A credit score of at least 580 to 601 is usually considered a fair credit score, depending on the scoring model. The two most common models — FICO® and VantageScore — each weigh factors slightly differently. FICO® considers 580 to 669 a fair credit score, and VantageScore considers 601 to 660 a fair score.

Each credit-scoring model uses a unique formula to calculate credit scores based on the information in your credit reports. A fair credit score will often get you access to loans and credit cards, but not at the best rates and terms. 

And keep in mind that different lenders have their own standards for rating credit scores. Credit Karma offers free VantageScore 3.0 credit scores from Equifax and TransUnion.

• What is fair credit?
• What are the benefits of good credit scores?
• Next steps: Monitoring your progress
• FAQs about fair credit scores

What is fair credit?

Having fair credit generally means your credit history has some blemishes or is relatively limited, but it hasn’t fallen into the “bad” credit range. Lenders may view you as a subprime borrower, which signals a higher risk than borrowers with a good credit score.

From a lender’s perspective, fair credit suggests you’re willing to pay your debts but there might be red flags, such as … 

• High credit card balances
• A short credit history
• A few late payments in your past

Because of this perceived risk, some lenders may still be willing to lend to you, but they may charge higher interest rates or require additional security deposits.

The three major consumer credit bureaus — Equifax, Experian and TransUnion — may each have different information about you on file since not all creditors report to each bureau. Because your scores are based on this data, a lender checking your TransUnion report might see a slightly different picture than one checking your Experian report. 

Different credit-scoring models also weigh information in your credit reports differently, so your scores will likely have some variability.  

What is good credit

A good credit score is usually considered 670 to 739 by FICO® and 661 to 780 by VantageScore®. A good credit score will likely get you better terms and rates than a fair credit score, but keep in mind that to access the most competitive rates, you’ll likely need a score of 740 or better. 

VantageScore® credit score ranges

Many top banks, lenders and card issuers use VantageScore 3.0. While there are multiple VantageScore scores, Credit Karma provides scores from the VantageScore 3.0 credit scoring model. 

On a standard credit score range of 300 to 850, a fair VantageScore 3.0 is between 601 and 660.

• 300–600: Poor
• 601–660: Fair
• 661–780: Good
• 781–850: Excellent

FICO® credit score ranges

FICO® scores are also used by many lenders. While VantageScore and FICO versions have similarities, their ranges differ slightly. A fair FICO^® Score 8 credit score is between 580 and 669.

• 300–579: Poor
• 580–669: Fair
• 670–739: Good
• 740–799: Very Good
• 800–855: Exceptional

What are the benefits of good credit scores?

Moving your scores out of the “fair” range and into the “good” range can have a real impact on your financial life. While fair credit usually allows you to access credit, having good credit scores can improve your options in several key ways.

Better credit card offers

Credit card issuers typically reserve their best card offers — including cards with rewards, cash back and introductory APRs — for people with excellent or good credit. With fair credit, you may be limited to secured cards or cards with fewer perks or lower credit limits.

Lower interest rates

In general, people with higher credit scores are more likely to qualify for lower rates on personal loans, auto loans and mortgages. Lenders view these borrowers as lower risk and offer better terms to win their business.

Those lower rates can make a meaningful difference in how much you pay over time.

For example, let’s say you wanted to take out a personal loan for $10,000 with a three-year repayment plan. If you receive a 7% interest rate versus a 17% interest rate, you’ll save more than $1,700 in interest over the life of the loan. 

A debt repayment calculator can help you figure out exactly how much to pay each month and when you’ll finish paying off your debt.

Lower insurance premiums

In some states, insurance carriers can use credit-based insurance scores, such as a home insurance score, to help determine your premiums for auto or home insurance. Studies have shown a correlation between credit history and insurance claims, so people with better credit tend to pay less for coverage.

