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396 Credit Score: Good Or Bad (Can I Fix It)?

  • A 396 credit score indicates serious credit problems and limits financial options.
  • To improve, pay bills on time and check for errors in your credit report.
  • Call The Credit Pros for guidance to address your credit issues and potential bankruptcy.

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A 396 credit score shows you have serious credit issues. Key problems include poor payment history, high credit utilization, and negative marks. This low score can limit your options for loans, mortgages, or even renting an apartment. You need to act quickly to improve your score.

To recover, pay your bills on time and keep your credit utilization under 30%. Check your credit report for errors and dispute any inaccuracies. If you feel overwhelmed, call The Credit Pros. We’ll review your credit report and guide you based on your situation.

Start improving your score now. The sooner you make these changes, the better your chances of securing loans or renting an apartment. Let The Credit Pros help you through this process with a simple, no-pressure chat about your credit health.

On This Page:

    Why Is My Credit Score Only 396?

    Your credit score is only 396 due to a few main reasons: poor payment history, high credit utilization, and negative marks on your credit report.

    1. Poor Payment History: Missing payments, especially recent ones, greatly harms your score. Late payments can linger on your report for up to seven years, making recovery challenging.

    2. High Credit Utilization: If you use a significant portion of your available credit, it raises concerns for lenders. You should aim to maintain your utilization below 30% of your total credit limit.

    3. Negative Marks: Accounts in collections, bankruptcies, or foreclosures drastically lower your score. Even minor issues like unpaid parking tickets can leave a negative impact.

    4. Limited Credit History: If you lack a long credit history, this can hurt your score. Lenders prefer to see a diverse mix of credit types over time.

    5. Recent Hard Inquiries: Applying for new credit results in hard inquiries, which can temporarily decrease your score.

    To enhance your score, you should focus on making consistent, timely payments, reducing your credit utilization, and addressing negative marks. We advise you to sign up for a free credit analysis with WalletHub to receive personalized guidance. Additionally, monitor your credit report regularly to track your progress.

    On the whole, to improve your credit score, prioritize timely payments, manage your credit utilization wisely, and address any negative records.

    5 Best Ways To Recover From A 396 Credit Score?

    To recover from a 396 credit score, follow these five practical steps:

    1. Pay Your Bills on Time: Your payment history has the biggest impact on your credit score. Set automatic payments or reminders to avoid missing due dates. Focus first on settling past-due bills.

    2. Check for Errors on Your Credit Report: Obtain your free credit reports and look for inaccuracies. Dispute any errors you find. Correcting mistakes can lead to an immediate boost in your score.

    3. Manage Your Credit Utilization: Keep your credit utilization below 30%. Pay off credit card balances before the billing cycle ends to show a lower utilization ratio to creditors.

    4. Open a Secured Credit Card: If possible, get a secured credit card. Make small purchases and pay off the full balance each month. This helps build a positive credit history.

    5. Become an Authorized User: Ask a family member with good credit to add you as an authorized user on their credit card. This can add their positive payment history to your credit report.

    Implementing these steps can gradually improve your score. Bottom line - stay proactive by paying bills on time, correcting errors, managing your credit utilization, using a secured card, and leveraging a family member’s good credit. You can take control of your credit journey and move towards a healthier score.

    Major Factors That Keep My Credit Score So Low?

    Several major factors keep your credit score low. Here’s a breakdown for you:

    1. **Payment History**: This accounts for 35% of your score. Frequent late payments, defaults, or collections can hurt you. Always make your payments on time to improve.

    2. **Credit Utilization Ratio**: This represents 30% of your score. Maxing out credit cards or maintaining high balances can lower your score. Keep your utilization under 30% to stay on track.

    3. **Length of Credit History**: This makes up 15% of your score. A short credit history can negatively impact you. Maintain older accounts to boost your score.

    4. **Credit Mix**: Comprising 10% of your score, having a variety of credit types, like credit cards and loans, helps improve your score. Aim for a healthy mix.

    5. **New Credit Inquiries**: Also 10%. Frequent applications for new credit create hard inquiries and can decrease your score. Limit these requests to protect your score.

