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What credit score do you need for a credit card?

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Credit scores have become an essential part of leading a successful life. This may come as a shock, but some people don’t know that credit scores are not part of your credit report. They are a separate product that uses the information contained in your credit report, with a few exceptions, to calculate a number that represents your likelihood of defaulting on your next loan.

However, if you are holding off on applying for a credit card because you fear your three-digit score is too low, don’t fret. It is true that the higher your credit score, the higher quality credit card you are qualified for, but that doesn’t mean you can’t qualify for a solid credit card in general. Let’s take a deeper look into what impacts your credit score and what credit score you will need to qualify for different types of credit cards.

What impacts your credit score?

While there are many scores out there, we will be focusing on FICO and VantageScore for this exercise. If you are in the market for a new credit card or need to know what your score is for another reason, you will probably be interested in one (or both) of these scores. Understanding how those scores are calculated will help you get to the score you want.

FICO’s scoring method

Payment history (35 percent): Payment history is the number one factor, counting for 35 percent of your total score. Payment history shows if you have paid on time and as agreed. It also includes the number and severity of any late payments (30, 60, 90 days late), the amount past due and whether you eventually repaid accounts. Paying on time (every time) will put you well on your way to earning a good score. But other factors are important, too.

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 you have a balance of $300, you have used 30 percent of your available credit. One thing to note about this factor—each of your accounts will be counted individually and as a group. So, if you have several credit cards, it’s good to know your utilization rate on each card. Experts recommend you keep your utilization below 30 percent, but consider that a neutral point.

Length of credit history (15 percent): Credit history counts for 15 percent of your FICO score and 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 will have a bad credit score.

Credit mix (10 percent): Credit mix looks at the types of credit you have and counts for 10 percent of your score. There are basically two types of accounts—revolving and installment. Revolving accounts are mostly credit cards or lines of credit, while installment accounts can include auto loans and mortgages as well as personal loans. A lender will usually give greater weight to your performance on the type of loan you have applied 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, be very careful here. Any inquiry for new credit or a line increase will stay on your credit reports for two years. A high number of inquiries in a short time has a negative effect on your score. So you should only 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. Counted as “extremely” influential are total credit usage, balances and available credit. “Highly” influential are credit mix and experience. Payment history is “moderately” influential, while age of credit history and new accounts are “less” influential.

There are a couple of other key differences between FICO and VantageScore. While both access credit reports, FICO will only use one bureau’s report to calculate a score. This means your scores might be different from Equifax, Experian or TransUnion, depending on which report was pulled to get your score. VantageScore uses all three reports to calculate its score. Also, FICO needs at least one account to be opened and updated at least once over six months to generate a score. VantageScore can calculate a score after just one to three months of activity.

The latest version of FICO (10T) and VantageScore 4.0 use trended data, but right now it might not show up in your FICO score, since most issuers haven’t switched to the latest version of FICO yet.

What credit score do you need to get a credit card?

It depends on the card. FICO ranks scores from poor to exceptional:

  • 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:

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

What credit score is needed for a credit card?

There is a credit card out there for just about anyone with just about any credit score. But the cards available to lower-scoring consumers will not come with the best rates or terms.

Cards for fair/average credit

A fair FICO credit score ranges from 580 to 669, according to Experian, and there are a number of solid credit cards to choose from if you fall under this category. For starters, 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. Unfortunately, the Capital One Platinum doesn’t offer any rewards or noteworthy cardholder perks, but it is available for consumers who find themselves with fair/average credit.

On the flip side, the Capital One QuicksilverOne Cash Rewards Credit Card offers a solid rewards program with only a $39 annual fee. Cardholders can earn unlimited 1.5 percent cash back on all purchases, every day. For a rewards credit card that requires a credit score ranging from 580 to 740, this is a great option for individuals working to build their creditworthiness while also earning cash rewards.

