Your credit score is more than just a three-digit number; it’s a crucial indicator of your financial well-being. Lenders rely on your credit score, among other factors, to determine whether to approve your loan applications and at what interest rates.
While having bad credit can complicate getting a credit card, it’s not insurmountable with the right approach.
What Is Bad Credit?
Credit scores span a range, with FICO scores typically ranging from 300 to 850. An exceptional credit score falls between 800 and 850, while a poor score is typically between 300 and 579. Around 16% of individuals have poor credit scores.
Factors such as late or missed payments and significant events like bankruptcy or foreclosure can contribute to bad credit and stay on your record for years.
Additionally, bad credit can result from identity theft or credit reporting errors, impacting your creditworthiness.
How to Get a Credit Card With Bad Credit
To obtain a credit card with less-than-ideal credit, consider the type of card you need and match it with your credit profile.
Explore cards aligned with your credit range to increase approval chances and avoid unnecessary credit applications.
One option is a secured credit card, requiring a cash deposit that determines your credit limit, making it an accessible choice for those with bad credit.
Instead of a secured card, consider a retail store card, which doesn’t necessitate a cash deposit and offers specific rewards and discounts.
Alternatively, become an authorized user on someone else’s credit card to leverage their credit history positively.
Adopt Positive Habits to Build Credit
- Pay bills on time
- Keep credit utilization low
- Avoid unnecessary credit applications
- Maintain older credit accounts open
By cultivating good credit habits, you can enhance your credit score and explore additional credit options in the future.
The Bottom Line
Credit cards are valuable tools for credit-building and convenient transactions. Despite bad credit, obtaining a credit card can help improve your credit score. Be mindful of interest rates and fees associated with the card.