Ready to apply for a credit card, but concerned that your three-digit credit score might be too low?
Don’t let that worry you. While it’s true that a higher credit score will open doors to cards with more generous rewards programmes and lower interest rates, you can still qualify for a credit card even if your score isn’t stellar.
Juan Carlos Cruz, founder of Britewater Financial Group, previously explained that the connection between credit cards and credit scores is quite straightforward.
“The higher your credit score, the more favourable credit cards you’ll be able to get,” said Cruz. “If you have missed payments or are already using most of the credit available to you, these are indicators that you’re not managing your credit lines responsibly. Because of this, you won’t qualify for the better cards.”
Here’s an overview of the credit scores generally needed to qualify for everything from basic, no-frills credit cards to those offering substantial sign-up bonuses and significant cash back rewards.
How Your Credit Score Influences Credit Card Approval
Your three-digit credit score serves as a numerical representation of your creditworthiness. It’s calculated based on information from your credit report, which includes details about your credit usage and payment history. Lenders rely on credit scores to determine how much credit they should offer to borrowers and to assess your level of responsibility with credit.
A high credit score signals that you pay your bills on time and use credit responsibly, making you an attractive candidate for a credit card. Conversely, if a lender sees a low credit score, they might question your eligibility for a card and the appropriate credit limit to extend.
What Credit Score Do You Need for a Credit Card?
Tom Giancola, Chief Credit Risk Officer at Mercury Financial, noted in a past interview that consumers typically require a FICO score in the low 600s to qualify for a basic, straightforward credit card. For a fundamental rewards card, a score in the mid-600s to low-700s is generally needed.
And to qualify for premium cards that boast the most valuable rewards programmes? According to Giancola, that usually demands a FICO score of 740 or higher.
“Those rewards are costly,” Giancola explained. “Banks cannot sustain high loss levels if they are paying out that much in rewards expense. Therefore, they reserve these cards for the most secure applicants.”
Understanding Credit Score Ranges
Among all the credit-scoring models, FICO and VantageScore are the most widely used, with approximately 90 percent of lenders, including credit card issuers, preferring the FICO score.
FICO scores range from 300 to 850, with scores between 800 and 850 being considered “exceptional” by lenders. The two most recent VantageScore credit scores (3.0 and 4.0) also use a 300 to 850 range, mirroring FICO. For these models, VantageScore defines 750 to 850 as its excellent range.
The breakdown of FICO score ranges is as follows:
- Poor: 300-579
- Fair: 580-669
- Good: 670-739
- Very Good: 740-799
- Exceptional: 800-850
Strategies to Improve Your Score for Better Cards
If you’re aiming to improve your credit score, focus on two primary actions. Firstly, consistently pay your credit card bills and any other loans you may have on time each month.
Secondly, if you carry credit card debt, endeavour to pay off as much as you can. Utilising less of your available credit limit will positively impact your score. However, be cautious not to close credit cards once you’ve paid them off, as this reduces your overall available credit and can harm your credit score by increasing your credit utilisation ratio.
Andrea Woroch, a consumer-savings expert, highlighted in a previous discussion that another crucial aspect of improving your credit score is to curb negative spending habits that contribute to credit card debt. “Identifying and eliminating triggers that lead to impulse buys is key to maintaining your credit in optimal condition,” Woroch advised.
Woroch suggests that individuals who struggle with impulse buying should consider deleting deal apps from their phones and unsubscribing from store newsletters to help reduce the temptation to overspend.
Credit Card Options for Lower Credit Scores
What Credit Card Can I Get With Bad Credit?
If your score falls into the “bad credit” range, you’ll most frequently qualify for secured credit cards. These function similarly to traditional credit cards, except their credit limits are directly linked to a security deposit you make when applying for the card. For instance, you might deposit £500 with the card issuer and then receive a secured credit card with a maximum credit limit of £500.
It’s generally easier to qualify for these cards because banks are protected. Should you fail to make your payments, the bank can recover the outstanding amount using your deposit.
