With no annual fee and the opportunity to earn cash back rewards, this card is also a great option for those looking to build their credit history. As mentioned above, FICO credit scores range between and The full distribution of how Americans fall into the score ranges is below:. There are several ways you can use a credit card to improve your credit score, including:.
The most widely used credit score is the FICO score. FICO scores range between and Bad credit is generally considered anything at or lower. Fair credit is to Bad credit is often caused by things like failing to pay your bills on time or defaulting on a loan.
Having bad credit can make it more difficult to get a credit card or obtain a loan. The only way to know for sure whether you have bad credit is to check your credit score. There are free sources for checking your score online that only require the last four digits of your Social Security number. One indicator of bad credit is a FICO score between to This score is considered by FICO to be very poor. A score between to is considered to be fair.
Having bad credit means that you will have significantly less access to any type of credit, and any loans or credit cards you do qualify for will be much more expensive in terms of interest rates and fees. Other credit card features that are commonly offered to people with better credit, such as rewards and promotional APR offers, will likely not be available. Credit scores also serve as a proxy for trustworthiness in our society and are sometimes used by employers, landlords, cell phone providers, and insurance companies to determine how much of a risk you represent.
They may set their prices accordingly or decline to do business with you altogether. Regardless of how bad your credit is, there is almost always a path to move things in a better direction.
Building a positive credit history can take time, but it is certainly possible with responsible credit behavior and some patience. Simply avoiding the behaviors that cause bad credit can go a long way. Other things you can do to recover from bad credit include:. That said, issuers have designed card products for different segments of the market, and that includes the subprime market for people with bad or no credit. As mentioned above, secured cards can be a good place to start if you have some cash to deposit with the card issuer.
These cards typically report to all three major credit bureaus, which can help you build a solid credit history. These types of cards can only be used with those respective retailers, unlike cards issued by banks that carry the Visa or Mastercard logo or that are issued directly through Discover or American Express, which can be used anywhere that accepts those credit cards.
Store credit cards should only be considered a stepping stone to build credit, however, as they tend to have very small credit lines and charge high interest rates. While there are numerous unsecured Visa and Mastercard options targeting people with bad credit, they can be a needlessly expensive option. These types of cards tend to have limited credit lines, very high interest rates, and numerous fees.
So, buyer beware with these types of subprime cards. As mentioned, secured cards from major issuers like Discover or Citi can be a much less expensive option until your credit score rises above the mark and better, unsecured options become available to you. Yes, you can still get a credit card if you have bad credit. Credit cards for bad credit are cards that are typically easy to qualify for and can be used to help you rebuild your credit. Some of the credit cards you can apply for if you have bad credit include:.
Your credit card application can be denied for a number of reasons. For instance, if you have too much debt, if you have no or limited credit history , or if your credit score is too low to qualify you for that particular card. If you apply for a credit card and your application is denied, there are a few things you can do:.
Unfortunately, few, if any, credit cards designed for people with bad credit allow balance transfers , especially at interest rates that would prove advantageous. Before you consider a balance transfer, however, it would be worth contacting your current card issuer to see if you can simply negotiate a lower rate.
Correcting errors on your credit report can pay off within a matter of months. Other credit behaviors, like paying your bills on time, can take longer to improve your score. According to Experian, the following actions can have an impact on credit scores in these general time frames. Source: Experian Information Solutions. To arrive at our list of best credit cards for bad credit, we filtered our list of nearly credit cards for cards that consider applications from people with credit scores below From this list, we then objectively chose the best cards in each subcategory based on their star ratings and feature quality.
A weighted algorithm was used to determine which cards would be included in our final list. When choosing the best credit cards for bad credit we considered variables including the card fees, if it charged a reasonable interest rate, and if the card offered any rewards. We also looked into the card security and whether or not the card issuer provided solid customer service. Part of our methodology also included continuous monitoring of data for credit card issuers to ensure we provide the most up-to-date rankings.
Ben Woolsey is Investopedia's Associate Editorial Director of financial products and services, including credit cards. He has more than 30 years of experience in the financial services industry, including marketing for banking and financial institutions such as Associates First Capital and Bank One.
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I Accept Show Purposes. Your Money. Personal Finance. Your Practice. Popular Courses. Best Credit Cards for Bad Credit. OpenSky believes in giving an opportunity to everyone. Fingerhut Credit Account issued by WebBank.
Easy application! Get a credit decision in seconds. Build your credit history - Fingerhut reports to all 3 major credit bureaus.
Bad credit history? Milestone Mastercard could be for you. With reporting to all three credit bureaus, you can get credit for all of your hard work. No upfront security deposit required so you can keep more money in your pocket. Plus, gain access to a manageable credit limit with every card.
No annual or hidden fees. See if you're approved in seconds. Building your credit? Using the Capital One Platinum Secured card responsibly could help. Less than perfect credit? Indigo Mastercard is a great choice! Indigo Card reports to all three major credit bureaus and gives you the chance to establish a consistent payment record! Unsecured credit card with no security deposit - keep your cash in your wallet!
Plus, affordable monthly payments comes standard on every card. What is bad credit? A bad or poor credit score Your credit rating is based on several factors. Reasons you could have bad credit There are a number of reasons why you could have bad credit, for example: Breaking your credit agreement — If you missed any payments or went over your credit limit, this will break the terms of your credit agreement and be noted on your credit file.
Getting into financial difficulty — Each repayment you miss is noted on your credit file. Missing multiple repayments can cause your score to quickly drop, particularly if you miss a number of consecutive repayments. Being close to your credit limit — The amount of credit you use also impacts your score.
Always use your card sensibly and make your payments on time. Having too many credit searches — if you apply for credit many times this leaves a lot of hard searches on your credit file. Too many of these searches in a short space of time can lower your credit score. Public Information — if you have recently had any County Court Judgements CCJs or have filed for Bankruptcy in the last 6 years this will adversely impact your ability to get credit.
Eligibility checking for a credit card Guaranteed acceptance credit cards are sometimes offered to borrowers with an excellent credit score. Many lenders give you the option of an initial eligibility check. This helps you work out if you will be accepted without a credit search being left on your credit file.
Additional fraud, identity and affordability checks need to be carried out. This means the information you provide in your application needs to be cross-checked with that held on your credit report.
Build or rebuild your credit with a Vanquis Credit Card. Vanquis Chrome Card -
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