    6. **Derogatory Marks**: Public records, such as bankruptcies or collections, severely impact your score. These marks can stay on your report for several years.

    7. **Errors on Credit Reports**: Mistakes can lower your score, like incorrect account statuses. Regularly check your credit report for errors and dispute any inaccuracies.

    Each factor significantly contributes to your low score. Addressing them can lead to improvements over time. In a nutshell, focus on making timely payments, managing credit utilization, maintaining older accounts, diversifying your credit types, and correcting errors to gradually improve your credit score.

    Can My 396 Credit Score Drop Any Lower (Can I Prevent It)

    Yes, your 396 credit score can drop lower, especially if you have ongoing payment issues. This score falls into the "Very Poor" category, making your financial behavior critical. A missed payment or new debt can negatively impact your score further.

    To prevent your score from dropping, you should maintain on-time payments for all your bills. If you are late by just a few days, it may not be reported, but a delay of over 30 days can cause significant damage. Regularly check your credit reports for errors or discrepancies that could affect your score.

    Consider reaching out to your creditors for potential forgiveness on missed payments. They may help if you explain your situation. Also, limit applications for new credit, as each one can lower your score temporarily. If you think about applying for a secured credit card, that could help rebuild your score over time.

    Be proactive by engaging with credit monitoring services like WalletHub to track changes and improvements in your score. All in all, focus on making timely payments, checking your credit reports, and seeking help when needed to stabilize your credit situation and prevent further drops.

    Inaccuracies hurting your Credit Score?
    Securely review your full 3-bureau Credit Report (with a real expert).

    By clicking ‘Get Started’ I agree by electronic signature to: (1) be contacted by The Credit Pros by a live agent, artificial or prerecorded voice, and SMS text at my residential or cellular number, dialed manually or by autodialer even if my phone number is on a do-not-call registry (consent to be contacted is not a condition to purchase services); and (2) the Privacy Policy and Terms of Use.

    How Long Will It Take To Improve My 396 Credit Score?

    Improving your 396 credit score typically takes one to several months, depending on your financial situation and actions you take. The exact time can vary based on how often your lenders report to credit bureaus and the types of negative items affecting your score.

    If you find inaccuracies on your credit report, correcting them can lead to faster improvements. In some cases, you might see changes within one to two months after addressing issues like late payments. Establishing good habits, such as setting up automatic payments and reducing debt, will positively influence your score.

    Consistent effort over time is crucial for rebuilding your credit. Focus on responsible financial behavior to see results. We advise you to regularly check your credit score for updates so you can measure your progress effectively.

    The gist of it is that you can improve your credit score by addressing inaccuracies, adopting good financial habits, and monitoring your progress consistently. Stay patient and focused on your goals.

    Can I Realistically Get A Mortgage With A 396 Credit Score?

    With a 396 credit score, you will find it highly unlikely to secure a mortgage. Lenders typically view scores below 580 as poor and often reject applications from borrowers in this range. A low score indicates higher risk, significantly impacting your approval chances.

    You might still have options. Some lenders offer FHA loans that accept scores as low as 500. However, you would need a down payment of at least 10%, compared to the standard 3.5%. This results in higher upfront costs.

    If you manage to get a mortgage, expect significantly higher interest rates. Lenders charge more for low scores due to the increased risk involved. Additionally, you may need to provide proof of stable income and consider a larger down payment to reduce the lender's risk.

    Remember, while getting a mortgage with a 396 credit score is possible, it comes with major challenges, higher costs, and limited options. Consider improving your credit score first to enhance your chances of approval and secure better terms.

    Can I Get A Personal Loan With A 396 Credit Score?

    Getting a personal loan with a 396 credit score is challenging. Most lenders require a minimum score of 560 to 660, which means you fall below the typical threshold. Lenders view you as a high risk, making it less likely they will approve your application, or if they do, the terms will be strict.

    However, some lenders may still consider you. Here’s what you can do:

    • Check with credit unions—they often have more flexible requirements.
    • Research specialized lenders that focus on loans for bad credit, bearing in mind that these loans may come with higher interest rates.
    • Explore secured loans where you provide collateral to back the loan.
    • Consider finding a co-signer with better credit to improve your chances.

