A lot of people wonder if they can get a credit card if they have a bad credit score. The answer is yes! But it depends on the type of account you are applying for, and your goal in mind. There are many different types of accounts that require different levels of approval.
Some don’t require any approval at all! Read this blog post to learn more about which cards you can apply for, whether or not you need good credit, and how to improve your credit score.
Credit Card Application Help for Those with a Bad Credit Score
You can apply for a credit card even if you have a bad credit score, but it’s going to take a little more effort. When you finish applying for this card, make sure that all of your information is 100% accurate and truthful.
There are penalties for lying on an application, so don’t do it! Instead, be honest about what kind of cards you have had in the past or currently carry from other issuers.
Do Not Apply for Multiple Credit Cards at the Same Time
Do not apply for multiple credit cards at once. Each application counts as a hard inquiry on your score. The more inquires made in a short period will hurt your credit score even further. The same thing goes if you currently have other open accounts; don’t open any new ones while applying for this one!
If you do need to get a new card, either close the old ones or don’t open a new one until you have used this credit card for at least six months to a year.
How Long Could It Take for Approval?
The best thing that you can do is to be patient. If a bad credit score doesn’t allow you to get approved right away, then take some time and work on improving it before applying again later. Know that it takes time to rebuild your credit. If you are not approved for a card now, then try again later. Just stay positive and keep on trying!
Remember, these tips when applying for a new credit card with a bad credit score. They will help you have the best chance of being accepted by an issuer. After all, everyone’s score is different, so what works for one person won’t necessarily work for another. It may take as much as 90 days to get a credit card approved while you are working on raising your credit score.
Which Credit Cards Have the Higher Approval Rates?
There are, however, credit cards that have higher approval rates, even if you have a bad credit score. Remember that if you have a bad credit score, any card you get will have higher interest rates and steeper fees. Following is a list of some that may give you a greater chance of approval.
Surge Mastercard
Surge Mastercard®–The Surge Mastercard® is a great option for people who have a bad credit score or no credit. They can approve this account even if you’re new to the country and don’t have a social security number. It has an 80% approval rate, which is one of the highest in its category!
Indigo Mastercard
Indigo® Unsecured Mastercard®–This card also requires very little information from applicants – but it’s not open to everyone with a bad credit score. Its annual percentage rates are significantly higher than other cards on this list, so check out some others before choosing this one.
However, since it doesn’t require any sort of deposit (unlike most unsecured accounts), it’s an instant approval credit card with high approval odds.
Reflex Mastercard
Reflex Mastercard® has a very high approval rate – even higher than those above! Again, don’t expect to be approved if you have bad credit – but the chances are better for people who have had trouble getting an account in the past because of their financial history or lack thereof.
If your score is good enough and you meet all other requirements, The Reflex MasterCard® can help improve your credit rating so that down the road when life’s big events happen (marriage, home-buying) your credit will be strong enough to support these major decisions. Its APRs aren’t great either, but the low deposit requirement is a big plus.
Total Visa Card
Total Visa® Card—The Total Visa® card falls into the same category as the Surge Mastercard®, which means that like its fellow instant approval accounts, it can be approved even if you have no credit history at all!
Again, don’t expect to get this account unless your score is strong enough – after all, there’s nothing wrong with having bad or no credit, so long as you manage it well and take steps towards improving your situation.
Capital One
Secured Mastercard® from Capital One—You can apply for this card if you have a low or bad credit score. Once you are approved, you’ll have a credit card that can be used to build your credit score higher.
Capital One has many different credit cards for all types of people with varying degrees of creditworthiness. Check out their vast array of cards on their website. There will even be at least one for those who have a low or bad credit score.
How Can I Rebuild My Credit Score Using a Credit Card?
You can rebuild your credit score by using a credit card. The best way to build your credit score by using a credit card is to, first, never miss a payment. If you are late making one payment, it could drop your credit score by up to 100 points.
Make sure that if you do not have the money to pay for something at the time to let the company know right away. Try to work out an alternative plan with them or wait until next month when you will have the money to pay for it.
Credit Card Limits
Make sure that your credit card limit is not too low. If your credit card has a really low limit, then every time you use a large amount of money on your credit card, it can lower your score. They think you may become unable to pay back the full balance and they will need to increase your interest rate.
Credit Card Use
Finally, you should not use more than 30% of the limit on your credit card. If you use over 30%, it shows that you do not have enough money saved up or available for emergencies. They may think that you are unable to pay off the balance if something unexpected happens. Having a good amount of savings is also attractive to lenders.
You Can Repair Your Bad Credit
By doing all the above things, you can repair your bad credit score and eventually get a good interest rate on loans. Having a high credit score is beneficial to be able to have financial freedom. Remember that it may take nine months or more before you see an improvement in your credit report after making changes, so it is important to be patient.
When you are willing to wait it out and make some small changes, your credit score will eventually go up!
What if your Credit Score is Less than 600?
You can still get approved for a credit card with a score lower than 600. The interest rates will be higher, but you can still get it. You might need to put down a deposit of $300 or more depending on the card company’s requirements. If your score is between 500-599, apply for secured credit card.
What Is a Secured Card?
A secured card is an account that requires an initial security deposit (e.g., $300). If your credit score is less than 500, then you can apply for a secured credit card. If you keep the account in good standing, you can eventually raise your credit score. Remember, if you have a bad score, it is not the end of the world. Get informed and continue to work on improving your credit.
Are There Any Alternatives to Having Bad Credit?
Yes! One such alternative is peer-to-peer (P²) lending. The process works by simply applying for a loan online and once your application is approved, they will match it with one or more investors who will fund your loan. Repayments are made automatically through a designated debit from your checking account each month.
Consider All Your Options
You can also consider options such as buying on an installment plan or paying in cash, if possible. If you do not want to carry credit card debt for several years, this might be the best option for you until you improve your credit score.
The last alternative is to save up for what you need and pay cash, if possible. If not, then consider an option that allows installments or paying in full at the time of purchase. This will help decrease your credit card debt faster than just putting it on low-interest rates cards with high balances.
How to Boost Your Credit Score from 500-700+
There are several ways to boost your bad credit score. First, having one or more types of accounts (credit cards, mortgages, etc.) open and in good standing with no late payments will boost your credit score. Next, get rid of old accounts that have been closed for at least six months, because they may be negatively impacting your score.
Owe Less Than 3 Times Income
Having an amount owed on revolving accounts (credit cards) that is less than three times your monthly income will also boost your score. For example: if you make $2000/month in gross salary, then it would be wise to not owe more than $6000 on credit cards combined.
Have Different Types Of Credit
Having a mix of different types of accounts (credit cards, car loans, mortgages) can boost your overall score. This means not having too much debt on one account type. For example: if you have an up-to-date mortgage and no other open or late payments then that’s great!
You may also want to consider looking into applying for a new loan or credit card to add a different type of account payments.
