What Credit Score Is Needed For Most Credit Cards
Its important to remember that your credit score is just one of the criteria banks use when evaluating credit card applications. Other key factors include your credit history, your income, and your monthly housing costs.
Its generally harder to get a credit card if your FICO score is below 580. Scores in the 600-850 range are most likely to be approved. Bear in mind that you have three credit scores one from each credit bureau TransUnion, Experian, and Equifax. Some credit card companies restrict their inquiries to just one credit bureau, while others use information from multiple sources.
Consumers with credit scores below 580 still have a few options:
- Almost everyone can be approved for a secured credit card because these cards are backed by collateral your cash, deposited into a special account.
- You can become an authorized user of someone elses credit card, with the cardholders permission, of course. This will help you create a credit history if you have none and should help you rebuild your credit score if the card is used responsibly.
- You can establish a credit history through a , in which you deposit the loan proceeds into a special account and then repay the loan in monthly installments. When youve repaid the loan, the special account refunds your money. By paying your loan on time, you should establish a solid credit history and earn an average or better credit score.
In The News: Experian Launches Go A Tool To Build Your Own Credit Report
If youve boosted your credit score to the fair-credit range, youve come a long way. Your efforts have opened the door to more opportunities, making it easier for you to borrow money if you ever need to. Not everyone is as fortunate.
A lot of people still struggle to get their credit score as far as you have. In fact, 28 million have no credit score or credit report and are credit invisible. And because of this, they struggle to gain access to valuable financial resources. This makes it easier for them to fall prey to predatory lending options like payday loans.
If you know anyone who is credit invisible, let them know they have resources available to them. This includes a new tool by Experian that helps people who are credit invisible establish credit records. Instead of relying on lenders to provide the data that determines a credit score, Experians Go program lets users create an Experian credit report using recurring bills that are not usually reported to credit bureaus. John Egan has the details on Experians new DIY credit report tool.
Next Steps: Consider Secured Credit Card Options
If youre unable to be approved for an unsecured card with your current credit history, dont worry. You may be able to qualify for a secured credit card to help build your credit.
By their very nature, secured credit cards require a deposit of around $200 or more as collateral to secure the card in case you dont make your payments. It makes sense, then, that theres no such thing as a secured credit card with no deposit so keep that in mind when looking into secured credit cards.
If youre interested in trying out a secured credit card while you work on your credit, here are some that might work for you.
- Discover it® Secured Credit Card: This card is good for somebody looking for a secured card that offers rewards.
- Capital One Platinum Secured Credit Card: Consider this card if you dont have a lot of cash to put down for a security deposit.
- OpenSky® Secured Credit Visa® Card: This card doesnt require a credit check, so consider applying for it if youre worried about something like a previous bankruptcy or foreclosure preventing you from getting a card.
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Sign-up bonus: Unlimited Cashback Match only from Discover. Discover will automatically match all the cash back youve earned at the end of your first year! So you could turn $50 cash back into $100. Or turn $100 into $200. Theres no minimum spending or maximum rewards. Just a dollar-for-dollar match.
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If youre a student with fair/limited credit who spends a significant amount on gas and dining, the Discover it® Student chrome could be a good fit.
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The Discover it® Student chrome charges a 3% intro balance transfer fee, up to 5% fee on future balance transfers *.
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What Is Considered Fair Or Average Credit
Fair credit, also referred to as “average” credit, is a step up from bad credit but a notch below good credit. It typically means your credit scores fall in the range of 630-689 on a scale that runs from 300 to 850.
Credit scores indicate your level of risk to potential lenders and are based on several factors, including your payment history, the amount of available credit that youre using, how long youve had credit, and more.
There are good credit cards designed for people with fair credit, but you’re unlikely to get approved for the best credit cards until you can improve your credit.
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Recommended Reading: Credit Score Needed For Student Loan
Which Credit Cards Can You Get With A 580 Credit Score
There are various credit cards you can get today in various banks. With a good credit score, you can even get free virtual credit cards with no deposit such as the Capital One Credit Card. Virtual cards are more secure since they are not visible and so you only need to remember the card details such as PIN, card number and the security code. Some of the common credit cards for a credit score of 580 include the following.
How Can You Get A Credit Card For A 580 Credit Score
For you to get a credit card, you need to be eighteen months old. It means that you must have an identity card and a Social Security Number. You should have some credit history as well. Numerous credit card companies offer credit cards for bad credit scores such as 580. If you have a credit higher than 580, lets say 600 and above, you can quickly get and lower interest rates as compared to lower scorers.
Once you have all your documentation with you, you can visit a website of your favorite bank and see the credit cards that favor your scores. You must open a checking account with the concerned bank after pre-qualifying for a credit card. Every credit card requires a checking account. Upon acquiring your checking account, you then proceed to apply for your card. You have to provide your address where you will receive your credit card as well as an email and a mobile phone for communication.
Later on, I will take you through some credit cards for bad credits which may be secured or unsecured. You can now see that you can get an unsecured credit card for 500 credit score. Talk to your bank representative to see how you can get one.
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0% intro APR for 15 months on purchases and balance transfers
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How Fast Can Credit Improve
The length of time it takes to improve your credit depends on the details of your financial situation. Along with your credit behavior, your starting score is a major factor.
For example, if you have no credit history, it will take a minimum of 6 months to establish a credit score. Credit score formulas require an active credit account to be present for at least 6 months before a score is generated.
