504 Credit score: What You Need to Know in 2025

Who Has a 504 Credit Score?

While age is not an explicit factor in calculating credit scores, there is a clear trend of scores improving over time. According to 2023 data from Experian, the average FICO score increases steadily with each generation:

• Generation Z (ages 18-26): 680
• Millennials (ages 27-42): 690
• Generation X (ages 43-58): 709
• Baby Boomers (ages 59-77): 745
• Silent Generation (ages 78+): 760

Credit Cards With a 504 Credit Score

A 504 credit score places you in the "poor" credit range, which can be a significant hurdle when applying for a new credit card. Lenders generally view scores in this range as high-risk, making it challenging to get approved for most unsecured cards from major issuers. Consequently, your options will likely be restricted to secured credit cards or unsecured cards specifically designed for rebuilding credit, which may come with higher interest rates and fees.

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Kudos offers AI-powered tools that analyze your spending habits and financial goals to provide personalized credit card recommendations from a database of nearly 3,000 cards. This process helps you find cards that match your preferences, such as those for building credit, while also providing credit score insights to ensure you make an informed decision.

Auto Loans and a 504 Credit Score

A 504 credit score places you in the subprime borrower category, which means that while you can likely still get an auto loan, it will come at a cost. Lenders view this score as higher risk, so they will typically charge significantly higher interest rates than they would for applicants with better credit.

According to 2025 market data, here is how average interest rates break down across the different credit score tiers:

• Super-prime (781-850): 5.25% for new cars and 7.13% for used cars.
• Prime (661-780): 6.87% for new cars and 9.36% for used cars.
• Non-prime (601-660): 9.83% for new cars and 13.92% for used cars.
• Subprime (501-600): 13.18% for new cars and 18.86% for used cars.
• Deep subprime (300-500): 15.77% for new cars and 21.55% for used cars.

Mortgages at a 504 Credit Score

With a 504 credit score, your mortgage options are quite limited, as most conventional lenders require a score of at least 620. Your most viable path is likely an FHA loan, which has minimum credit score requirements down to 500. However, to qualify with a score this low, you will need to provide a down payment of at least 10%.

Securing a loan with a 504 score also means facing less favorable terms. You can expect significantly higher interest rates, larger fees, and a much stricter underwriting process. Lenders view this score as high-risk, resulting in higher monthly payments and a more challenging approval process than for borrowers with stronger credit.

What's in a Credit Score?

Understanding your credit score can feel like trying to solve a complex puzzle, as it's a blend of several key financial habits. The most common factors that determine your score include:

• Your payment history tracks whether you have paid past credit accounts on time.
• Credit utilization is the percentage of your available credit that you are currently using.
• The length of your credit history considers the age of your oldest account and the average age of all your accounts.
• Credit mix refers to the variety of credit products you have, such as credit cards, retail accounts, and loans.
• New credit inquiries and recently opened accounts can also temporarily impact your score.

How to Improve Your 504 Credit Score

No matter how low your score has dropped, it is always possible to improve it. While it takes time and consistent effort, following proven methods can help you build a healthier credit profile and boost your 504 score.

• Monitor your credit reports regularly. A 504 score could be the result of errors or inaccuracies, and checking your reports helps you spot and dispute them. This also allows you to track your progress and ensure no fraudulent activity is damaging your credit.
• Set up automatic bill payments. Payment history is the single biggest factor in your credit score, so even one late payment can be damaging. Automating payments ensures you never miss a due date, which is a critical step in rebuilding your credit.
• Lower your credit utilization ratio. Maxed-out credit cards can significantly lower your score, so keeping your balance below 30% of your limit is recommended. Paying down balances can quickly improve this ratio and give your score a much-needed lift.
• Become an authorized user. If you have a trusted friend or family member with a good credit history, being added to their account can help your 504 score. Their positive payment history and low credit utilization will be added to your credit file, which can provide a fast boost.

For tools and resources to help you find the right credit products for your journey, Kudos can help you maximize rewards while you build your credit.