More rental options

Landlords often run a background check — which may include a credit check — before renting an apartment or house to a tenant. If you have fair credit, a landlord might require a larger security deposit or a cosigner. In competitive rental markets, higher scores can give you an edge over other applicants.

Next steps: Monitoring your progress

Improving a fair credit score takes time, consistency and understanding your credit scores. Scoring models typically focus on these five credit score factors.

• Payment history — This is typically the most important factor and looks at whether you have a track record of paying on time.  
• Amounts owed — This is typically the second-most important factor and takes into account your credit utilization rate, or how much debt you carry compared to how much available credit you have across your accounts. 
• Length of credit history — This considers the age of your accounts, including your longest and shortest accounts and average age.
• Credit mix — This refers to the different types of credit you may have, such as a credit card and an auto loan. A mix of types can show you know how to handle different types of financial products. 
• New credit — This considers the amount of new credit applications you’ve sent in recently and is affected every time a lender does a hard credit check on your credit report.

Focusing on positive habits — like paying on time and reducing your debt — can help you gradually move your score into the “good” range. Routinely checking your credit report to dispute errors you find is also important.

For more quick tips, check out our guide to improving your credit score.

A no-interest loan may sound like the perfect solution when you’re short on cash. But no interest may not mean no cost.

Some popular cash advance and buy-now, pay-later apps offer short-term zero-interest loans but may charge fees that can increase the amount you have to repay. Here are our picks for the best no-interest loans.

• Best for low fees: Earnin
• Best for managing your finances: MoneyLion
• Best for peer-to-peer loans: Chime
• Best for buy-now-pay-later: Affirm
• Best for building credit: Sezzle
• What are no-interest loans? 
• Can you get an interest-free loan?
• When is a no-interest loan a good idea?
• Alternatives to no-interest loans
• FAQs about zero interest loans

Best for low fees: Earnin

Why Earnin stands out: With Earnin, you can receive interest-free cash advances of up to $750 per pay period while waiting for your next paycheck. Earnin doesn’t charge mandatory fees for standard transfers, which take one to three business days. If you need the money sooner, you may be able to get it in minutes using Lightning Speed for a fee.  

Pros

• No credit check
• Tips are optional, not required
• Overdraft protection with low-balance alerts

Cons

• Need a steady paycheck, direct deposit into a checking account and a fixed work location or an employee-provided email address to use the app

Read our full review of Earnin to learn more.

Best for managing your finances: MoneyLion

Here’s why MoneyLion stands out: With MoneyLion, you can track your finances, buy cryptocurrency and invest your spare change.

Pros

• Free cash advance in 1-5 days
• No credit check required
• Cash advances up to $500 without a RoarMoney account

Cons

• Can only access $1,000 cash advances with RoarMoney which requires recurring direct deposits

Read our full review of MoneyLion to learn more.

Best for peer-to-peer loans: Chime

Here’s why Chime stands out: You can receive loans from family and friends (even if they don’t have a Chime account) without using cash apps like Zelle or Venmo as long as you have a valid debit card or Chime checking account.

Pros

• No transfer, monthly, minimum or overdraft fees
• SpotMe can cover up to $200 on Chime debit or credit card purchases without charging an overdraft fee
• Access to financial products and services like secured credit card and high-yield savings accounts

Cons

• Charges fees for out-of-network ATMs or cash deposits

Best for buy-now, pay-later: Affirm

Here’s why Affirm stands out: Affirm is a company that allows retailers to offer installment loans before checkout. If available, you may be able to use Affirm as a payment method on participating retailer’s website or app. Affirm’s pay-in-four option may be 0% APR for some retailers. Larger loans offered through Affirm may not be interest-free.

Pros

• Some retailers offer 0% APR
• No late, service or prepayment fees
• Can pick a payment plan that works for you — but depending on what you choose you may pay interest

Cons

• No refunds for interest paid on returned items
• Down payment may be required

Learn more from reviews of Affirm.

