Do you have the question, “Credit Score Needed For Credit Card?” Well have you been thinking about getting your first credit card but don’t exactly know where to start? If you’re new to the world of credit cards, you might be wondering how your credit score affects your eligibility. That’s where we come in!
This guide will break down what score you need to get a typical credit card and what factors influence your score. We’ll also provide some tips for improving your credit rating. So whether you’re just starting out or want to improve your current standing, keep reading!
What is a credit score, exactly?
A credit score is a numerical representation of your creditworthiness. Lenders use credit scores to determine whether you’re a good candidate for a loan, and if so, what interest rate they should offer you. Credit scores are also used by landlords, utility companies, and insurers to decide whether to extend credit or services to you.
In general, the higher your score, the better. A score of 700 or above is considered excellent, while a score below 600 is considered poor. A good credit score can save you thousands of dollars in interest over the lifetime of a loan, so it’s important to understand what goes into your score and how you can improve it.
You can get your free annual credit report from each of the three major credit reporting agencies to see where you stand.
Improving your credit score takes time and effort, but it’s well worth it in the long run.
What impacts your credit score?
There are a few key factors that influence your credit score. Perhaps the most important is your payment history. This includes whether you’ve made all of your payments on time, as well as any delinquent payments or bankruptcies in your past.
Other important factors include the length of your credit history, the types of credit you have (e.g. credit cards, mortgages, etc.), the amount of debt you’re carrying, and the number of new credit applications you’ve made in the recent past.
Here are the two main types of credit scores:
FICO’s scoring method
The most common type of credit score is the FICO score, which ranges from 300 to 850. Your FICO score is calculated based on five key factors:
- payment history (35%)
- credit utilization (30%)
- length of credit history (15%)
- new credit accounts (10%)
- credit mix (10%)
VantageScore scoring method
While the FICO score is the most widely used, it’s not the only scoring method out there. Another popular option is the VantageScore, which was developed jointly by the three major credit reporting agencies (Equifax, Experian, and TransUnion).
The VantageScore ranges from 300 to 850, like the FICO score, but the scoring method is slightly different. The five key factors are:
- payment history (40%)
- age and type of credit (21%)
- utilization (20%)
- total balances (11%)
- recent activity (8%)
Credit score needed for a credit card
Now that we’ve covered the basics of credit scores, let’s talk about what score you need to get a credit card. Securing a credit card usually requires a credit score of at least 640, although some issuers may grant approval to applicants with lower scores.
Essentially, the higher your score, the more favorable terms you will qualify for. Most credit cards require a good or excellent credit score, which generally means a score of 700 or higher.
While these numbers aren’t necessarily set in stone, they give you a general idea of the credit score needed for credit card approval from major issuers.
Let’s take a closer look at what your credit score can get you in terms of plastic:
Do you have poor, or even no, credit history? Don’t worry, there are still options for you. A poor credit score would fall under the realm of around 630 or below. While you may not be able to get a “regular” credit card with terms like no annual fee and a 0% APR introductory period, you can still find a number of subprime options.
There are two types of subprime credit cards: secured and unsecured. A secured credit card requires a deposit, which acts as your line of credit. Unsecured cards don’t require a deposit, but they usually come with higher fees and interest rates.
If you have poor credit, your best bet is to start with a secured card and then move on to an unsecured card once you’ve built up your credit history and improved your score.
If you have a fair credit score, typically around 630 to 689, you’re on your way to good credit territory. You may not qualify for the best terms and rates out there, but you should still be able to find a number of decent options.
One thing to keep in mind is that even if you have fair credit, you may still be denied a credit card if you have a history of missed payments or other negative marks on your credit report.
With a fair credit score, you’ll likely qualify for a traditional unsecured credit card. These cards don’t require a deposit, but they typically come with higher interest rates and smaller credit limits than cards for people with good or excellent credit.
With a good credit score, you’ll have your pick of the litter when it comes to credit cards. You’ll likely qualify for cards with low-interest rates, generous rewards programs, and other perks. Just be sure to read the fine print before you sign up for any card, as some come with annual fees that can offset the value of the rewards you earn.
