Have you ever been turned down for a credit card because of a low credit score? Yeah, it stinks. Here's the good news: there are credit cards out there that are actually made for people with less-than-stellar credit. Getting approved for one of these cards when you've bad credit isn't enough, but it's possible, too. In this article, we'll talk about the top 5 credit cards that you can get approved for even if your credit is rough. These are different from rewards cards, but some of them have fees and higher interest rates. But they can be an excellent way to start rebuilding your credit so you can work up to a better card down the road. We will take down the key facts like fees, credit score requirements, and benefits for each card so you can decide if one is right for you. Ready to find out your options?
What Is a Bad Credit Score?
Your credit score is a three-digit number that determines your creditworthiness. Scores below 650 are typically considered "bad" or" dit. Many things can hurt your score: missing payments, high balances on credit cards, bankruptcy, foreclosure, etc. The lower your score, the riskier you seem to lenders. Pay all your bills on time, reduce your credit card balances, limit new applications, and check your credit report regularly for errors. Improving your score may take patience, but establishing a good payment pattern and healthy credit habits will pay off.
How to Check and Improve Your Credit Score
There are a few ways to check your credit score for free. Once you know your score, you can take steps to improve it over time.
Check Your Credit Report: Visit annualcreditreport.com, the only official site authorized to provide free credit reports. You can get reports from Equifax, Experian, and TransUnion, the three major credit bureaus. Check for any errors like incorrect names, addresses, or accounts that don't belong to you. Dispute them with the credit bureau to get them corrected.
Check Your Credit Score: In addition to free credit reports, you can use sites like Credit Karma, Credit Sesame, or NerdWallet to get free estimated credit scores. They use information from your credit reports to calculate the scores. Your actual FICO scores may differ, but these free scores will give you an idea of where you stand. If your scores are below 650, you have some work to do.
Pay Down Credit Card Balances: High credit card balances negatively impact your credit utilization ratio - the percentage of your available credit you'you'reng. Keep balances low, around 30% or less of your limits. Pay more than the minimum each month to lower balances. As you pay them down, your scores should start to improve.
Limit New Applications: Applying for too many new credit cards or loans in a short period can hurt your scores. New applications can lower your average account age and result in more inquiries on your credit reports. Only apply for new credit when needed. Look for lenders that use "soft" in "the series, which doesn't affect your scores.
Ask for Credit Limit Increases :If you have a good payment history with your credit cards, call and ask for higher limits. This can improve your credit utilization ratio without you having to pay down more of your balances. Only some lenders will grant increases, but it doesn't make sense to ask if you're a responsible customer.
Top 5 Credit Cards for Bad Credit
Secured Mastercard from Capital One
With no annual fee and a low minimum security deposit of $49, $99, or $200 (depending on your credit limit), the Secured Mastercard from Capital One is an excellent option if you need better credit. You can get access to a higher credit line after making your first five monthly payments on time. This card reports to the three major credit bureaus, so responsible use can help build your credit over time.
Credit One Bank Platinum Visa for Rebuilding Credit
This unsecured card charges no annual fee and provides 1% cash back on purchases. Credit One Bank specializes in cards for people with bad credit, so approval odds are good. Make on-time payments to get periodic credit line increases over time. This card also reports to the credit bureaus, so it can help establish a good payment history.
Milestone Mastercard from Credit One Bank
With the Milestone Mastercard, you get 1% cash back on purchases and the opportunity to increase your credit line over time with responsible use. This unsecured card charges no annual fee and is tailored for people with bad credit. On-time payments are reported to the credit bureaus, so this card can help you build credit when used responsibly.
Indigo Platinum Mastercard from Celtic Bank
This unsecured card has no annual fee and provides credit limits of at least $300. Celtic Bank specializes in credit cards for bad credit, so approval is likely even with a low score. Responsible use of this card, like making on-time payments, can help build your credit since the bank reports to the three major credit bureaus.
First Access VisaCard from The Bank of Missouri
This unsecured card charges no annual fee and requires a minimum deposit of just $200. It is designed for people with bad credit, so approval is very likely. The card issuer reports on-time payments and low balances to the credit bureaus, which can help establish a good payment history over time. Keep balances low relative to your credit limit and pay on time each month to build credit.
Tips for Getting Approved for a Credit Card With Bad Credit
- Check your credit report and score
The first step is to check your credit report and score so you know where you stand. Look for any errors or signs of fraud and dispute them immediately. The higher your score, the better your chances of approval. Even a slight increase can help.
- Look for cards for bad credit.
Seek out credit cards specifically geared toward those with bad credit. These cards often have lower qualification requirements but higher APRs. Some options include secured cards (you deposit an amount that becomes your line of credit) or cards from credit unions (which may be more flexible).
- Apply for a card you have a good chance of getting.
Only apply for cards you think you have a good shot at getting approved for based on your score and reports. Applying for too many cards in a short period can ding your score further. Do some research on cards you may qualify for before applying.
- Consider a co-signer
Ask a co-signer with good credit to apply with you. They agree to take on responsibility for the debt if you default. This can help overcome a lack of or bad credit history on your part. But the co-signer must trust you to make payments on time.
- Provide proof of income.
Be prepared to provide evidence of your income when you apply, such as recent pay stubs, tax returns, or bank statements. This helps prove to the issuer that you can afford to take on and pay off debt. The more you can show, the better.
Conclusion
In conclusion, having a bad credit score may present challenges, there are still credit card options available to help you rebuild your financial standing. The top five credit cards highlighted in this guide offer various benefits, such as low fees, secured options, and opportunities for credit limit increases over time. By responsibly managing your credit card usage, making timely payments, and keeping balances low, you can gradually improve your credit score. Remember to review the terms and conditions carefully, choose a card that aligns with your needs and financial goals, and use it as a tool to pave the way toward a brighter financial future.