    Remember, applying for a loan can result in a hard inquiry that may temporarily lower your score. As you explore loan options, focus on improving your credit score. Tools like WalletHub can offer personalized advice to help you raise your score.

    At the end of the day, while obtaining a loan with your credit score is tough, you still have options. Be proactive in improving your credit and seek out lenders who work with people in your situation.

    Can I Buy Or Lease A Car With A 396 Credit Score?

    You can buy or lease a car with a 396 credit score, but it will be challenging. Your credit score falls into the "Very Poor" category, making you a high-risk borrower in the eyes of lenders. While there’s no official minimum credit score for leasing, most dealerships prefer scores of 620 or higher for better terms.

    If you get approved for a lease, expect several obstacles:
    • Higher interest rates, leading to increased monthly payments.
    • A larger down payment may be required.
    • Lenders will closely scrutinize your credit history.

    To improve your chances, you should take steps to raise your credit score before applying. Focus on paying off outstanding debts and managing your current credit utilization effectively. Keep in mind that leasing with a poor credit score often comes with less-than-ideal terms.

    Lastly, consider reviewing options to recover from a 396 credit score, as they can offer valuable insights and strategies for improvement.

    Inaccuracies hurting your Credit Score?
    Securely review your full 3-bureau Credit Report (with a real expert).

    By clicking ‘Get Started’ I agree by electronic signature to: (1) be contacted by The Credit Pros by a live agent, artificial or prerecorded voice, and SMS text at my residential or cellular number, dialed manually or by autodialer even if my phone number is on a do-not-call registry (consent to be contacted is not a condition to purchase services); and (2) the Privacy Policy and Terms of Use.

    What Is The Best Method To Fix A 396 Credit Score?

    To fix a 396 credit score, you should first obtain your credit report. Analyze it closely to identify any inaccurate negative items; disputing these can help improve your score. Focus on your payment history and ensure you pay all bills on time, as late payments can significantly harm your score.

    Next, work on reducing your credit utilization. Aim to keep credit card balances below 30% of your limit. If possible, pay off high balances entirely to see a positive effect on your credit.

    Consider using a secured credit card. These cards require a deposit, but they can help you rebuild your credit when used responsibly. Always pay your balance in full each month.

    Additionally, maintain a budget to manage expenses and ensure timely payments. If your debts feel overwhelming, seek advice from a reputable credit repair company like The Credit Pros, who specialize in helping individuals with poor credit scores.

    Finally, stay informed about your progress. Regularly check your credit score through services like WalletHub. Monitoring your score helps you understand which strategies are effective and lets you make necessary adjustments. Take these actionable steps, and remember, with persistence and responsible habits, you can improve your credit score.

    Credit Card (Secured Or Unsecured) Options With A 396 Credit Score?

    With a credit score of 396, you face significant challenges when applying for credit cards. Secured credit cards are your best option. They require a cash deposit that serves as your credit limit, making you a less risky borrower to lenders.

    Here are specific secured card options:

    • Capital One Platinum Secured Credit Card: This card needs a refundable deposit starting at $49, offering a minimum credit limit of $200. It’s a solid choice for rebuilding your credit.

    • Discover it® Secured Credit Card: This card not only helps rebuild your credit but also offers cash back on purchases. Your deposit will reflect your credit limit.

    Your unsecured options will be limited with a low credit score. Most unsecured cards require higher scores. Some may accept you but likely charge high fees and interest rates. Be cautious, as many cards for low-credit borrowers come with unfavorable terms.

    Big picture—you should focus on keeping your balances low and making on-time payments. This strategy will help improve your credit score and open up more credit options in the future.

    Should I Become An Authorized User With A Poor Credit Score?

    Becoming an authorized user with a poor credit score can be a beneficial move. You gain access to the primary cardholder's positive credit history, which can help improve your score. If they make timely payments, that history reflects well on your credit report.

    However, consider the risks involved. If the primary user misses payments or maintains high balances, your credit score may drop. You also lack control over spending and payments, so it's important to maintain clear communication with the primary cardholder about how they manage the account.

