Getting a Credit Card With Bad Credit

Learn more about applying for a credit card if you have a low credit score

Having a poor credit history can be frustrating. It can make it more challenging to be approved for things like mortgages, car loans and—yes—credit cards. 

But there are steps you can take to improve your credit.

1. Understand What “Bad Credit” Means

Credit scores help measure how safe or risky it is to lend to someone. They’re based on credit history and used to predict how likely borrowers are to repay loans on time. Generally, credit scores are measured on a scale from 300 to 850. And credit bureaus use different scoring criteria, so having multiple scores is normal.

Even if your score is on the low end, it’s possible to be approved for a credit card, but your options may be limited. Many credit card issuers have cards specially designed for those with less-than-perfect credit. Keep in mind that some issuers may charge you higher interest rates or other fees if you have a lower credit score.

Learn more about how to get approved for a credit card.

2. Monitor Your Credit

To get a better idea of where your credit stands, consider using a tool like CreditWise® from Capital One®. CreditWise is free and available to everyone. And checking your score won’t hurt your rating. 

Even if you’re not a Capital One cardholder, you can use CreditWise to track changes to your TransUnion® VantageScore® 3.0 credit score. CreditWise can also help you monitor inquiries, delinquent accounts and more. 

You can also use CreditWise to understand the potential impact of your financial decisions—like applying for a credit card—before you make them. Knowing where your credit stands could help you avoid applying for cards you’re unlikely to be approved for. 

3. Organize Your Finances

Start by taking a look at things like cost-of-living expenses to help determine where your money goes each month. It’s another way to get a sense of what credit card may be right for you. For example, if a big portion of your monthly spending goes toward food and groceries, you could explore credit cards that offer additional rewards on those expenses. You may not be in a position to get one immediately. But as you rebuild your credit, it could be a goal to work toward.

Even if you don’t think you’re in a position to be approved for a particular card, you could make it a goal to apply after you’ve worked on improving your credit.

Having a sense of what you’re spending and saving can also help you create a budget and avoid living beyond your means. And being mindful about your finances and developing good habits can help you even after you get a credit card. That’s because using your card responsibly is one key to rebuilding credit.

4. Compare Credit Cards Available for People With Bad Credit

A secured credit card can be a great option for people trying to rebuild their credit. Secured cards function a lot like traditional cards—and they even look the same in most cases. But one difference is that they require a cash deposit upfront that the issuer holds as collateral, similar to the security deposit given to a landlord before you rent a home or apartment.

Traditional, unsecured cards may also be an option. Comparing offers before you apply for a credit card could help you find the right card to fit your needs. It could also help you avoid a card with higher fees and interest rates. Here are a few things to look out for:

  1. Fees: Comparing the APR of different cards is a good place to start. If you’re looking to improve your credit without spending a ton on fees, take note of other potential charges, such as annual fees, cash advance fees, late payment fees and balance transfer fees.
  2. Credit reporting: If you’re using your card responsibly and making on-time payments, that reporting may be one potential benefit of using a credit card instead of prepaid or debit cards. So if you’re considering a secured card, check that the issuer reports to all three major credit bureaus—Equifax®, Experian® and TransUnion. 
  3. Upgrade options: As you rebuild your credit, your card issuer might allow you to graduate to a new card. That could allow you to keep the account open—which may help you maintain a longer credit history.

5. Develop Responsible Credit Habits

There are a number of good credit habits that you can start to develop before you apply for a credit card.

Paying something like your utility or phone bill on time may not directly improve your credit, but not doing so could be harmful, especially if you are reported to a collection agency.

If your goal is to get a credit card, paying on time is an especially important habit to develop. If you need help keeping track of bills, you could consider automatic payments or electronic reminders. 

Once you’ve compared credit cards, consider how many applications you plan to submit. Credit scoring formulas account for your recent activity. And multiple hard inquiries could reflect negatively on your situation.

If you’re approved for a credit card, it’s a good idea to be mindful of how close you are to your credit limit. Experts say not to use more than 30% of your total credit limit. For a $500 credit limit, that means no more than $150.

We hope you found this helpful. Our content is not intended to provide legal, investment or financial advice or to indicate the Capital One product or service is available or right for you. For specific advice about your unique circumstances, consider talking with a qualified professional.

Your CreditWise score is calculated using the TransUnion® VantageScore® 3.0 model, which is one of many credit scoring models. It may not be the same model your lender uses, but it can be one accurate measure of your credit health. The availability of the CreditWise tool depends on our ability to obtain your credit history from TransUnion. Some monitoring and alerts may not be available to you if the information you enter at enrollment does not match the information in your credit file at (or you do not have a file at) one or more consumer reporting agencies.

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