If you are repairing damaged credit, however, it can take much longer to up your score. A person who only qualifies for a secured card, for example, can generally improve to fair credit within 12 to 18 months with responsible card usage, of course.
While some people need to repair minor infractions, others have major issues to climb back from. Overcoming small mishaps will be a quicker journey than, say, recovering from bankruptcy. According to VantageScore, here are the approximate lengths of time it takes to repair credit based on your actions:
| Action |
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| Maximum drop over extended time period |
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How To Improve A Credit Score Of 580
Just how bad is a credit score of 580? As weve seen in the sections above, this score impacts every aspect of your financial life. Mortgages, auto loans and credit card interest rates are all dramatically higher than they would be if you had moderate credit.
If you would like to improve your credit score of 580, there are a few ways you can go about it.
1) Read this blog post on How To Improve Your Credit Score In 30 Days. We list simple tips in this blog post like paying down revolving balances to less than 30% and other tips that will improve your score quickly.
2) Read this blog post on what NOT to do when repairing credit. The last thing you want to do is move backwards in your efforts to improve your credit situation.
3) If you seriously need to improve your credit score in 30 days, you will benefit by enlisting the help of a credit repair company like Go Clean Credit. To learn more about our credit repair programs, please contact us.
No matter what your situation, Go Clean Credit has a solution. We have many that are available to help you overcome your credit situation and place you back on the path to financial success. Real credit restoration is not a once size fits all model and we tailor your needs to the right program, but most people can start for just $99 per month.
What Credit Score Is Needed For A Credit Card
Credit cards are designed for every credit score, from excellent to very bad. In this article, we introduce you to the best from each score category, including cards for consumers with no credit score at all.
Student and secured credit cards generally have no credit score requirements. Issuers like to recruit student cardmembers because they feel it will result in brand loyalty that may last a long time after graduation. Secured cards usually dont require a credit score since they are collateralized by your cash deposit.
Certain general-purpose unsecured cards are geared toward consumers with low credit scores. Some issuers may use alternative indicators, such as income, employment, and/or education, to approve your card application.
In fact, most card issuer companies allow you to prequalify before applying for their cards. Prequalification doesnt require a hard inquiry of your credit history and therefore doesnt hurt your credit score. Thus, if you cant pass the prequalification step, you wont waste your time or hurt your score by applying for the card.
Read Also: Fha Loan Minimum Credit Score
How Long Will It Take Before I Can Apply For A Better Credit Card
That depends on two things: how bad your credit situation is now and how well you manage your current credit card. If your low credit score is mainly the result of very little credit in combination with a couple of late payments, you may see your score rise considerably after just a few months. But if you have a history of late payments, or a recent bankruptcy, you may need to use one of these cards for at least a couple of years before trading up.
Continue To Use Credit
A bad credit score may force you to believe that you should cancel all your credit cards and avoid new loans. While you dont want to bite off more than you can chew, its a mistake to run the other direction. Using a credit card is a great way to improve your score, as long as you make minimum payments as required. Just the same, you can improve your credit score by securing and paying on installment loans, such as an auto loan.
Read Also: What Credit Score Does Carmax Use
Use Your Understanding Of Credit To Build Your Credit Score
The first step in your credit journey is understanding what a credit score is and how it is calculated. Once you know the basics about credit score, you can begin to improve your credit score. Doing so doesn’t simply improve your standing in the eyes of lenders, but it can also save you thousands of dollars in interest payments over the course of your lifetime.
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Capital One Spark Classic For Business
Our pick for: Small business
The rewards rate on the Capital One® Spark® Classic for Business isn’t going to wow anyone there’s no sign-up bonus and the APR is high. What makes this card valuable is that it’s available to business operators with fair credit , who don’t have a lot of options in business credit cards and it has no annual fee. Read our review.
By Kenley Young, NerdWallet
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How To Improve Your Credit Score And Approval Odds For A Rewards Credit Card
There are many benefits to having a higher credit score, including access to top-of-the-line rewards credit cards, which come with features not typically found with credit cards for fair credit. Credit card perks youre likely to come across when you have good or excellent credit include large sign-up bonuses, long intro APR offers, higher credit limits and even travel credits. If youre looking for ways to raise your credit score so you can get approved for a better credit card, here are some good credit habits to maintain.
Secured Cards Vs Unsecured Cards
The biggest difference between a secured and unsecured card is the deposit. When you open a secured credit card, youll need to secure your line of credit with an upfront security deposit. This works similarly to a secured loan, which requires some form of collateral. In most cases, the amount you deposit toward your secured credit card will equal your credit limit. For example, if you apply for the Discover it® Secured Credit Card and put down the minimum deposit requirement of $200, Discover will assign you a credit limit of $200.
Many secured cards allow you to deposit more money over time to increase your credit line. Plus, when youre ready to close your card account in good standing, or you qualify to upgrade to an unsecured card, youll receive the deposit back in full.
Unsecured cards dont require an upfront deposit as collateral. However, if youre approved for an unsecured credit card and you have less-than-great credit, you may be assigned a low credit limit. A low credit score or little credit history can be an indicator of risk to issuers the more evidence you can show of using credit and paying it back over time, the more likely an issuer is to trust you with a larger credit line.
Both secured and unsecured credit cards can be helpful tools for building credit, as long as your issuer reports your credit movements, including on-time monthly payments, to the three credit bureaus regularly.
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