transactions
  • Click here for official site, terms, and details.
★★★★★

4.9

Overall Rating

Interest Rate In Business Since Application Length Reputation Score
Varies by Applicant 1996 7 Minutes 9.0/10

LendingTree was one of the first home loan services to offer peer-to-peer lending, having been founded in 1997. In this lending method, LendingTree brings together lenders and borrowers who can offer you a mortgage, home equity loan or line of credit, refinancing loan, or reverse mortgage.

The benefit of peer-to-peer lending is that you can get up to five offers in minutes. As they say in the LendingTree commercials, “May the best loan win.™” This comes in handy when you have bad credit because you can attract offers from lenders who are happy to charge higher interest to customers with low credit scores.

LendingTree has arranged more than $250 billion in loans from 55+ million loan requests. In addition to handling home loans, LendingTree matches lenders and borrowers for personal loans, student loans, small business loans, and auto loans.

Beyond conventional mortgages, LendingTree lets you apply for FHA, USDA, and VA loans. Some lenders may require a credit score above 550, but others are more flexible if you hit other targets such as debt-to-income ratio, at least 3% down, or a steady job with sufficient income earned in the past two years.

  • Options for: refinance only
  • Get 4 free refinance quotes in 30 seconds
  • Network of lenders compete for your loan
  • Trusted by 2 million+ home loan borrowers to date
  • Interest rates are near all-time lows
  • Click here for application, terms, and details.
 
★★★★★

4.7

Overall Rating

Interest Rate In Business Since Application Length Reputation Score
Varies 2004 4 minutes 8.5/10

Founded in 2004, FHA Rate Guide is a directory service for home loan providers. More than 2 million consumers have used this service to obtain or refinance mortgages.

The service does not match you to a lender. Rather, it uses the information you enter to recommend a list of home lenders. The task then falls to you of contacting the lender and applying for a loan.

FHA stands for the Federal Housing Administration, a government agency that insures home mortgages. It has insured more than 46 million mortgages since 1934. If a borrower defaults on an FHA loan, the agency pays off the mortgage.

FHA loans are designed for borrowers with low to moderate income. These mortgages require lower credit scores and down payments than do most conventional mortgages.

You will need to make a 10% down payment if your credit score is between 500 and 579, whereas higher scores require only 3.5% down. The down payment can come from your own savings and/or gifts from family members.

You must make mortgage insurance premium (MIP) payments each month until your equity in your home exceeds 20% of its value. Typically, MIP insurance costs 0.85% of the loan amount.

FHA Rate Guide is owned by LeadPoint, Inc. It is a neutral provider of information about online mortgage loans. The directory service is well-suited to consumers who want to contact lenders on their own rather than be automatically connected to recommended lenders.

  • For military veterans, service members, their spouses, and other eligible beneficiaries only
  • No down payment and no monthly mortgage insurance
  • The basic entitlement available to each eligible veteran is $36,000
  • Lenders generally loan up to 4 times a veteran's available entitlement without a down payment
  • Click here for application, terms, and details.
★★★★

3.9

Overall Rating

Interest Rate In Business Since Application Length Reputation Score
Varies by Applicant 1944 9 Minutes 7.5/10

The U.S. Department of Veteran Affairs (the VA) offers or guarantees home loans to eligible military active-service members, reserve and National Guard members, and veterans. It also backs cash-out refinance loans.

VA guaranteed loans are sourced by private lenders, including banks, credit unions, and mortgage finance companies. VA loans are available to all eligible applicants, regardless of credit score.

VA-guaranteed home loans require no down payment for homes costing no more than their appraised values. VA loans feature better interest rates and terms than those available from conventional loans.

A VA loan allows you to borrow up to the conforming loan limit specified by the Federal Housing Finance Agency. For 2019, that limit is $484,350, but for high-cost areas, the limit is $726,525.

VA loans do not require mortgage insurance premiums and have fewer closing costs. To get a VA loan, you must apply for a Certificate of Eligibility (COE), available to military members and veterans who meet the minimum active-duty service requirement, which generally is 90 days. With a COE in hand, you can choose any participating mortgage lender.

The VA also guarantees cash out refinance loans for eligible persons who live in the home being refinanced. You can cash out your home equity and/or turn a non-VA loan into a VA loan. Typically, the new mortgage offers better rates and terms than do non-VA loans.

FAQs About Bad Credit Loans

You may have many questions about bad credit loans. Here are the answers to a few frequently asked questions.

How Bad is a Credit Score of 500?

In the FICO 8 scoring method, scores range from 300 to 850. A score of 500 is very poor, significantly below average. Ninety-nine percent of consumers have credit scores higher than 500. About 16% of consumers have a credit score in the very poor range of 300 to 579.

FICO® Score Range

According to Experian, 62% of consumers in the very poor range are likely to fall behind on their loan payments by more than 90 days. Moreover, 19% of consumers with a 500 score have been past due for 30 or more days within the last 10 years.

The average credit card debt among consumers with a 500 score is $2,734. This same group has an average credit utilization rate (CUR) of 113.1%. CUR is the ratio of credit used to credit available, which means the 500-score group has an average debt that is higher than their authorized credit.

The good news for consumers with a credit score of 500 is that there is plenty of room for improvement. Usually, this is a slow process that takes six months to a year to start working, although there are a few things you can do to speed up the process (see below).

Long-term steps you can take is to reduce your CUR by paying off current debt without closing out the account, making all payments on time, and working with a credit counselor to develop a debt management plan.