Best for building credit: Sezzle

Here’s why Sezzle stands out: Sezzle is a buy-now, pay-later company that allows you to split up your purchase at checkout and includes thousands of retailers, such as Touch of Modern, Bass Pros Shops and Target.

After paying off one order on time or early, Sezzle users can upgrade to Sezzle Up. When you upgrade your account, Sezzle reports your payments to the credit bureaus, helping you establish a positive payment history when you pay on time.

Pros

• Reschedule one payment per order for free
• Reports payments to the credit bureaus

Cons

• Charges failed payment, rescheduled payment (if you reschedule more than one payment per order) and convenience fees
• Spending power may vary per order

Read our full review of Sezzle to learn more.

What are no-interest loans?

 No-interest loans, also known as zero interest loans, are loans that don’t charge interest. Zero interest loans are typically smaller loans like cash advance loans. But zero-interest or cash advance loans can have short turnaround times which may make repaying them more difficult. 

If you’re looking at a loan with an introductory financing offer that touts a 0% APR for a set period, make sure to keep an eye out for the fine print. Often, if you pay late, miss a payment or don’t pay your balance in full before the promotional period expires, the lender may charge interest retroactively.

Keep in mind that just because a loan offers zero interest, doesn’t necessarily mean the loan won’t have additional fees, especially if you want your money quickly. But a small fee to get money quickly in a pinch may be worthwhile — as long as you can repay the loan on time. 

Can you get an interest-free loan?

You may be able to get an interest-free loan. Requirements vary based on the loan type — and some borrowers may not be eligible. In some cases, no-interest loans have introductory offers that provide 0% APR for a set period.

You may find this type of financing on auto loans from a dealer, but you typically need a good credit score to qualify. Plus, auto financing offers often vary by model and may change based on manufacturer and dealer incentives, so 0% APR financing isn’t always available.

If you turn to a cash advance app for quick funds before your next paycheck, your credit scores may be less important because cash advance lenders might not check your credit. However, you typically need a checking account with a positive balance and a steady paycheck to show you can repay what you borrow.

Some buy-now, pay-later lenders perform a soft credit check to review your credit health. If you want to make a purchase with a buy-now, pay-later app, you’ll need to have a linked checking account, credit card or debit card to repay what you borrow.

When is a no-interest loan a good idea?

No-interest loans may be a good alternative to high-cost payday loans when you’re strapped for cash or want to pay off a large purchase over time. But there are a few things to know before getting one.

• Fees. No-interest loans may have fees attached to them, increasing the amount you have to repay. You can avoid some fees — including late, failed payment and express payment fees — by planning ahead. Others, such as potential subscription fees, can’t be avoided.
• Deferred interest. Introductory financing that promises 0% APR for a specific amount of time often comes with deferred interest. Interest accrues on your monthly balance, but the lender waives it during the promotional period. You avoid paying interest if you pay your balance in full before the promo period ends. If you don’t, or pay late or miss a payment, you’ll be responsible for all the interest accrued during the promotional period.
• Repayment timeline. No-interest loans often have short repayment terms.
• Impact on your credit. Some lenders that offer no-interest loans report missed payments to the credit bureaus, which can negatively affect your credit.

Alternatives to no-interest loans

If you’re not sure if a no-interest loan is right for you, here are some similar options that may work better for you. 

• 0% APR credit card — You can use it to buy what you need and pay for it over time. You’ll avoid paying interest if you pay on time and have a $0 balance when the promotional period expires. If not, you’ll likely be charged interest on the remaining balance. 
• Secured personal loan — Secured personal loans often offer lower interest rates than unsecured personal loans since your loan would be backed by collateral. But make sure you’ll be able to pay off your loan on time or else you’ll risk losing your collateral. 
• Payday alternative loan — Some federal credit unions offer payday alternative loans that have capped interest rates. While the interest rates are higher than zero interest loans, you may have more time to pay off your loan with a payday alternative loan. This could make it easier to ensure you’ll be able to pay off your loan by the end of the repayment period.

