Is a 513 Credit Score Good or Bad?

A 513 credit score isn’t the worst score you can have, but it still ranks as “Poor” on the 350-850 credit scoring scale.  With this score, a secured credit card is within your reach, but loan options are limited — and the cost of financing will be high.

Find out the possible causes of a 513 credit score, and what’s available to you. The good news is that the “Fair” range begins at 560.

What Behaviors Cause a 513 Credit Score?

The two biggest influences on your consumer credit score are your payment history and your outstanding debt.

A 513 credit score could be the result of various factors, such as having your accounts marked late — 30 days or more past due — or utilizing too much of your available credit.  Experts advise keeping credit utilization on each of your accounts, and as a whole, at no more than 30 percent.

Other factors that can cause your credit score to plummet into the “Poor” range are the impact of a bankruptcy or a foreclosure on your home.

Credit Cards or Loans Available With a 513 Credit Score

Secured and unsecured credit cards, retail store cards and auto loans are all within your reach if you have a 513 credit score.  Secured cards will likely have a lower interest rate than unsecured cards,  but secured cards require you to make a deposit.

Some creditors and lenders will be willing to offer you better rates than others, so shop around for the best rates. If you choose to wait to apply for new credit until you improve your credit score, however, you can score better rates.

Your “Poor” 513 Score vs. a “Fair” Credit Score.

When you have a 513 credit score, you’re fast approaching the “Fair” credit-scoring tier. Here are some factors that can make a difference between your score and the next level:

1. Time

Late payments and other delinquencies impact your credit report for seven years. Public record items also affect your credit for seven years, and some types of bankruptcy might have a longer effect of 10 years.

2. Timely bill pay

Payment history counts for 40 percent of your overall credit score, so it’s critical to pay your bills on time each month. Each late payment you make stays on your credit report for seven years.

3. Too much debt

Plenty of strategies exist to help you pay off debt. Here’s a couple to consider:

  • Debt snowball: Focus on paying off your smallest debt by paying more the minimum payment due. (You’ll still pay the minimum due on all of your other obligations.) Once you’ve paid off your smallest debt, repeat the process with the next smallest debt.
  • Debt avalanche: Focus on paying off your debt carrying the highest interest rate by paying extra toward it while paying the minimum due on all other accounts.  Once you’ve paid off the highest-interest debt, repeat with the next highest-interest debt.

4. Create Credit Records

A couple of good options can work for people with your score: a secured credit card or a credit-builder loan.

With a secured credit card, you make a deposit. Your deposit serves as your credit line and a form of insurance for the creditor in case you default. As you charge and make payments, the creditor reports your activity to the credit bureaus.

Another option is a credit-builder loan from a credit union. Instead of issuing the loan funds up front, however, the credit union places them in an interest-bearing account while you make payments.

Once you’ve made all of the payments, you’ll receive the loan amount plus any interest the funds earned. The upside is that while you’re making payments, the credit union will report your positive payment history to the credit bureaus.

5. Use credit conservatively

A higher credit utilization limit can equal a lower score, so never use more than 30 percent of your credit cards’ limits.  For example, if your card has a $1,000 credit line, never carry a balance that exceeds more than $300 or 30 percent of the limit.

Keeping Tabs on Your Credit

Improving credit isn’t just a set-it-and-forget-it effort. Instead, for best results, you should consider regularly monitoring your credit reports and scores.

Periodically looking over your credit report can alert you to any errors or changes in your credit, whereas monitoring your credit score can give you the self-satisfaction of knowing where you stand.

Do you monitor your credit reports and scores on the regular? If not, don’t you think it’s time to start?

Similar Credit Scores: 510, 511, 512, 514, 515, 516

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