Credit inquiries can damage your credit score, so it’s important to understand your score and your options before you ever submit an application.
Credit cards are one of the best ways to help establish your credit, build your credit, and, in some cases, rebuild your credit. However, if you are someone who has a limited credit history or has some problems on your report that drag down your score, you may have trouble getting a credit card.
That’s not to say that it’s impossible. There are credit card options for all types of credit scores. There is no clear answer to whether there’s a minimum score or not across the board. Sometimes, there are minimums for particular cards that come with high limits, low interest rates, or lots of benefits. Sometimes, having a lower score could leave your options much more limited and may mean you’re only eligible to get a secured credit card.
Credit scores can be confusing and you don’t want to apply for too many new lines of credit all at once, just to face a bunch of denials and a huge hit to your score. In this article, we’re going to explain the different credit options for you based on your score range and explain how you can avoid hard inquiries when you’re shopping around for the best credit card option for you.
How Low Can My Score Be To Get A Credit Card?
he lowest score that you can have and still be eligible for some credit cards is actually zero. The more complex answer is that it all depends on your credit history and the credit card issuer. If you are just getting started on your credit journey, you’re not going to have a score just yet. Even if that’s the case, there are still options for you. If you’re enrolled at least part time in a college degree program, you will very likely be able to get a student credit card. Student credit cards tend to have lower limits but may also have features like cash back for good academic performance, low interest rates, and reduced fees.
If you have no credit score or a very poor credit score, it’s going to be harder for you to find a credit card that works for you. Where your score truly comes into play is with the terms and conditions of the cards you’re eligible for. Scores in the 300–580 range are considered to be pretty bad credit.
Your score may be that low because of debt, accounts in collections, a foreclosure or repossession, or a series of missed or late payments. These things can happen to anyone and you shouldn’t let them discourage you from looking for a credit card. These unfortunate past events can be the catalyst to help you make better decisions with credit moving forward.
If you’re someone with a score in this low range, though, you’re only going to be able to get certain kinds of cards. One of the most common situations is that you will only be eligible for a secured credit card. A secured credit card requires you to make a deposit that is (usually) equal to your credit limit. These are different from prepaid cards, though, because they report to all the major credit bureaus and will help improve your score—as long as you’re smart with them.
You’ll also probably have to settle for a card with a lower credit limit. Credit cards designed for those with bad credit also come with higher interest rates and will not come with any rewards or benefits that you may see in a more premium card. Even though that’s not ideal, it’s still a great way to get started. Most credit cards designed for people with bad credit report monthly to all three major credit bureaus.
This is intended to help you get your score up faster by giving you a positive payment history, as long as you don’t miss payments or make them late. Also, settling for a card like this is only temporary. Eventually, your score will improve or the creditor will see that you’re able to make your payments, and you can either qualify for or upgrade to an unsecured card with better terms.
One thing to keep in mind is that your credit score plays a role, but creditors will also look at other things before issuing you a card of your own. They’re also interested in your monthly or annual income, as well as your history of on-time payments. In order to qualify for a credit card with good terms, you need to be able to demonstrate to banks that you’re not a risk. The best way to do this is by working on your credit score, but having a steady income and good payment history can help boost your odds.
What If My Credit Is Just Fair?
Fair credit is the term used to describe your financial health if your score falls in the range of 580–670. If you fall into this range, you are very likely to be able to get a credit card without much hassle. Even though that’s the case, creditors still consider people who fall in this score range as “subprime borrowers.” This means that you may not be eligible for very competitive rates such as low interest rates, rewards, perks, or other benefits that come with more premium cards.
If your score is in this range, you will most likely be able to get an unsecured credit card without much issue. Some of the most popular cards right now for people who fall into this category include the Capital One® Platinum Credit Card, the Capital One® QuicksilverOne® Cash Rewards Credit Card, and the Indigo® Platinum Mastercard®, but there are hundreds of options.
The caveat with any of these credit cards that are suited for your category is that you could end up having to face high annual fees. Many of the most popular credit cards targeted to fair credit customers can have annual fees as high as $99. This is usually based on your perceived creditworthiness from the creditor.
