400 or 500 Credit Score: What It Means and What You Can Actually Borrow

By Yonni Rossa · Reviewed by Zion Rokah, founder, Loans.net Network Ltd · Last reviewed 15 September 2026 · How we source and check this

The short answer. A credit score of 400 or 500 sits in the range FICO calls Poor, which runs from 300 to 579. Most mainstream personal loan lenders decline applications below about 580, so your realistic options are secured borrowing, a credit union payday alternative loan, a co-signer, or a credit-builder product. You can borrow. It costs more, and the amounts are smaller. The cheapest route for most people in this range is a Payday Alternative Loan from a federal credit union, capped by regulation at 28% APR.

If you have just checked your score and seen a number starting with a 4, the first thing worth knowing is how much company you have.

You are not an outlier

14.7% of US consumers had a FICO score in the Poor band, 300 to 579, as of September 2025. A year earlier it was 13.2%, so the share is growing rather than shrinking. Source: Experian consumer credit data, September 2025.

Roughly one American in seven is where you are, and the group got bigger last year. FICO’s own reporting points the same way: the national average score slipped to 714 in March 2026, down two points on the year, and the company describes a market splitting at both ends, with the middle bands thinning while the high and low groups grow.

That matters practically, not just emotionally. Lenders know the size of this group. Products exist for it. The task is telling the reasonable ones from the ones that will make your situation worse.

What actually puts a score in the 400s

Scores in the 400s are rarely the result of one missed payment. Getting that low usually takes a serious derogatory mark, and knowing which one you have tells you how long the climb is.

• A charge-off or an account in collections. These stay on your report for seven years from the date of first delinquency, and their damage fades over that period rather than disappearing at once.
• A bankruptcy. Chapter 7 stays for ten years, Chapter 13 for seven. This is the single heaviest item on a report.
• A repossession or foreclosure, each carrying seven years.
• A run of missed payments across several accounts at once, which is common after a job loss or a medical event.
• A thin file combined with recent trouble. If you have only two accounts and one is delinquent, there is nothing else to average against.

Before applying for anything, pull your three reports free at AnnualCreditReport.com and read them. Errors are common, and a single account reported in error can be worth a large number of points. Disputing it is free and faster than any other route to a higher score.

What a 400, 440, 450 or 500 score means in practice

Everything under 580 gets lumped together as bad credit, but the bands inside it do not behave the same way once you start applying. FICO runs from 300 to 850. Where you sit below 500 changes which doors are open today, and which ones only open after you move the number.

The useful thing to notice is where the real step is. Moving from 400 to 490 changes very little about what you can borrow this month, because scores in the 400s are read the same way across the board. Moving from below 500 to above 580 changes a great deal. If you are sitting at 470 and can wait, crossing 580 is worth more than any amount of lender comparison at your current score.

That is also why the rest of this page is split the way it is: what is genuinely available to you now, and the fastest way to move the number. If you want the second part first, our guide to improving your credit covers the steps in order.

What you can borrow right now

For context on what the same borrowing costs at a healthy score, the Federal Reserve’s most recent published figures put the average 24-month personal loan at a commercial bank at 11.86% and the average credit card balance at 22.15%. Our guide to secured and unsecured loans covers why collateral moves that number.

The option most comparison sites skip

A Payday Alternative Loan, or PAL, is a small loan offered by federal credit unions under rules written specifically to give people an alternative to payday lending. The terms are set by the National Credit Union Administration, not by the individual credit union:

• Between $200 and $1,000
• A term of one to six months
• Interest capped at 28% APR
• An application fee of no more than $20
• Available after one month of credit union membership
• Up to three in any six-month period, with no rolling over one into the next

Credit unions are member-owned and most have a field of membership that is easier to join than people expect, often tied to a geographic area rather than an employer. Membership frequently costs a small deposit.

Why you rarely see this recommended. Comparison sites, including this one, are usually paid by lenders. A credit union PAL pays a marketplace nothing. That is the whole reason it gets left out of most lists, and it is why we are naming it first rather than last.

