What credit rating do you need for a credit card?

Your credit score is how you present yourself to lenders. It’s what determines the types of credit cards you qualify for and the types of terms you get with your card.

But that doesn’t mean there’s only credit cards for people with good credit. There are credit cards available for all credit levels, including No credit Where bad credit. But the better your credit, the more benefits the credit card you can qualify for.

What is a credit score?

Lenders use your credit score to assess the level of risk you pose as a borrower. The higher your credit score, the better you seem to manage your debts and, therefore, the better terms you will get on your credit card.

How is your credit rating calculated?

Your credit score is calculated by the three major credit bureaus – Experian, Equifax and TransUnion – based on your credit reports. Your credit report is basically a summary of your accounts, payment history, and credit limits.

Factors that contribute to your credit score are your payment history, credit usage, the age of your accounts, and the number of open accounts you have.

There are two popular scoring models, FICO and VantageScore, and each weighs factors a little differently. Payment history contributes the most to both, followed closely by the amount of debt you have.

FICO and VantageScore divide your score into different credit tiers. This is how they fall:

Credit score brackets

FICO VantageScore

Poor (300 to 579)

Very bad (300 to 499)

Fair (580 to 669)

Poor (500 to 600)

Good (670 to 739)

Fair (601 to 660)

Very good (740 to 799)

Good (661 to 780)

Exceptional (800 to 850)

Excellent (781 to 850)

These scoring systems help lenders determine which credit cards you qualify for.

Credit cards for good to excellent credit

If you have good or excellent credit, you may be eligible for best credit cards. That means they have the most valuable benefits and you’re likely to get the best terms, including nice interest rates.

Credit cards designed for higher credit scores include sought-after perks like introductory APR periods aimed at helping you avoid interest charges or better reward rates. Advanced travel credit cards may include benefits such as main rental car insurance, airport lounge access, and ways to get through airport security faster.

Credit cards for low or fair credit

While credit cards designed for great credit are the best, that doesn’t mean credit cards designed for poor or fair credit aren’t worth it. You can find great benefits in any line of credit if you know what to look for in a credit card.

For people with poor to fair credit, there are still a number of good cards to choose from. There are student credit cardssecured credit cards and credit cards designed for people with limited credit history.

Student cards are generally easier to obtain because they are designed for students who generally do not have an extensive credit history. They help students build responsible card habits and build credit. Some of them even offer rewards.

Secured credit cards helping people build or rebuild their credit. Contrary to unsecured credit cards – or traditional credit cards – secured cards require a one-time security deposit upon approval that establishes your starting credit limit. More often than not, the security deposit is refundable after responsible card use, which essentially translates to always paying on time with regular card use.

Then there are credit cards designed for limited credit history, which are unsecured credit cards that have lower credit requirements. They don’t always have the best features, but some offer perks and rewards while you build your credit score.

How to build your credit score

The easiest way to build your credit score is to pay your credit card bill — and other loans — on time. A positive payment history contributes the most to your credit scores. Another way to improve your credit is to limit your credit card debt.

How much of your total available credit you use at any given time will affect your credit score. The credit bureaus like to see less than 30% credit utilization, which means you’ll only want to use 30% of your total credit limit.

By paying off credit card debt and therefore reducing your credit usage, your credit score will become healthier.

Aging credit accounts will also improve your credit scores. If you have lower credit scores and there is a trusted family member with a more established credit history, you can request to be added as a Authorized user on their account to help you avoid bad credit.

The bottom line

There are credit cards available for all levels of credit, from no credit to excellent credit. But the better your credit score, the better credit card you can qualify for. If you need to establish your credit score, you can use secured credit cards Or other bad credit cards do this.

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