    Before proceeding, confirm that the credit card issuer reports authorized user activity to credit bureaus. Otherwise, you may not see any benefits. Remember, while you can make purchases, you're not responsible for paying the balance. This can be a mixed bag; it offers convenience but could jeopardize your credit recovery if the account isn't managed wisely.

    We advise you to weigh the pros and cons carefully. Explore alternatives like credit builder loans or debt negotiation, which may also improve your credit situation. Overall, take proactive steps to enhance your credit profile and work towards a healthier financial future.

    Which Negative Marks On My Credit Report Affect My 396 Score?

    Negative marks on your credit report can significantly affect your 396 credit score. Here are the types of negative items that impact your score, ranked from most to least impactful:

    • Late Payments: A history of late payments can remain on your credit report for up to seven years. These missed payments greatly decrease your credit score.

    • Defaults: Defaulting on loans or credit cards also stays on your report for seven years. This shows lenders you might not reliably repay debt.

    • Bankruptcies: Bankruptcy can severely damage your score and stay on your report for up to seven years from the discharge date. It indicates serious financial distress.

    • Settlements: Settling a debt for less than what you owe can similarly affect your score and remain visible for seven years. Settlements suggest to lenders you are unable to pay your debts in full.

    • Court Judgments: Civil court judgments related to unpaid debts can appear on your report for seven years. This signals to lenders that you are a high-risk borrower.

    Each of these negative marks can lower your score even further, especially at a level as low as 396. To improve your situation, focus on paying bills on time and addressing any existing negative items on your credit report. As a final point, take actionable steps to rebuild your credit score, as every effort you make contributes to a better financial future.

    Inaccuracies hurting your Credit Score?
    Securely review your full 3-bureau Credit Report (with a real expert).

    By clicking ‘Get Started’ I agree by electronic signature to: (1) be contacted by The Credit Pros by a live agent, artificial or prerecorded voice, and SMS text at my residential or cellular number, dialed manually or by autodialer even if my phone number is on a do-not-call registry (consent to be contacted is not a condition to purchase services); and (2) the Privacy Policy and Terms of Use.

    Should I Negotiate And Pay Off Debts To Improve My Bad Credit Score?

    Yes, you should negotiate and pay off debts to improve your bad credit score. When you negotiate with your creditors, you may secure lower amounts owed or better repayment terms. This action can lighten your financial burden and enhance your credit health.

    If you settle a debt, you often pay less than the total owed. While this may temporarily hurt your credit score, it’s still preferable to leaving debts unpaid. Unaddressed debts can go to collections, leading to further damage to your credit score.

    Remember, settling a debt remains on your credit report for seven years. However, taking this proactive step is better than ignoring your obligations, as it can lead to greater financial stability.

    Engage with your lenders directly. They might prefer negotiating rather than losing their investment. Propose a repayment plan that suits you. Additionally, knowing your current credit score can help strengthen your position during negotiations.

    If your debt exceeds what you can handle, consider reputable third-party debt relief companies. They can assist with negotiations, but ensure you understand any fees involved.

    To put it simply, negotiating and settling your debts can pave the way for an improved credit score over time. Focus on what you can pay off and work toward regaining control of your finances.

    Best Site To Monitor My Credit Report?

    For you seeking the best site to monitor your credit report, we recommend Experian. This service offers free credit monitoring with real-time alerts about any changes to your report. You receive notifications for new accounts, inquiries, and suspicious activities.

    CreditWise from Capital One is another excellent, free option. It allows you to access your credit report and includes dark web scanning features. You don’t need a Capital One account to sign up, making it easily accessible for everyone.

    Additionally, myFICO provides comprehensive tools to help you monitor your credit score. It focuses on FICO scores, which many lenders use, giving you a clearer understanding of your credit health.

    These services empower you to keep tabs on your credit status, manage potential identity theft, and understand your financial standing better. For tailored advice or expert help, consider working with The Credit Pros, who specialize in in-depth monitoring and improving your scores.

    In short, for effective credit report monitoring, you can choose Experian, CreditWise, or myFICO, each offering valuable tools to help you stay informed and secure.

    Should I Consider A Credit Builder Loan?

    Yes, you should consider a credit builder loan if your credit score is low, like a 396. A credit builder loan helps you establish a positive payment history, which is critical since payment history accounts for 35% of your credit score. When you make on-time payments, those payments get reported to the major credit bureaus. Over time, this can significantly boost your score.

