A good estimated credit score to get credit cards is around 650. However, credit scores can vary greatly and there are different cards available for different credit scores. People with good to excellent credit will usually have no problems being approved for a credit card. However, people with fair to average scores will have more difficulty.
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For those with bad credit, it is a bit of a catch 22. You need decent credit for most credit cards and yet, using credit cards responsibly help to improve your credit score. The good news is that even if your credit score isn’t high enough to qualify for a regular credit card, there are other options.
The Range for Credit Scores
Another name for a credit score is a FICO score. The range for a credit score is 300 to 850. On average, most individuals in the United States have scores that land in the 600s and low 700s. Anything 700 and above is considered to be excellent, a score in the lower 600s is considered fair, and the upper 600s are usually good. Anything 600 and below is usually considered to be high risk.
What Determines Your Credit Score
There are a number of determinants in regards to your credit score. One is your payment history, which accounts for around 35% of your score. This includes late payments and if you’ve had anything sent to collections.
Another thing that determines your credit score is your ratio of debt to credit. This takes into account your credit limit and what you have borrowed against it. Some of your score is made up of how long you have had credit.
The longer your history is the better for your score.
The types of credit also affect your credit score. Ideally, you want to have a variety of credit such as auto loans, credit cards, and mortgages. This is especially beneficial if you pay these on time and have a good history with them. Your credit score is affected by how many inquiries there have been for new accounts. You want to keep these to a minimum.
For more information about what goes into a credit score, how to get your credit report, and how to improve your score, visit the My Money website.
Your Credit Score and Approval
Whether you apply for a car loan, mortgage, line of credit, or credit card, your credit history will be checked and will be a big factor in whether you are approved for the loan. This is one of the biggest reasons you want to have a good to excellent credit score.
In regards to credit cards, having a good to great credit score is essential for approval for most credit cards. This is especially true for cards with low interest rates, high credit limits, and rewards programs.
There are some cards, however, that are meant for those with no or poor credit who are trying to build up their score. These cards will usually have an annual fee, a low credit limit, and a higher interest rate.
Some Alternatives for Credit Cards
Having a credit card these days is almost essential. Unfortunately, some individuals’ credit scores are so bad no one will approve them for a credit card. In these situations, there are some other options to help you build your credit.
One of the best options is a secured credit card. With a secured card, you deposit a certain amount of cash into an account and that amount of money is the credit line of the card. This means that you can’t use the card for more than the amount you deposited and there is no danger of going over your limit. Secured credit cards work the same as regular credit cards. The major credit bureaus can’t tell the difference between the two, so using them will help to increase your credit score.
Shop around for a secured card because they vary greatly. Some require high monthly fees while others do not. If you are a member of a credit union, many of them will offer good secured cards. To find a credit union near you, visit My Credit Union’s website.
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