What Credit Score Do You Need For A Credit Card?

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Credit scores are an important part of your financial life that affect your ability to own or rent property, buy a car, access credit — and even the premiums set by insurers. Financial institutions use this number to decide whether to lend you money and how much interest they will charge you for it.

If you’re holding off on applying for a credit card because you fear your credit score is too low, don’t fret. It’s true that a higher credit score means you can qualify for the best credit cards, but a low score doesn’t necessarily put all credit cards out of reach.

What credit score is needed for a credit card?

It depends on the card. Some credit cards are made specifically for people with less-than-perfect credit. Before you compare specific cards, check your credit score and understand what that number means.

The two major scoring models are FICO and VantageScore.

FICO ranks scores from poor to exceptional on a scale from 300 to 850.

• Poor: 300 to 579
• Fair: 580 to 669
• Good: 670 to 739
• Very good: 740 to 799
• Exceptional: 800 to 850

VantageScores have a similar ranking system, also on a scale from 300 to 850.

• Very poor: 300 to 499
• Poor: 500 to 600
• Fair: 601 to 660
• Good: 661 to 780
• Excellent: 780 to 850

You should note, however, that when applying for credit cards, not only is the FICO Score model commonly used, but also your FICO Bankcard score.

The FICO Bankcard Score is a credit scoring model specifically designed to evaluate credit card applications, emphasizing factors relevant to credit card usage and behavior. It differs from FICO’s regular scoring model by concentrating more on credit card balances, payment history and other credit card-related behaviors.

To understand how credit card issuers assess your creditworthiness, you’ll want to know your FICO Bankcard Scores or FICO Score 8, as these are the score versions commonly used by many credit card issuers.

Cards for fair or average credit

Even with a fair FICO credit score of 580 to 669, you can find plenty of solid fair credit cards to choose from.

• The Capital One Platinum Credit Card is a no annual fee credit card that allows cardholders to be automatically considered for a higher credit limit six months after account opening with on-time monthly payments. It doesn’t offer any rewards or noteworthy cardholder perks, but it’s a highly-rated option if you have fair or average credit.
• The Capital One QuicksilverOne Cash Rewards Credit Card offers a rewards program with a $39 annual fee. Cardholders can earn unlimited 1.5 percent cash back on all purchases. This is an option for those working to build their creditworthiness while also earning cash rewards.

Cards for good to excellent credit

• The Chase Sapphire Reserve® has excellent rewards potential and comes with multiple perks. But this card’s annual fee is $550, and it’s generally available only to those with excellent credit. Meanwhile, a typical no annual fee cash back card is likely accessible to anyone with good or very good credit.
• The Discover it® Cash Back credit card is among the best no annual fee credit cards on the market. Cardholders earn 5 percent cash back on up to $1,500 in purchases each quarter on rotating categories after activation, and 1 percent thereafter. And the Discover it® Cash Back card requires only a good credit score to apply.

How your credit score affects your credit card approval

Your credit score plays a crucial role in determining whether you will be approved for a credit card. Lenders use this to assess your creditworthiness and ability to manage debt responsibly.

A higher credit score typically increases your chances of approval for credit cards with better terms, lower interest rates and higher credit limits. On the other hand, a lower credit score may lead to rejection or approval for cards with less favorable terms.

Can you get a credit card with limited or no credit history?

You’re not out of luck if you have a limited credit history. There are several ways to get a credit card with limited or no credit, although it may require some form of collateral. But everyone has to start somewhere, right?

Ways in which you can establish a credit history to generate a credit score include:

• Apply for a student credit card. Student credit cards are designed with students who don’t have credit in mind. They offer an excellent way for young adults to start building credit while learning strong financial habits. Student cards often come with notable perks, including student-centric rewards and no annual fees. However, regular APRs can be quite high.
• Apply for a secured credit card. Secured credit cards offer consumers with poor or no credit access to a small line of credit in exchange for a one-time security deposit. The credit limit is often equal to the amount of the initial deposit. This route may be ideal if your main goal is building credit, rather than borrowing money.

What impacts your credit score?

The two major credit scoring models are FICO and VantageScore. Think of these models as equations: They each have their own ways of using your information to generate a numeric score.

Understanding how those scores are calculated can help you get to your desired score.

FICO’s scoring method

FICO scores are grouped into five categories, each contributing a different percentage to what makes up your credit score.

• Payment history: 35 percent
  

  Your payment history is the No. 1 factor in calculating your credit score. Your payment history tells issuers whether you’ve paid on time and as agreed. It also includes the number and severity of any late payments of 30, 60 or 90 days late, the amount past due and whether you eventually repaid your accounts. Paying on time, every time, will put you well on your way to earning a good score. However, other factors are also important.

• Credit utilization or amounts owned: 30 percent
  

  Credit utilization measures how much of your total credit limit you are currently using. For example, if you have a credit card with a $1,000 limit and a balance of $300, you have used 30 percent of your available credit. One thing to note about this factor is that each of your accounts is counted individually and collectively. If you have multiple credit cards, it’s good to know your utilization rate on each one. Experts recommend keeping your utilization below 30 percent, but consider this a neutral point, as being a little bit below or above won’t have a significant impact.

• Length of credit history: 15 percent
  

  Your credit history looks at how long you have been using credit. Unfortunately, you don’t have much control over this factor: your accounts can only be as old as they currently are. Accounts that have been open for at least two years will help your score. Remember, having a limited credit history alone does not mean you’ll have a bad credit score.

• Credit mix: 10 percent
  

  Credit mix refers to the types of credit you have, specifically revolving and installment. Revolving accounts, such as credit cards or lines of credit, are distinct from installment accounts, which can include auto loans, mortgages and personal loans. A lender tends to give greater weight to your performance on the type of loan you’re applying for, and a credit card issuer looks at your experience with other cards more closely. Having a healthy mix of both types of accounts will earn you the most points in this category.

• New credit: 10 percent
  

  New credit makes up the final 10 percent of your total FICO score. You may have read the previous paragraph and thought, “I need to up my credit mix.” While that might be true, take care. Any inquiry for new credit or a line increase stays on your credit reports for two years. A high volume of inquiries within a short period can negatively impact your score. So apply for new credit when you need to, not just because you want to.

VantageScore scoring method

The latest version of VantageScore calculates its score a little differently, using an “influential” scale to determine the importance of each factor:

• Extremely influential are total credit usage, balances and available credit.
• Highly influential are credit mix and experience.
• Moderately influential is payment history.
• Less influential is the age of credit history.

You’ll find other key differences between FICO and VantageScore. FICO requires at least one account to be opened and updated at least once over a six-month period to generate a score, whereas VantageScore can calculate a score even if there is only one account on the credit report, regardless of its age being less than six months.

The latest versions of FICO (10T) and VantageScore 4.0 use trended data, but it could take more time for issuers to switch to it, and for the data to be reflected in your score.

The bottom line

If you have a specific card you’re interested in applying for, check its minimum credit score requirements to see if you might qualify. A fair to good score may not get you the very best card out there, but you still have solid options.

If you can’t qualify for the card you want, a starter card may help you build up your score. And with patience and good scoring habits, you’ll soon qualify for today’s best credit cards.