Our methodology: How we pick the best personal loans

Credit Karma’s editors evaluate the best personal loans by reviewing key features of dozens of popular lenders. Those features fall into three important categories:

• Affordability: We start by checking if a lender’s rates are competitive: are they higher than average or are they lower than many competitors? From there, we analyze if fees — particularly an origination fee — may make your loan more unaffordable. Last, we’ll check if the lender offers rate discounts for items such as automatic payments that may reduce your rate.
• Customer-friendly features: Taking out a personal loan is a big financial commitment, so we prioritize lenders that make things easier for you. For instance, do they offer a wide range of loan amounts for people with different borrowing needs? Do they offer at least several loan terms to give you more flexibility with your monthly payment? And, crucially, can they fund your loan quickly? A lender will also get bonus points for offering direct payments for debt consolidation or other customer-friendly features.
• Transparency: We believe personal loan terms should be easy to find and decipher. Prequalification, which lets you check what rate you may qualify for without a hard credit inquiry, is particularly important. We also check to see if a lender has been recently penalized by regulators.

FAQs about zero interest loans

*Approval Odds are not a guarantee of approval. Credit Karma determines Approval Odds by comparing your credit profile to other Credit Karma members who were approved for the personal loan, or whether you meet certain criteria determined by the lender. Of course, there’s no such thing as a sure thing, but knowing your Approval Odds may help you narrow down your choices. For example, you may not be approved because you don’t meet the lender’s “ability to pay standard” after they verify your income and employment; or, you already have the maximum number of accounts with that specific lender.

Whether you’re searching for your first card, trying to build your credit or simply looking for your next card, there a lot of available credit cards that may fit your needs. Here are our picks for the best credit cards for young adults.

• Best for no-hassle cash back: Wells Fargo Active Cash® Card
• Best for rotating categories: Chase Freedom Flex®
• Best for travel: Chase Sapphire Preferred® Card
• Best for travel with no annual fee: Bank of America® Travel Rewards credit card
• Best unsecured card for building credit: Capital One Platinum Credit Card
• Best secured card: Capital One Platinum Secured Credit Card
• How to make the most of credit cards for young adults
• How we picked these cards
• FAQs about credit cards for young adults

Best for no-hassle cash back: Wells Fargo Active Cash® Card

Here’s why: If you’re looking for a card where you earn flat-rate cash back every time you swipe your card, the Wells Fargo Active Cash® Card is a great option. You’ll get 2% cash back on every purchase, making it easy to earn rewards. Plus, there isn’t an annual fee to eat into your rewards.

Learn more about the Wells Fargo Active Cash® Card.

Best for rotating categories: Chase Freedom Flex®

From our partner

Chase Freedom Flex®

Chase Freedom Flex®

3.3 out of 5

44 reviews

Apply Now

Here’s why: Chase Freedom Flex® offers 5% cash back on up to $1,500 in combined purchases in quarterly rotating categories. The card also offers 3% back on dining and drugstore purchases. You’ll earn 1% back on purchases outside of the bonus categories.

The high cash back rate sounds great — just make sure you’re willing to put in the effort. Categories can range from restaurants to certain online retailers. You’ll have to activate the rewards rate each quarter to earn the boosted cash back.

Learn more about Chase Freedom Flex®.

Best for travel: Chase Sapphire Preferred® Card

From our partner

Chase Sapphire Preferred® Card

Chase Sapphire Preferred® Card

4.1 out of 5

1005 reviews

Apply Now

Here’s why: If you’re looking for a good travel card without a high annual fee, the Chase Sapphire Preferred® Card is a great option. You’ll earn 75,000 bonus points after you spend $5,000 on purchases in the first 3 months from account opening. The Chase Sapphire Preferred® Card also allows you to transfer your points to Chase’s partner airline and hotel loyalty programs. Plus, you’ll get a $100 annual hotel credit for hotel stays purchased through Chase Travel. The card comes with a $95 annual fee.