What Is The Ideal Credit Score For Getting A Credit Card?
In America, the majority of people have credit scores that fall into the categories of poor or fair. The benchmark for what counts as “good” credit varies depending on where you look for the information, but it is generally considered to be at least 670. Most scores that are considered to be good are over 700; to be considered “excellent,” your score should be over 800. Because of the huge discrepancy between what is considered to be “good credit” and the credit score of the average American, it is hard to say if there is an ideal credit score at all. As a general rule though, the higher your score, the better.
To make sure that you have the best possible approval odds for an unsecured card, your score should absolutely be above 600 and most likely closer to 650. If your score is less than that but you have a positive payment history and limited accounts in collections, you will still probably be able to get an unsecured credit card.
If your score is closer to 600 or comes in under 600, you’re probably only going to be able to get a secured credit card, even if all the other factors such as payment history, delinquencies, and inquiries look good.
Credit card companies don’t really have a preference for what score they would like you to have. The main thing that a creditor cares about is the risk. What if they give you all this money and then you are unable or unwilling to pay it back? This is the question they ask themselves when someone with a lower credit score submits an application. They mitigate that risk by requiring a deposit, having high interest rates, or charging higher fees. They also will not offer as many rewards at these lower levels.
To get the best deal from a creditor, you must have good credit. If you have good credit, you are not going to have any problem getting approved for a credit card. Banks also like to compete for these customers because they’re the least risky and the most profitable for the card issuer. Someone with good credit is smart with their money, makes their payments on time, and is going to be very attractive to a creditor. Because of that, credit cards for people with good credit have lower fees, lower interest rates, and more benefits. This could include things like cash back, airline miles, and other perks.
So, while there is no set ideal credit score or even a set minimum credit score, banks still show a clear preference. You will almost always be able to find a credit card that you’re eligible for, regardless of your score. Finding a card that is the best possible deal out there is going to be a lot harder for anyone who doesn’t have good or excellent credit, though. If you happen to have excellent credit, you should be able to get approved for almost any card on the market.
What If I Get Denied?
If you’re learning about credit cards or shopping around for one, it probably comes as no surprise that hard inquiries on your credit, denied applications, and attempting to open a lot of lines of credit at once are all things that will negatively impact your score.
The first thing you should know is that a hard inquiry on your credit takes as long as two years to drop off. Fortunately for you, though, they have a very low impact on your score and will likely only bring you down a couple of points. You can bounce back from that in just a few months. Application denials don’t show up on your credit report, which will just show a hard pull; these will bring your score down, but not by much, and you won’t have to wait very long before it evens back out.
However, it still isn’t fun to sift through cards and submit applications just to see yourself denied over and over again; it can be very discouraging. There are a few things that you can do to help keep this from happening to you.
First, you should make sure that you’re researching as much as possible about the cards that you’re considering. Be realistic about what you think you’d qualify for, and start there. Read the terms and conditions for the card. Some credit card issuers will even dictate what score range they expect applicants to fall into. MasterCard always puts the desired credit right on the bottom of every card description, and others often do the same.
Second, you can use online tools like those offered by Credit Karma and NerdWallet. Many websites have tools that allow you to fill out a little bit of information and get a list of credit cards, including your approval odds for each one. If you’re just not sure how your credit score is going to measure up, this can be a great way to get a feel for what cards would be worth your time to submit an application.
The final thing that you should take advantage of is prequalification. Many credit card applications are able to collect some basic information about you and let you know if you prequalify, which means that they see your information and decide that you are most likely qualified for a specific card. These tools can be incorrect, but that doesn’t happen very often. Prequalifying for credit cards does not immediately result in a hard inquiry on your credit and can help you make a more informed decision before deciding to apply.
Find the Right Credit Card for You
There are credit cards out there for people in all different types of financial situations and with all different credit scores. With a higher score, you’ll qualify for more and better credit cards. But you shouldn’t let a low credit score make you feel like you can’t get a credit card. Just be prepared that you may not be able to get exactly what you want just yet.
Doing some research to find the best credit card that you qualify for at your current score is going to help you push your score up to where you want to be, as long as you use it responsibly.