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600 Credit Score: What Should I Do?

A 600 credit score is considered to be fair. It’s not the end of the world, but it isn’t a good sign either. Since your credit score determines your ability to get a loan, with a 600 score you’re most likely going to be at a disadvantage. Borrowers will generally only be willing to give you a loan at an extremely high interest rate. But all is not lost. If you’re willing to put in the time and take a few steps in the right direction, you can definitely put your credit score on the path to improvement.

Why is a Credit Score Important?

Your credit score is an integral part of your finances. Our economy today runs entirely on credit. Want to buy a new car? A house mortgage? Take out a student loan? In every one of these matters your credit score will play a huge role. Before issuing you anything, a lender will certainly take a look at your credit. This will also determine what interest rate they will be willing to give you. Even if you’re not looking to get a loan, your credit score can still impact your life. Landlords and employers also gauge a person’s reliability against their credit score. A good credit speaks of your commitment and trustworthiness. In the same manner, a bad credit means you have nothing to indicate your worth. 

Factors That Affect Your Credit Score

Your credit score is influenced by several factors, including:

  1. Payment History: Your payment history makes up 35% of your credit score. Late payments, defaults, and bankruptcies can negatively impact your credit score.
  2. Credit Utilization: Your credit utilization ratio is the amount of credit you use compared to your credit limit. It makes up 30% of your credit score. High credit utilization can indicate that you’re relying too much on credit and can hurt your credit score.
  3. Length of Credit History: The longer your credit history, the better it is for your credit score. This makes up 15% of your credit score.
  4. Types of Credit: Having a mix of different types of credit, such as credit cards, loans, and mortgages, can improve your credit score. This makes up 10% of your credit score.
  5. Recent Credit Inquiries: When you apply for credit, it can result in a hard inquiry on your credit report, which can temporarily lower your credit score. This makes up 10% of your credit score.

What is a Good Credit Score?

While there is no definite model, a 700 score is considered to be in the good range. Scores 800 and above are considered to be excellent. While different lenders have different criteria by which they measure the position of a potential borrower, most consider a 670 score to be low risk. This means you have a better chance of acquiring a loan at a low interest rate. 

How to Improve your 600 Credit Score?

Prioritize On Time Payments

The first step you can take towards improving your credit score is prioritizing paying bills on time. Nothing hurts your credit score like late payments do. Paying 30 days late can drop your credit score by a 100 points or even more. As you take your first step towards credit score recovery, make sure you pay on time. Add a reminder on your calendar, set automatic payments, and religiously check your history. If you’ve already missed some payments try to catch up on them as soon as possible. You will slowly start to see how this makes a difference. 

Cease Credit Card Usage

One of the steps you should proactively take is to cease your credit card usage. Often people open new credit cards unnecessarily. Every time you open a new card the issuer takes a look at your credit. This is called a hard inquiry and can lower your score. 

Make sure your existing cards are paid down. Ensure you do not have a high card utilization. It is recommended to not go above 30% on any card.

Don’t Close Old Credit Accounts

Closing old credit accounts can hurt your credit score, especially if they have a long credit history. Keep them open and use them occasionally to maintain a good credit history.

Analyze Credit Report

While a 600 credit score can be a result of your own financial activities, there is also a chance that it might not entirely be your fault. This brings us to the importance of checking your credit reports. This will not only ensure that you are aware of your current position but also helps you to detect any miscalculations or wrong information that might be bringing your score down. If you do detect any such errors there are a few steps you can take.

  • Contact the company reporting the wrong information.
  • Dispute it with the credit bureau.

You can receive a free annual copy of your credit report. The bureau is instructed to investigate any dispute you report within 30 days. This means you’ll be able to check and fix your credit score quickly. 

Discuss Your Options With A Bankruptcy Lawyer Today

If you’re struggling to manage your credit score and make payments, we can help you. Get real answers to your Florida Debt Consolidation questions so you can make fully informed decisions. Schedule a free consultation with a Florida bankruptcy attorney at (954) 922-2283 or fill out the form below.

Written By:

Attorney Robert Stiberman

Robert is an experienced bankruptcy attorney adept at handling Chapter 7, 13, and 11 filings, with more than 15 years of experience in bankruptcy cases. Robert represents clients in both consumer and business bankruptcy ... Read More

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