A very good score would be a number between 780 to 850. This puts you in excellent credit territory. If you have a very good or excellent credit score, you’ll likely qualify for the best of the best when it comes to credit cards. These are the cards with the lowest interest rates, richest rewards programs, and most valuable perks. They also tend to have high credit limits, which can give you some flexibility in how you use your credit.
While “very good” will get you the best of the best, “exceptional” will get you the cream of the crop! If you have an exceptional credit score, you’ll likely qualify for cards with exclusive benefits and perks, like concierge services and invitation-only events.
Of course, these are just general guidelines. The credit score you need to get a particular credit card will also depend on the issuer’s approval criteria. So, even if you don’t have the “ideal” credit score for a card, it’s still worth applying. You never know unless you try!
Cards for fair or average credit
If you have a fair or average credit score, you might not qualify for the very best offers out there. But don’t worry, you’ll still have a great selection of fair credit cards featuring low-interest rates, valuable rewards programs, and other perks to choose from.
Here are a few of our favorite cards for people with fair or average credit:
The Capital One Platinum Credit Card is a great option for people with fair credit. It has no annual fee, and you can get a credit limit of up to $1,000.
The Discover it Secured Credit Card is another great choice for people with fair credit. It requires a security deposit of $200, but you can get a credit limit of up to $2,500. And, after seven months, Discover will automatically review your account and may transition you to an unsecured card.
The Citi Secured Mastercard is a great option for people who want to build or rebuild their credit. It requires a security deposit of $200, but you can get a credit limit of up to $2,500.
Cards for good to excellent credit
If you have good or excellent credit, you’ll qualify for the best offers out there. Here are a few of our favorite cards for people with good or excellent credit:
The Chase Freedom Unlimited Card is a great option for people with good credit. It has no annual fee and offers unlimited 1.5% cash back on all purchases.
The Citi Double Cash Card is another great choice for people with good credit. It has no annual fee and offers 2% cash back on all purchases (1% when you buy, and 1% when you pay your bill).
The Capital One Venture Rewards Credit Card is a great option for people who want to earn rewards on their purchases. It has an annual fee of $95 and offers 2x miles on all purchases.
Can you get a credit card with little or no credit history?
Many people believe that you need to have a long credit history in order to qualify for a credit card. However, this is not always the case. There are a number of credit cards designed for people with little or no credit history.
These cards often come with lower credit limits and higher interest rates than traditional cards. However, they can still be useful tools for building credit. By making regular payments and keeping your balance low, you can slowly build up your credit score and eventually qualify for a better card.
So if you’re looking to get your first credit card, don’t be discouraged if you don’t have a long history of borrowing. There are still options available to you.
How to estimate your credit score
Estimating your credit score can be a helpful way to gauge your financial health. There are a few different methods you can use to estimate your score.
One option is to check your credit report for free through AnnualCreditReport.com. Your credit report will list your credit history, including any late payments or other red flags that could lower your score.
Another option is to use a credit score calculator. These calculators use information from your credit report to give you an estimate of your score. However, keep in mind that these estimates may not be 100% accurate.
The best way to get an accurate picture of your credit score is to order a copy of your report from the major credit bureaus. This will give you a detailed look at your credit history and help you identify any areas that need improvement.
By taking the time to understand your credit score, you can make informed decisions about how to improve your financial health.
How to improve your credit score
A good credit score is important for many reasons. It can determine whether you’re able to get a loan, and it can also affect the interest rate you’ll pay on that loan. If you’re looking to improve your credit score, there are a few things you can do.
One is to make sure you’re paying your bills on time. This includes both credit card bills and other bills such as utilities and rent. You should also try to keep your balances low, especially on credit cards.
Another way to improve your credit score is to keep old accounts open, even if you’re not using them. This shows lenders that you have a long history of responsible borrowing.
Finally, if you have any errors on your credit report, dispute them as soon as possible. By taking these steps, you can start to see an improvement in your credit score.
To Sum Up
So, there you have it! Building credit can be easy if you follow these simple steps. Just remember to always pay your bills on time and in full, do your research before applying for a card, and don’t take on more than you can handle.
If you’re still looking for some extra help, we’ve got you covered. Check out our free web class that can teach you everything from how to get started with credit to mastering your budgeting skills. We hope this information was helpful and wish you the best of luck as you work towards building healthy credit habits!