What is the Easiest Credit Card to Get with Bad Credit?

Usually, store cards are easy to get. Of the credit cards reviewed here, the Fingerhut Credit Account is the easiest to obtain. The reasons are simple:

  • You can use the account only for purchases at Fingerhut and its partners
  • The account has a modest spending limit
  • The account does not offer cash advances

In the credit card market, secured cards are the easiest ones for consumers with poor credit to acquire. These are cards that are backed by cash collateral that you deposit into a locked account. Your credit limit won’t exceed your deposited amount.

If you are late making a payment, the issuer will debit your account for the required payment. If you miss multiple payment dates, the issuer will likely cancel the card. Secured cards are available to folks with any credit score, and the interest rates are usually relatively lower than comparable unsecured cards.

The Total Visa® Card and the First Access Solid Black Visa are geared toward consumers with less-than-perfect credit. Both accept applicants in the 500 to 550 score range, but both charge numerous fees.

The initial credit limit on both cards is $300 — minus the setup fee. Both cards report your activity to the three credit bureaus, which gives you a chance to boost your score by paying on time and not exceeding your limit.

Which Loan Company is Best for Bad Credit?

If you want maximum convenience procuring a personal loan, MoneyMutual, CashUSA.com, and CreditLoan match your loan request to lenders on their networks. While none of these loan companies offer direct loans, they can hook you up to one or more lenders who have deep experience working with bad-credit consumers. There is no charge for this service, and if you are approved for a loan, funding is quick, usually within one business day.

Another option is LendingTree, a leader in the peer-to-peer (P2P) loan market. It facilitates several types of loans, including personal loans and home loans. P2P loans are direct transactions between lenders and borrowers mediated through an online marketplace. Because of the wide variety of potential lenders who use the LendingTree marketplace, it’s quite possible that consumers with poor credit will attract one or more offers.

Another way to get a cash loan quickly is to refinance your home or car. By doing so, you can turn your equity into cash, and you may even get better terms. Auto Credit Express is our top auto-loan matching service. It can find you a dealer who is willing to offer you a refinancing loan despite a low credit score.

If you want to refinance your home and you qualify for an FHA loan, the FHA Rate Guide provides a valuable directory of lenders who can accommodate you. Veterans and active military personnel can get terrific cash out refinance loans from the VA-Guaranteed Home Loan Program. Because home and vehicle refinancing loans are collateralized by the underlying property, they are available at favorable rates to bad-credit consumers.

How Can I Raise My Credit Score in 30 Days?

There are several steps you can take to slowly raise your credit score over a period of six months to a year. These include reducing your indebtedness, making all payments on time, and keeping old accounts open.

You can follow several strategies if you are in a hurry to boost your credit score. The first is to review your three credit reports from Experian, TransUnion, and Equifax. If you come across any mistakes, you can ask the credit bureau to correct them.

Credit Report Evaluation Infographic

By removing derogatory items depressing your credit score, your score should experience a quick rebound. While you can take on this task yourself, you may want to consider using a credit repair service. The better ones are reasonably priced and provide honest value.

Other relatively fast ways to improve your credit score are to consolidate your debt at a lower interest rate, communicate with your creditors to work out existing debts, automate your payments so that you never miss one, periodically use old credit cards, and refrain from opening new accounts if you already have enough credit.

If you are serious about a 30-day improvement in your credit score, consider the free Experian Boost™ product that claims to quickly raise your FICO®-8 score by 13 points on average. The product links to your bank account and allows you to get credit for paying your utility and phone bills.

Another idea is to ask a creditor for a “goodwill adjustment” to remove a late payment from your credit report. Late payments can depress your score by 60 points or more.

Also, you can pay off an account in collection by negotiating a “pay for delete” agreement. This is a written agreement in which the collection agency agrees to remove the collection from your credit history in return for you paying off the account.

You can reduce your credit utilization ratio by asking for higher credit limits. Since the CUR is credit used divided by credit available, raising your credit limits automatically drops your CUR and improves your score. Below is an example of credit utilization calculated across three card accounts.

Credit Utilization Chart

If your low credit score is due to a lack of credit history, adding accounts should quickly build your credit score. You can do this by applying for a new credit card, secured or unsecured. Once received, use the new card and pay the balance in full each month.

Another tactic is to become an authorized user on someone else’s credit card. You immediately inherit the credit limit on the card, thereby decreasing your credit utilization ratio. As time goes by, on-time payments can help both you and the primary owner increase your credit scores.

Bad Credit Need Not Be a Permanent Stain On Your Finances

In our review of loans and credit cards for a 500 to 550 credit score, we’ve identified our picks for the best bad credit personal loans, credit cards, auto loans, and home loans. The important point is that a low credit score need not be a permanent stain on your finances.

No matter what your credit history, you can start rebuilding your score by making smart choices. Your reward can be easier access to more affordable credit, as well as the ability to acquire those fancy, high-reward credit cards.

There is also the attitude adjustment you could experience by taking action to solve a problem and improve your lifestyle. With that new attitude, who knows what else is possible?

Range of credit scores covered in this article: 500, 501, 502, 503, 504, 505, 506, 507, 508, 509, 510, 511, 512, 513, 514, 515, 516, 517, 518, 519, 520, 521, 522, 523, 524, 525, 526, 527, 528, 529, 530, 531, 532, 533, 534, 535, 536, 537, 538, 539, 550, 551, 552, 553, 554, 555, 556, 557, 558, 559, 550