    Credit builder loans are ideal for those with poor or no credit history. Most lenders have minimal credit requirements, often just proof of income or employment. This means you can apply even with your current score. However, be aware that these loans come with costs—interest rates typically range from 6% to 16%.

    Ensure the loan reports to all three major credit bureaus: Experian, TransUnion, and Equifax. This helps you build credit effectively across the board. Instead of receiving immediate cash, you make payments into a secured account until you complete the loan term, after which you receive the money.

    Before applying, assess how much you can afford to pay monthly. Late payments can hurt your credit even more. Finally, consider your options—sometimes a secured credit card or becoming an authorized user may be appropriate alternatives.

    To finish, if you have a low credit score, a credit builder loan can be an excellent way to improve your credit. Just be sure to make timely payments and check the terms to ensure it fits your budget.

    Is A 396 Credit Score Different Between Fico And Vantage

    Yes, a 396 credit score can be different between FICO and VantageScore. Both scoring models use distinct algorithms, which results in varied scores.

    FICO scores usually detail your credit health based on a wide array of factors, while VantageScore employs a simpler model. Despite both systems ranging from 300 to 850, a score of 396 is considered poor in each system. However, the elements influencing these scores can diverge.

    For example, VantageScore takes into account non-traditional credit accounts, while FICO relies more on your traditional credit history. If you have utility payments or similar accounts, they could impact your VantageScore differently.

    To fully understand your credit scores, check both FICO and VantageScore models. They can provide insights into your credit health, and knowing both empowers you to improve your score effectively. If you're looking for ways to enhance your credit rating, explore our article section titled "5 best ways to recover from a 396 credit score."

    In essence, understanding how your 396 credit score varies between FICO and VantageScore is crucial for improving your credit health. You should check both scores to identify actionable steps for enhancement.

    Inaccuracies hurting your Credit Score?
    Securely review your full 3-bureau Credit Report (with a real expert).

    By clicking ‘Get Started’ I agree by electronic signature to: (1) be contacted by The Credit Pros by a live agent, artificial or prerecorded voice, and SMS text at my residential or cellular number, dialed manually or by autodialer even if my phone number is on a do-not-call registry (consent to be contacted is not a condition to purchase services); and (2) the Privacy Policy and Terms of Use.

    Will A 396 Credit Score Affect My Chances Of Renting An Apartment?

    Yes, a 396 credit score will greatly affect your chances of renting an apartment. Most landlords check your credit before approving your application. They look for signals that indicate you can pay your rent on time. With a score of 396, which is very low, many landlords may reject your application.

    Many landlords prefer a minimum score of around 650. Your lower score makes you appear as a higher risk tenant. This may result in a denial of your application or the need for higher security deposits or a co-signer to offset the perceived risk.

    If you're worried about your chances, focus on improving your credit score. You can take actionable steps such as paying your bills on time and managing your existing debt. Keep in mind that each landlord has their own criteria, so some may consider your application if you provide additional documentation or assurances. It’s wise to check your credit report for any issues to address beforehand.

    To wrap up, a 396 credit score can hinder your chances of securing an apartment. We advise you to work on improving your credit, check for any issues in your report, and be prepared to provide additional documentation if needed.

    Can A Credit Repair Company Actually Boost My Low Score

    Yes, a credit repair company can boost your low credit score, but only if specific conditions are met. You may see improvements if there are inaccuracies on your credit report that can be disputed. Credit repair companies are experts in identifying and contesting these errors with major credit bureaus. When inaccuracies are corrected or removed, your credit score may improve.

    However, remember that credit repair companies can’t perform miracles. They can only help with disputes regarding inaccurate negative items. If your negative marks are accurate, no efforts from a credit repair company will change that. You have the right to dispute inaccuracies on your own, which is often a cost-effective approach.

    To recap, while a credit repair company can assist in improving your score, you can take similar steps yourself. Regularly check your credit report, identify mistakes, and dispute them. If this process feels overwhelming, consider working with a reputable credit repair service. On the whole, empower yourself by educating and taking charge of your credit repair journey.

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