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500 Credit Score

Understanding a 500 credit score

Ella Jukwey
Written by  Ella Jukwey
4 min read
Updated: 27 Feb 2024

MoneySuperMarket explains what your borrowing options are if you have 500 credit score.

Is 500 a good credit score?

500 is a low credit score. When looking at the credit rating banding scores across the three main credit rating agencies, none of them put 500 in their ‘good’ category. The main credit reference agencies in the UK are Experian, Equifax and TransUnion. In the table below, we’ve shown where 500 sits for each:

Credit reference agency

A 500 credit score with them is

Their credit score scale

Experian

Very Poor

0-999

Equifax

Poor

0-1000

TransUnion

Very Poor

0-710

Image of someone using a calculator

Will I be eligible for a credit card or a loan with a 500 credit score?

You could get a credit card or loan with a 500 credit score. However, because it’s a low credit score, it may be more difficult to be accepted for credit. Because of your lower credit score, you should also expect higher interest rates, a smaller credit limit and loan amount. There are specialist lenders who lend to people with bad credit, so for example, you can get loans and credit cards aimed at people with poor credit – just remember you won’t be offered the most competitive rates.

Why do I have a 500 credit score?

Here are some of the reasons why you might have a bad credit score:

  • No or short credit history: If you’re new to borrowing money this could be why you don’t have a good credit score. If you’ve never or have only just started borrowing money, lenders don’t have much to go off on to determine if you’re a reliable borrower or not.

  • History of missed payments: If you’ve repeatedly missed payments in the past, then that signals to lenders you’re not a reliable borrower and this will hurt your credit rating.

  • Use too much of your credit limit: Your credit limit is the maximum amount you can borrow on your credit card. It’s ideal to keep your credit utilisation under 30%, as using 50% and over is considered high and can lower your credit rating. So, for example, if your credit limit is £1,000, you should aim not to spend over £300 because that’s 30% of your credit limit.

  • Too many credit applications: It’s best to space out your credit applications because every time you apply for credit it leaves a mark on your credit file. Making too many credit applications in a short time suggests that you’re too dependent on credit and may have issues with your finances.

  • Financial problems: If you’ve been declared bankrupt or have a CCJ, this can leave a mark on your credit report and not only hurt your credit score but make it very hard to access credit in the future. Bankruptcy and a CCJ will come off your credit report after six years, but you should try to resolve your debts before then to lessen the damage to your credit score.

How can I improve my 500 credit score?

If you’re not happy about your credit score, here’s what you can do to improve your credit score:

  • Register on the electoral roll: Being registered on the electoral roll verifies your address to the lenders and can help step up your credit score.

  • Make payments on time: Keeping up with payments shows lenders that you’re a trustworthy borrower. It can be savvy to set up a direct debit to make sure you don’t miss payments.

  • Keep credit utilisation low: It’s advised to keep your credit limit below 30%. By not using all your credit available, you’re showing lenders you’re not too reliant on credit – which hopefully makes it easier for you to keep up with your credit card bills.

  • Check for any errors: Mistakes on your credit report could be hurting your credit rating. Look through your credit report for any inaccuracies.

How long will it take for my 500 credit score to improve?

A good credit score won’t happen immediately. Fixing your credit score might take a while but the benefits will be worth it. A better credit score could take anything from six months to a few years. You get a good credit score when you’ve built up a history of always making payments and practising good financial habits.

Will my credit score fall if I regularly check it?

No, checking your credit score regularly won’t harm your credit score. If you check your credit score with Credit Monitor this won’t leave a mark on your credit report because we use a ‘soft search’ which won’t be visible to lenders and doesn’t affect your credit score.

What is the highest credit score possible?

The top credit score possible will depend on the credit rating agency you check your score with. With Equifax the highest credit score will be 1000 and Experian it is 999. Here at Credit Monitor, we use TransUnion’s scoring system, so the highest credit score is 710.

Can I get a mortgage with a 500 credit score?

You can get a mortgage with bad credit – however, your options will be more limited in comparison to someone with a good credit rating. If you apply for a mortgage while your credit score is low, you’ll likely have to put down a larger deposit and pay higher interest rates. You also probably won’t be accepted by high mainstream lenders as you’ll be seen as a higher risk to lend to. Nevertheless, there are specialist mortgage lenders for people with bad credit.

Other useful guides

Credit can be a lot to get your head around, but we have plenty of guides you can read to get to grips with it:

Credit Ratings, Scores and Bandings Explained

How to best pay off your credit card debt

How to improve your credit score with a credit card

Nurture your credit score with our Credit Monitor service

The good thing about bad credit scores is that they can become better credit scores. You can check your credit score and report whenever you want with our free Credit Monitor service. Credit Monitor will also send you hints and tips on how to improve your credit score.

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