400 Credit Score: Meaning, Borrowing Options & How to Fix (2024)

A 400 credit score is a bad credit score, unfortunately, as it’s a lot closer to the lowest score possible (300) than the highest credit score (850). It indicates you’ve had significant payment problems in the past, perhaps even to the extent of going through bankruptcy or having your home foreclosed, which signals risk to potential lenders. As a result, a 400 credit score will make it difficult to qualify for a loan or unsecured credit card, and you will need to focus on rebuilding your credit before trying to get a mortgage, car loan, etc.

Key Things to Know About a 400 Credit Score

• Credit Rating: 400 is considered a bad credit score.
• What Borrowing Options Are Available: Most borrowing options are available, except for FHA-backed home loans. The terms of any loan options will not be attractive. For example, you could borrow a small amount with certain unsecured credit cards or a personal loan with no credit check, but the interest rates and fees will be high.
• Best Way to Improve a 400 Credit Score: Apply for a credit card with no credit check and pay the bill on time every month.

If you sign up for a free WalletHub account, you can also get a personalized credit analysis, which will tell you exactly what you need to improve and how to do it. In addition, you can check your latest credit score for free on WalletHub to see exactly where you stand.

Check Your Latest Credit Score – 100% Free

Below, you can learn more about what a 400 credit score can get you and how to fix your situation.

What Does a 400 Credit Score Get You?

Note: It may be possible to qualify for an unsecured credit card, personal loan, auto loan or home loan in rare cases, but the terms are unlikely to be worthwhile. If you apply for the average offer, you’re more likely to be rejected than approved.

Opinions are our own. This content is not provided, commissioned or endorsed by any issuer.

Credit Cards with a 400 Credit Score

The best type of credit card for a 400 credit score is a secured credit card with no credit check when you apply. These credit cards offer high odds of approval even for people with the lowest credit score possible because your credit history doesn’t factor into the approval decision.

Popular Credit Cards for a 400 Credit Score

Car Loans with a 400 Credit Score

Less than 7% of auto loans go to people with a credit score in the 300-539 range, and the share of loans given to applicants with a 400 credit score in particular is likely just a small fraction of that.

As a result, your odds of getting approved for a decent auto loan are slim. You will need to compare your options carefully and consider either placing a bigger down payment or purchasing a vehicle that’s less expensive.

Mortgages with a 400 Credit Score

Well under 1% of first mortgages go to people with a 400 credit score, in part because FHA-backed home loans require a minimum score of 500. Working to improve your credit score before you apply will make it much easier to get approved and will save you a lot of money on interest and fees.

Student Loans with a 400 Credit Score

Student loans are among the easiest loans to get when you have a low credit score, considering that nearly 25% of them are given to applicants with a credit score of 300-539. A new degree may also make it easier to repay the loan if it leads to more income.

Note: Borrower percentages above are based on data from Equifax (Q3 2017).

How to Fix a 400 Credit Score

If you want personalized credit-improvement advice, just sign up for a free WalletHub account and check out the credit analysis page. You’ll find grades for each part of your credit score, telling you exactly what to fix, as well as specific advice for how to improve each area.

Below, you’ll find some of the most important pointers, which typically apply to most people with a 400 credit score.

1. Avoid Quick Fixes: Any company that advertises the ability to quickly “repair” or “fix” your credit is a scam. There are no fast solutions to bad credit. Recovery is a process that will likely take at least 12-18 months, just to progress to a “fair” rating.
2. Review Credit Reports for Errors: Your “bad” rating may be the result, at least in part, of erroneous information on your credit reports. So check your latest credit report for things like accounts you didn’t open and on-time payments mistakenly listed as late.
   And dispute any inaccurate records you find.
3. Catch Up on Missed Payments: If you’ve missed some monthly payments, making them up could help prevent credit score damage from worsening, assuming your account hasn’t defaulted yet. At that point, the damage from delinquency will already be done, and your top concerns will be a collections account and a lawsuit. Both are bad for your credit score, but both can be avoided by repaying amounts owed.
4. Explore Debt Solutions: When you have a lot of debt, it can seem like you’re out of options. But that’s not the case. There are several avenues you can explore for some measure of relief. For example, you could try to negotiate a debt settlement agreement, whereby some of your balance will be forgiven in exchange for you repaying the rest right away. Or you could propose a new payment plan to your creditor, also known as debt management. Even something as simple as consulting a non-profit credit counselor could go a long way.
   So at the very least, it’s worth considering how the most popular debt solutions compare and apply to your situation.
5. Get a Secured Credit Card: Unsecured credit cards for bad credit tend to be a bad deal, offering little in the way of a loan at a hefty cost. And since a credit card is the most accessible credit-building tool available to consumers, it’s best to simply open a secured credit card. Secured cards are unique in that they require users to place a refundable security deposit, the amount of which serves as their spending limit. This protects issuers from risk, which enables them to charge minimal fees and offer nearly guaranteed acceptance.
6. Always Pay on Time Moving Forward: Payment history accounts for the lion’s share of your credit score, and every month provides a new opportunity to improve in this regard. Each month you pay your credit card bill by the due date covers up previous mistakes just a bit, gradually establishing a new track record of responsibility.
   The best part is you don’t even need to use your credit card to benefit. If you don’t make any purchases, you’ll still be credited as paying on time when the issuer reports account information to the major credit bureaus each month. So if you don’t trust yourself to spend responsibly, remove temptation by locking your card in a drawer.
7. Add to Your Deposit Over Time: The more credit extended to you, the faster your credit score will rise. And since you have control over your credit line when using a secured card, you can expedite your credit building efforts by simply depositing more money. Don’t worry, you’ll get your deposit back, minus any outstanding balances and fees (if any), when you close your account.
8. Build an Emergency Fund: Setting money aside for financial emergencies won’t itself improve your credit score, but it will insulate you from the types of unforeseen events that could completely derail your credit building efforts. In fact, it’s best to begin feeding an emergency fund before focusing on getting out of debt – if you have any.

Top 10 Resources for a 400 Credit Score

1. Bad Credit Guide
2. Why Did My Credit Score Drop? Top 10 Causes
3. Free Credit Score Simulator
7. How To Improve Your Credit Utilization

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