Bad credit

Tips for applying for a credit card with bad credit

Bad credit can make life unnecessarily complicated and expensive. Any FICO score below 580 is considered “bad credit”, so you’ll face similar consequences whether your score is 560, 515, or even below that.

Unfortunately, having bad credit also makes lenders and creditors think you’re high risk, which means a higher likelihood of denied applications. This creates a cycle that makes it difficult to build credit. Without any sort of credit to rely on to prove your creditworthiness, it’s easy to get stuck where you are.

But there are strategies you can use to get a credit card approved with a low credit score. While the tips we recommend won’t necessarily help you qualify for the best credit cards on the market right from the start, they can help you get a credit card you can use to turn things around.

Consider the tips, suggestions, and strategies outlined below.

Try Experian Boost

If your credit score is low and you want to give it the best possible boost with the least amount of effort, try Experian Boost. This app helps you get credit for payments you make for subscription services and utility bills you pay, and it can help you improve your Experian credit score quickly.

Here’s how it works: Rent payments and utility bills factor into your credit score, but due to systemic communication gaps, information about those payments rarely reaches the credit bureaus. Landlords and service providers usually don’t bother to report your bill payments. But Experian Boost can collect this alternative data and integrate it into your credit report, which can boost your credit score almost instantly.

What difference can it make? According Experian, this free app helps the average user improve their FICO® Score 8 by 13 points based on data from Experian. However, some former users claim that the app has helped them earn up to 50 points or more within a few months.

Consider a secured credit card

Whether you experience Experian Boost or not, you may have better luck getting approved for a secured credit card with a low credit score. This type of credit card requires a cash deposit as security, but your balances and payments are reported to all three credit bureaus. This means you have to secure your own line of credit with cash, but your payments can help boost your credit score over time.

One of the main advantages of secured credit cards is the fact that almost anyone can get approved, poor credit or not. Also note that your security deposit is fully refundable when you get to the point where you can upgrade or close your account in good standing.

Finding credit cards for bad credit

There are credit cards designed for people with bad credit, including secured and unsecured options. Even the best credit cards for bad credit tend to be light on benefits and heavy on fees and interest charges, but they can give you the chance to prove your worthiness when others won’t.

We’ve already mentioned how secure credit cards are an option here, and you might be surprised to find that many secure cards offer spending rewards with no annual fee. If you want a credit card for bad credit that doesn’t require a cash deposit, on the other hand, consider options like the Mission Lane Visa® credit card, which offers people with poor credit the chance to rebuild for a fee. $0 annual. -59$.

Apply for a retail credit card

Retail credit cards may be another option to consider if you have bad credit or no credit history. Cards in this niche are relatively easy to get approved, although you usually start with a low credit limit at first.

That said, it should be noted that many store credit cards can only be used in one type of store or a specific brand of stores, which makes them different from traditional Visa credit cards or Mastercard products. If you apply for a store card at Kohl’s, for example, you can only use it for purchases at Kohl’s.

On the other hand, some store cards allow you to use them anywhere. Plus, retail cards always report your credit balances and payments to all three credit bureaus. This means they can help you build credit when you use them responsibly, and while earning special store discounts and other store card benefits.

Prequalification

If you’re worried about applying for a credit card with bad credit because you don’t know if you’ll be approved, you can also check out cards that allow you to be pre-qualified without a thorough investigation of your credit report.

For example, the Visa® Petal® 1 “No Annual Fee” credit card and the Visa® Petal® 2 “Cash Back, No Fees” credit card allow you to check your chances of approval and pre-qualify without thorough investigation of your credit report. The same goes for the Discover It® Secured Credit Card, which lets you start building credit with a security deposit as low as $200.

If you’re not sure which card you want to apply for, you can also use Bankrate’s CardMatch tool. This free tool lets you see if you’re pre-qualified for any credit card offer without first investigating your credit reports.

Become an authorized user

Finally, you can request to become an authorized user on someone else’s credit card account. This strategy doesn’t actually require an application, but you’ll still end up with a credit card that you can tap into and use to build up credit.

Becoming an authorized user is a good option if you have a trusted family member or friend who has good credit and is willing to add you to their account. Just keep in mind that the primary account holder is ultimately responsible for paying all charges and you can easily ruin a good relationship if you use your authorized user card for purchases and don’t refund them. not.

The bottom line

Your credit card options are usually limited when you have a low credit score, but that doesn’t mean they’re non-existent. There are many ways to access credit that can help boost your score, and some of your options may be more rewarding than you think.

When you get approved for a credit card, you also need to remember that the one you’re getting right now doesn’t have to be forever. With a little patience and lots of one-time payments on your current card, you can improve your credit score and upgrade to a better credit card over time.