What to avoid, and why

At a 400 to 500 score you will be marketed to heavily, and the offers that arrive fastest are usually the worst ones.

Payday and no-credit-check loans

A payday loan charging a $15 fee per $100 borrowed over a two-week term works out near 390% once annualized, because that 15% cost repeats roughly 26 times a year. The structure is the problem more than the single fee: the loan is due in full on your next payday, which is the same payday that was already short, so a large share of borrowers take another loan to cover the first. Compare that with a PAL at a 28% cap over up to six months and the gap is not marginal.

Anyone asking for money before they lend you money

Advance-fee fraud follows low credit scores closely. A legitimate lender takes fees out of the loan proceeds or adds them to the balance. Nobody who is genuinely about to lend you $1,000 needs $200 from you first, whatever it is called.

Credit repair firms promising to remove accurate information

Accurate negative information cannot be removed before it ages off. Anything you can pay a company to do, you can do yourself free: pull the reports, dispute genuine errors, and wait out the rest.

The fastest realistic way up

Payment history and amounts owed are the two heaviest factors in a FICO score, which makes them the two worth attacking first. What follows is ordered by how quickly it tends to show up.

1. Dispute errors. Free, and the only route that can move a score in weeks rather than months.
2. Get current on anything still open. An account that is late now keeps hurting you every month it stays late. One that is already charged off has done most of its damage.
3. Bring revolving balances down. Utilization is recalculated whenever your issuer reports, so this is the fastest lever you control directly.
4. Add one positive account and never miss it. A secured card or credit-builder loan paid on time every month for six to twelve months starts to outweigh old damage.
5. Stop applying. Each application is a hard inquiry, and a burst of them at a low score reads as distress to the next lender.

Be realistic about the timeline. Moving from the 400s into the 600s generally takes twelve to twenty-four months of clean history, and no single action shortcuts it. Our guide to improving your credit goes through each step in more detail, and bad credit loans covers what opens up as you cross 580 and then 620.

Frequently asked questions

Can I get a personal loan with a 400 credit score?

From a mainstream unsecured lender, almost certainly not. Most set a floor around 580. What remains available is a secured loan, a credit union Payday Alternative Loan capped at 28% APR, a co-signed loan, or a credit-builder loan. Any lender advertising an unsecured personal loan at 400 with no other conditions is worth reading very closely before you apply.

How bad is a 400 credit score?

It sits near the bottom of FICO’s Poor band, which runs 300 to 579. As of September 2025, 14.7% of US consumers were somewhere in that band. It closes off most unsecured credit and raises the price of what remains, but it is a recoverable position rather than a permanent one.

How long does it take to go from 500 to 600?

Usually twelve to twenty-four months of on-time payments and falling balances, assuming no new derogatory marks. If the low score comes from one disputed error rather than genuine delinquency, it can move far faster. If it comes from a bankruptcy, the item itself stays on your report for seven to ten years, though its weight fades well before it drops off.

Is a payday loan ever the right answer at this score?

Rarely. A typical two-week payday loan at $15 per $100 annualizes to roughly 390%, and it is due in full on the payday that was already short. A credit union PAL covers a similar amount at a 28% cap over up to six months. Compare the two before deciding, and treat payday borrowing as a last resort rather than a first stop.

Will checking my own score lower it?

No. Checking your own credit is a soft inquiry and has no effect. Only a hard inquiry from a lender you have applied to affects your score, and each costs a few points and stays on your report for two years.

What is the minimum credit score for a personal loan?

There is no single legal minimum, but most mainstream unsecured lenders set their own floor between 580 and 640. Below that, approval generally depends on collateral, a co-signer, or a lender that specialises in subprime credit at a correspondingly higher rate.

Sources. Score distribution from Experian consumer credit data, September 2025. Average FICO Score from FICO’s Credit Insights Report, March 2026. Payday Alternative Loan terms from the National Credit Union Administration. Average personal loan and credit card rates from the Federal Reserve Board’s G.19 Consumer Credit release. We update these figures when new data is published. Fully revised 15 September 2026.

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