At a Glance
Yes, a credit score of 409 is indeed a bad one. If your credit score is low, you will likely have difficulty obtaining credit cards and loans. If you get approved, you would either be asked to pay a hefty deposit or to cover the risk the lender is taking by giving you a loan.
Similar to school grades, your credit score is defined between a set range of numbers between 300-850. Lenders will deem you a high-risk borrower if your credit score is 409. Applicants with a 409 credit score may require to shell out extra money or put deposits on their cards. Getting approved for an unsecured credit card will also be difficult, as it doesn’t require collateral or a security deposit. Many lenders will refuse to do business with borrowers whose credit score falls in the ‘very poor’ range, which translates to unfavorable credit.
Now that we have explained what can happen when your credit score dips low, let’s dig deeper.
Is 409 Credit Score Good or Bad?
A 409 credit score is bad. It is widely considered very poor and can cause financial pain. Because of a bad 409 credit score, you will likely have trouble qualifying for a credit card, personal loan, auto loan, or mortgage.
What Impacts your 409 Credit Score?
There can be multiple factors affecting your credit score to be 409. Therefore, understanding these can help you focus on your credit score-building efforts. Some factors affecting your credit score are:
- Public information
- Credit Utilization Ratio
- Late or missed payments
- Length of credit history
- Total debt and credit mix
- Recent credit activity on your account
If you have suffered from bankruptcy or foreclosure in the last 7-10 years, it will be visible on your credit report. Needless to say, bankruptcy or foreclosure will take a huge hit on your credit score. While the record might disappear from your credit report, there is a high possibility that lenders might refuse to work with you because of bankruptcy billing.
Credit Utilization Ratio:
To improve your 409 credit score, it is advised that you keep your credit utilization within 30%. To calculate the overall utilization ratio, calculate the balances on all your credit cards and divide them by the sum of borrowing limits.
Late or Missed payments:
If your credit score has gradually hit when you have missed or been late to pay your bills, you need to make some changes to your payment behavior soon. Paying your bills on time will ensure that your credit score doesn’t take a hit, and will keep increasing gradually. Remember, this component makes up for 35% of your FICO score.
Length of Credit History:
Along with other things, the length of your credit history is also a detriment to your credit score. The number of years you have been a credit user can influence up to 15% of your FICO score. NTC (New to Credit) users must be patient and careful to avoid bad credit behaviors.
Total Debt and Credit mix:
The FICO credit usually favors users with multiple credit accounts and revolving and installment credit. If you have only one kind of credit account and your credit score is 409, it might help if you broaden your credit portfolio. Remember that credit mix and total debt make up 10% of your FICO score.
Recent Credit activity:
If you are someone who keeps applying for new loans and credit cards, your credit score might take a hit. Some companies trigger a check known as a hard inquiry when you apply for loans or credit cards. What happens during the hard inquiry is that the lender obtains your credit score to determine if you can get the credit line or not. Hard inquiries might drop your credit score by a few points, but it rebounds within a few months if you keep up with your credit card bills. New credit activity can account for up to 10% of your FICO scores.
What does a Credit Score of 409 mean for your Life and Finances?
Your credit score can affect you in many ways, and having a poor credit score might make your life difficult and full of hassles.
Here’s what your life will look like with a credit score of 409:
- You will pay higher interest rates and loan fee
- You might face issues getting a job, apartment, and other essentials
- Giving deposit for utilities
- Higher insurance costs
- Difficulty finding an apartment
- Difficulty finding a job
Can you get a Credit Card with a 409 Credit Score?
Yes, you can get the Azpire Credit Builder Card to build your credit score from 409. Yes, it is difficult to get a credit card with a credit score of 409, but it doesn’t translate to financial suicide. The Zolve Azpire Card, a secured credit card, is available to all, even if you fall under NTC (New to Credit). One of the best ways to rebuild your credit score is to apply for this secured credit card.
After your card gets activated, your transactions will be reported to the credit bureaus, helping you build a good credit score.
How to Improve your 409 Credit Score?
Changing your poor credit score from 409 to a fair (580-669) to a good one (670-739) is gradual. First and foremost, you need to figure out how much debt you owe. Remember to avoid any business or financial consultant who promises that they can magically increase your credit score within a few days or weeks. Some of the steps you can take to improve your 409 credit score are:
- Paying your bills on time
- Avoiding high credit utilization
- Debt management plan
- Credit builder loan
- Use a secured credit card
- Establish a credit mix
Paying your bills on time:
If you have any outstanding credit card bills and loans, remember to pay it off as soon as possible. Payment history is one of the most important factors that is taken into account while calculating your credit score. To make your payments on time every month, you can activate payment alerts or auto-debit facilities to ensure your bills are paid on time.
Avoid high credit utilization rate:
No matter how many accounts you have, try keeping your credit utilization to 30% to avoid lowering your credit score.
Debt management plan:
If you're having trouble paying your credit card bills, a debt management plan can help. You should work with a nonprofit credit counseling agency to devise a manageable repayment plan. Please note that if you choose a debt management plan, all your credit card accounts will be closed and your credit score will deteriorate significantly. But you can make up for it with a good credit rating. But if that seems too extreme, you can always consult a credit advisor to improve your 409 credit score.
Credit builder loan:
Multiple credit unions offer these small loans designed to help NTC users build their credit. These loans help you build credit if you maintain the stipulated payment behavior.
Apply for a secured credit card:
This usually comes with a small credit limit (often hundreds of thousands of dollars) that requires you to make a deposit equal to the total amount of the limit. If you use this card to make regular and timely payments, your lender will report those activities to national credit bureaus. Your credit history is recorded in your credit file and reflected in your FICO score.
If you are looking for a secured credit card to build your 409 credit score, then look no further!
Folks, meet the
Zolve Azpire Card
What is it?The Zolve Azpire card helps you build credit with your money. This credit builder card allows you to build your 409 credit score from the first transaction. Anyone can use it, even if your credit score is as low as 409.
The best part?The Zolve Azpire card comes with no subscription fees, no interest, and no SSN, and you get up to 15% cashback. Every swipe you make is recorded, and at the end of the month, we add up all the monthly transactions and report them to the bureau to build a credit score for a brighter financial future.
Establish a credit mix:
The FICO scoring model favors users with multiple credit accounts, along with a mix of different types of loans, including installment loans like mortgages, car, and home equity loans.
A poor credit score like 409 will undoubtedly cause worry when you make financial decisions for your future. With a low score, getting approved for credit cards, loans, or mortgages becomes difficult. Yes, it might sometimes feel disheartening, but you must fix your 409 credit score to secure your financial future. Hopefully, the tips we shared above will help you understand how a poor credit score will affect you and what steps you can take to improve that score.