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Is 581 a good credit score?

Is your credit score looking bad? Tips on how to improve it.

Is 581 a good credit score?

Postby langley » Fri Mar 30, 2012 4:50 pm

I have had my first credit card for about seven months, and I found out my credit score is 581 so far. I was told that is good.. is that true? And once I've reached about a year will my credit score be even better if I continue doing what I'm doing.. paying on time and extra.
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Is 581 a good credit score?

Postby carmichael » Fri Mar 30, 2012 4:58 pm

This should help you to understand how credit scores work..

FICO scores from 300 to 850 and Vantage Plus scores from 501 to 990.

Here is the breakdown for both systems.

Vantage Plus system scores from 501-990.
A-901-990
B-801-900
C-701-800
D-601-700
F-501-600

FICO system scores from 300-850.
Elite-740-& up
Prime-700-739
Preferred-660-699
Standard-625-659
Sub-prime-624-& under

FICO is the only one that matters since it's the one that all major lenders look at.

So as you can see it depends on if your looking at a true FICO score or a Vantage plus score.

As far as what makes up credit scores it's the following;
1. Payment history (longer the better) 35%
2. Time in bureau (longer the better) 15%
3. Types of credit (mix of credit cards & installment loans) 10%
4. New credit (new accounts and inquiries) 10%
5. Debt to credit ratio (lower the better) 30%

And just so you will know Experian only uses Vantage, Equifax only uses FICO and Transunion uses both depending of which type of credit report is requested of which there are 3. The standard that people get from the Internet, the auto enhanced which only car dealers and lenders see and the factual which only mortgage people see. The last two are not available to the general public.

To have the very best score and profile people need 3-4 credit card accounts (revolving) with balances below 30% of their credit limits and 2 cars, homes, boats, motorcycles, computers, furniture or personal accounts (installment) all with good long payment history's.

Add to this that unless you get your scores either direct from either Equifax or myfico.com your getting what's called a FAKO score which makes it even worse because they all have their own system to calculate scores.

Credit scores are 90% based on the last 24-months of activity, and they can change daily depending on the information submitted by your creditors.

So, as you can see no matter which system your looking at a score of 581 is not good.
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Is 581 a good credit score?

Postby johnston » Fri Mar 30, 2012 5:02 pm

No 581 is not a good credit score. The typical range for credit scores is between 375 and 900, with 375 indicating a poor credit risk, and 900 indicating a high likelihood that any credit extended will be repaid as agreed. The score of 720 or above means you’re in great shape credit wise. The average score in the country is 678. Scores of 620 and above are considered good. You have room for improvement.
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Is 581 a good credit score?

Postby waerheall » Fri Mar 30, 2012 5:06 pm

That isn't very good at all. In order to qualify for many loan programs, you need to be at least 620 or 650.

If you are paying on time and extra, that means you are not paying the balance off completely. That will get your score going up a lot faster, if you use the credit and then pay it off in full every month.
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Is 581 a good credit score?

Postby phillip73 » Fri Mar 30, 2012 5:07 pm

it is not good but a great start for young credit. You need to get and keep you balance under 30% of the credit limit which your score tells us you have not been doing. You get no extra points for paying interest with a credit card so one should never use unless they can pay in full. A CC should be used as a substitute for cash solely because a CC ofters consumer protection it is a very expensive and bad long term financing instrument
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Is 581 a good credit score?

Postby yehudi » Fri Mar 30, 2012 5:21 pm

No, 581 is not a good score. You want to be over 600, even over 700. If I was in your shoes, I would cancel some of the credit cards I was not using that often. Pay off the card you have had for the most amount of time and continue making payments on time. 581 is not good. I worked in lending a few years ago and that would be put in our Sub-prime category. Take some steps to improve your score.
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Is 581 a good credit score?

Postby julian » Fri Mar 30, 2012 5:24 pm

581 is not good.
You have at least one negative item on your credit reports.
Check your credit reports - not just your score.
All 3 reports are free once a year. Never pay for them.
Annual Credit Report.com https://www.annualcreditreport.com/cra/index.jsp
Print out all 3 if you can, and ask here for help how to resolve any problems.
Of course, for best credit, pay credit cards in full each month. Never carry balances.
But.. something tells me that there is a surprise on your reports you do not know about
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Is 581 a good credit score?

Postby saber82 » Fri Mar 30, 2012 5:32 pm

no 581 is poor credit
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