Learn more about the Chase Sapphire Preferred® Card.

Best for travel with no annual fee: Bank of America® Travel Rewards credit card

From our partner

Bank of America® Travel Rewards credit card

Bank of America® Travel Rewards credit card

3.1 out of 5

133 reviews

Apply Now

Here’s why: If you want a travel card for the occasional vacation or trip abroad, the Bank of America® Travel Rewards credit card may be a good fit. It charges no annual or foreign transaction fees. You’ll earn 1.5 points per $1 spent on all purchases, and you can redeem your points for statement credits to pay for travel or dining purchases.

Learn more about the Bank of America® Travel Rewards credit card.

Best unsecured card for building credit: Capital One Platinum Credit Card

From our partner

Capital One Platinum Credit Card

Capital One Platinum Credit Card

0.0 out of 5

0 reviews

Apply Now

Here’s why: The Capital One Platinum Credit Card is available to people with limited credit history. There isn’t a security deposit required, and you’ll be automatically considered for a higher credit limit in as little as six months. It does have a high purchase APR, so be sure to pay off your credit card each month to avoid it.

Learn more about the Capital One Platinum Credit Card.

Best secured card: Capital One Platinum Secured Credit Card

From our partner

Capital One Platinum Secured Credit Card

Capital One Platinum Secured Credit Card

4.1 out of 5

675 reviews

Apply Now

Here’s why: The Capital One Platinum Secured Credit Card requires a refundable security deposit of as low as $49 (for a $200 credit limit). Many other secured credit cards require a higher minimum security deposit, so this is an especially good option if you don’t have a lot of cash on hand. If you must make a larger deposit of $99 or $200 but aren’t ready to deposit that much cash, you can pay it over time.

The card also offers the opportunity to graduate to an unsecured credit card — and get your initial deposit back — after making on-time payments.

Learn more about the Capital One Platinum Secured Credit Card.

How to make the most of credit cards for young adults

One of the most important parts of having a credit card is making your payments on time every month. If you’re trying to build your credit up, even one late payment can hurt your credit scores and stay on your credit reports for up to seven years.

While credit cards can be a great financial tool, they also typically come with high interest rates. If you carry a balance from month to month, the interest charges can add up. The best course of action is to pay your credit card in full (rather than just making the minimum payment) and on time every month. That way you won’t accrue interest or debt that may be hard to pay off.

Credit cards also come with extra features that you won’t find when you use cash or debit cards. Check if your card offers features like purchase protection or travel insurance. If you have a credit card with rewards, you should try to use it for purchases you make in that rewards category to maximize your card benefits. Keep in mind that you shouldn’t purchase more than you can afford simply because you’ll earn rewards. If you can’t make your payment, the interest rate you’ll be charged will quickly negate any rewards you may earn.

How we picked these cards

As we researched the best credit cards for young adults, we looked at features like fees, rewards and incentives that would be most beneficial to young adults. Since young adults can be at such different stages in their financial journey, we made sure to select cards that would be well suited for various credit situations. We also focused on cards that offered rewards and benefits without especially high annual fees.

We also focused more on unsecured credit cards, which don’t require you to put down a security deposit in order to qualify. We still listed a secured card for people who are having a hard time getting an unsecured card, and we chose that one in particular because of its ability to graduate into an unsecured card. 

*Approval Odds are not a guarantee of approval. Credit Karma determines Approval Odds by comparing your credit profile to other Credit Karma members who were approved for the card shown, or whether you meet certain criteria determined by the lender. Of course, there’s no such thing as a sure thing, but knowing your Approval Odds may help you narrow down your choices. For example, you may not be approved because you don’t meet the lender’s “ability to pay standard” after they verify your income and employment; or, you already have the maximum number of accounts with that specific lender.