A notable option in the UK market is typically a secured card from providers like Capital One Secured, or alternatives that don’t require an upfront security deposit but are tied to an accompanying bank account, similar to the concept of the Chime Credit Builder Visa in the US. These are designed to help build credit without the traditional deposit structure.
You can still qualify for other credit cards even with bad credit. Options often include specialist cards aimed at credit rebuilding, similar to the Capital One Platinum Secured Credit Card or other providers in the UK that cater to this segment.
Some secured credit cards also offer rewards, a feature typically seen in cards like the Discover it® Secured Credit Card in the US, which offers cash back on certain categories. In the UK, while less common for secured cards, some providers may offer minor incentives or transition to rewards-based cards once your credit improves.
What Credit Card Can I Get With Fair Credit?
If your credit score is in the “fair” range, you’ll have access to a broader selection of credit cards, including those that do not charge annual fees or demand security deposits.
A good option if your credit score is on the lower end of the fair range might be a basic card from a mainstream provider, similar to the Capital One Platinum Credit Card in the US. These cards typically don’t offer rewards but are designed to help you build credit through consistent, on-time payments. They often come with no annual fee, making them a cost-effective tool for credit improvement. Many such cards in the UK also offer periodic reviews for potential credit limit increases based on good account behaviour.
If your score is at the higher end of the fair range, a card that offers a modest rewards programme while still being accessible could be suitable. While the Credit One Bank® Platinum Visa® for Rebuilding Credit* is a US example, similar cards exist in the UK from various providers that offer small cash back percentages on specific categories. However, be mindful of any annual fees, which can sometimes offset the rewards earned.
What Credit Card Can I Get With Good or Excellent Credit?
If your FICO score (or equivalent UK credit score) is above 670, you fall into the “good” credit category, and with scores like these, you can qualify for almost any credit card available.
Cards similar to the Blue Cash Preferred® Card from American Express in the US exist in the UK (e.g., the Platinum Cashback Everyday Credit Card from American Express or the Platinum Cashback Credit Card from American Express), offering high cash back rates on everyday spending categories like groceries and streaming, along with other benefits and welcome bonuses.
Similarly, cards that offer rotating bonus categories, akin to the Discover it® Cash Back card in the US, provide opportunities for elevated cash back on specific types of purchases each quarter. In the UK, while not identical, some providers offer tiered rewards or bonus categories that change periodically.
Obtaining a Credit Card With No Credit History
Some individuals lack a “good” or “bad” credit score simply because they don’t have enough credit history to generate one at all. It can be challenging for those without loans or credit cards to establish a credit history, and a lack of a credit score can make it difficult to qualify for most credit cards.
A strong option for those with no credit history is a secured credit card. As with individuals with poor credit scores, banks are more inclined to approve secured cards because the security deposit significantly reduces their risk.
“The bank already has your money,” Cruz noted. “There’s no reason, then, for them to feel at risk. They will not be financially impacted if you don’t pay.”
Once you obtain a secured card, use it regularly each month. By paying your bill in full and on time every month, you will gradually build a solid credit score.
Giancola also advises consumers needing to build a credit history to consider private-label cards. These are issued by department stores, wholesale clubs, and other retailers and can only be used at that specific store. It’s worth noting that they rarely offer generous perks, and their APRs tend to be higher than those of general-purpose cards.
However, Giancola explained that these cards are often easier to qualify for because they pose less risk than traditional credit cards. If consumers use them correctly—charging only what they can afford to pay off in full each month and paying their bills on time—they can establish a strong credit history that will enable them to qualify for more conventional credit cards in the future.
For those with no credit score, Giancola also suggests becoming an authorized user on someone else’s credit card account to help build a credit history. The primary cardholder of the account is responsible for making the monthly payments, but the payment activity is reported to the credit bureaus under both their name and yours, helping you build a positive credit history. Just be sure to use the card only as agreed upon with the primary cardholder to maintain your relationship.
The Ultimate Conclusion
Whether you’re looking for a secured card or a top-tier rewards or travel card, you can find the right card for your credit score. If you’re starting with a low (or no) credit score, responsible use of credit over time will enable you to build your credit history and eventually qualify for the credit cards you desire.