You can also consider a secured credit card. Secured cards look and function just like any other card, but you will have to “secure” the card’s spending limit with your own money. Your security deposit will be kept in an FDIC insured account so it will be safe. But if you don’t pay, you’ll lose your deposit. One word of caution here, though: before you sign up, be sure that the card will be reported to the credit bureaus—not all are.

Cards for good to excellent credit

If you have a credit score in the good (670-799) to excellent range (800+), you will likely be able to qualify for a card that earns you rewards for your spending. However, not all rewards cards (or issuers) have the same credit requirements, so it’s still a good idea to do some research before you apply.

For example, the Chase Sapphire Reserve® has excellent rewards and comes with multiple perks. But this $550-annual-fee card is generally available only to those with excellent credit. Meanwhile, a typical no-fee cash back card is likely accessible to anyone with good or very good credit. The Discover it® Cash Back credit card is one of 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 (1 percent thereafter). The Discover it Cash Back card is quite accessible, only requiring a good credit score to apply.

No matter your score, the CardMatch tool can give you an idea of which cards you can qualify for.

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

You are not out of luck if you have a limited credit history. There are a few ways you can get a credit card when you have limited or no credit, although it may involve some collateral. But everyone has to start somewhere, right? Right.

So, let’s take a look at a few of the different ways you can establish a credit history in order to generate a credit score.

  • 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. While student cards typically come with noteworthy perks, such as student-centric rewards and no annual fees, regular APRs can run quite high.
  • Apply for a secured credit card: Secured credit cards give 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 50 percent to 100 percent of the amount of the initial deposit. This route may be ideal for individuals who are looking for ways to practice strong financial habits because you are relying on your cash deposit to make purchases.

How to estimate your credit score

MyFICO.com has a handy calculator that asks some basic questions to help you estimate your score. You might even be able to answer the questions this calculator asks without pulling a credit report depending on how well you know your current financial situation. You may also be able to access your score through your financial institution or with one of your current creditors. Many credit card issuers offer free reports and scores as part of their benefits package.

Many websites also tout free scores. The score you get may or may not be a FICO or VantageScore or a current version of either. The number you get from the bureaus, a credit card company or a website won’t match the one your lender has, but that’s OK. The score will be different depending on which score, version and credit report are used. Even if the numbers are different, they almost certainly point to the same risks, and that’s what really counts. A good score is a good score regardless.

How to improve your credit score

The key to improving your credit score is to pay your bills on time and in full each month. When you use your credit card wisely and adopt healthy habits, your credit journey will run a lot smoother. There are a few other avenues worth considering if you are looking beyond making on-time monthly payments, such as the following:

  • Become an authorized user. One way you can give it a nudge is by being added as an authorized user on someone else’s credit card account. This is used mostly by parents who want to give young adults a bit of a leg up. Becoming an authorized user is a great way to establish a credit history or rebuild your credit, however it comes with a load of responsibility and trust. Lastly, it is important to check whether or not the issuer will report data to the three credit bureaus to ensure the information is reflective on the authorized user’s credit report.
  • Limit credit inquiries. Every time you apply for a new credit card, a hard inquiry shows up on your credit report when the lender pulls your credit file. This dings your credit score a few points, although temporarily. When you are shopping for a new credit card, don’t apply for dozens of cards. Do your research ahead of time to ensure you’re applying for the right card. Your credit score will thank you in the long run.
  • Don’t go over your credit limit. When you go over your credit limit, you risk lowering your credit score. As we discussed previously, 30 percent of your credit score is based on your credit utilization ratio. So, although you aren’t maxing out all of your credit cards when you go over your credit limit on just one of your cards, you are still exceeding 30 percent utilization across all of your accounts. This will ultimately hurt your credit score because it is recommended to fall below 30 percent credit utilization.

The bottom line

If you have a specific card in mind, you can check on their credit score requirements to see if you think you might qualify. While nothing is set in stone, it is good to have an idea of what you are aiming for. A fair to good score will not likely score you the very best card out there, although you still have some solid options. If you can’t qualify for the card you want, a lesser card will still help you build your score up. With some patience and good scoring habits, you’ll soon qualify for the best of them!