There are many reasons for considering refinancing. Maybe you’re working with a tighter budget than you did when you first got your auto loan, and you’d like to reduce your monthly payment. Or maybe you got your current car loan when your credit was less favorable than it is today, and you’d like to refinance at a lower rate.

Refinancing isn’t free, and it isn’t always the right move. Weigh the pros and cons below before you apply.

• Pros and cons of refinancing a car
• When should you refinance your car?
• When shouldn’t you refinance your car? 
• Does refinancing your car hurt your credit?
• FAQs about auto refinancing

Pros and cons of refinancing a car

Refinancing can save you money on interest and give you more flexibility with your monthly budget — but it can also cost you in fees, added interest and a temporary credit score dip.

Pros of refinancing your car loan

• You could get a lower interest rate, which may save you money.
• You could decrease your monthly payment.
• You could shorten or lengthen your loan term.
• You can remove a cosigner if there was one on your original loan.

Cons of refinancing your car loan

• You may pay more in interest over the life of the loan, especially if you lengthen your loan term.
• You could end up owing more than your car is worth.
• You may have to pay additional fees, such as prepayment fees.
• You may experience a small dip in your credit scores.
• There may be limited options for older cars.

When should you refinance your car?

Refinancing may be a good idea when your credit scores have improved meaningfully or when auto loan rates have dropped since you first got your loan. It can also make sense when you want to shorten your loan term, reduce your payment or remove a cosigner.

• When refinancing your car loan, keep your eye on the bottom line. Refinancing makes the most sense when a rate or term change saves you more than the fees cost.
• Many lenders want to see at least six months of on-time payments before considering a borrower for refinancing. Waiting at least six months after purchasing your car can give you access to a wider pool of lenders. For a step-by-step walkthrough, see how to refinance a car loan.

How does refinancing a car work?

Refinancing involves replacing your current auto loan with a new one, ideally with better terms. Your new lender pays off the old loan, and you begin making payments on the new loan instead. Refinancing can lower your interest rate, reduce your monthly payment or change your repayment term. Keep in mind, though, that it may temporarily lower your credit scores, since lenders will likely do a hard pull on your credit when you apply.

When shouldn’t you refinance your car?

 Refinancing isn’t advisable near the end of your auto loan or when you owe more than your car is worth. It also may not be the best choice if rates have risen since you got your loan, if fees outweigh the savings, or if your car doesn’t meet the age and mileage limits set by many lenders — for example, some banks won’t refinance cars that are older than 10 years or have more than 125,000 miles on them.

• It doesn’t make sense to refinance if it ends up costing you more money. If refinancing results in a higher interest rate and steeper interest costs over the life of the loan, it’s probably not the right move.
• It’s typically easier to find a lender when your car is worth more than your loan balance — and depreciation erodes your car’s value fast. A new car can lose 20% or more of its original value within the first year.
• It may be possible to refinance your car loan if you have bad credit. But going this route isn’t advisable unless your credit has improved since you got your original auto loan.

Does refinancing your car hurt your credit?

Yes — refinancing can cause your credit scores to dip, since lenders usually run a hard inquiry when you apply for a loan. The impact is typically minor — usually fewer than five points — and your scores will likely recover within a few months if you make on-time payments. Rate-shopping inquiries made within a short window generally count as just one inquiry.

If you’re approved for the new loan, your average account age will also decrease, which can cause another temporary dip in your credit scores.

Calculate your auto loan refinance

Use the auto refinance calculator to estimate your monthly payments and how much you may be able to save by refinancing your current auto loan.

Next steps

Refinancing can help you lower your monthly payment or reduce your overall interest expense, and you can also use it to shorten or extend your loan term. However, it can temporarily lower your credit scores, so be judicious — it might not be the best move right before applying for new credit, such as a mortgage. Read about how to refinance a car loan to learn more about the process, or see how to apply for an auto loan when you’re ready.