August 27, 2024

What Credit Score Do You Need To Get a Credit Card?

Renting a car. Shopping online. Making big purchases. These days, you need a credit card for pretty much everything.

But applying for a credit card takes research and work. And you need a solid credit score for lenders to consider you.

If you have low or no credit, it’s still possible to get a card. Here’s everything you need to know about what credit score you need to get a credit card, plus how to improve your score.

What is a credit score?

A credit score, typically between 300 and 850, represents your creditworthiness. Credit bureaus like Experian, Equifax, and TransUnion look at your credit history and give you a score based on your types of credit, debt, and payments.

Most credit bureaus operate on two models: FICO and VantageScore. These models analyze your information and come up with a number. Bureaus often use both models to give you a more holistic look at your credit.

Credit scores help lenders decide if they should lend to you — and that includes credit card providers. A higher score improves your chances of credit card approval, and it can get you better terms, like lower interest rates and better rewards. Consistently paying off a loan positively affects your score, while making late payments negatively affects your score.

FICO score versus VantageScore

FICO and VantageScore have similar frameworks, but they have distinct methodologies.

FICO has a rich history in credit scoring and is known for its specific model parameters, placing more weight on payment history and credit usage. VantageScore was created by the three major credit bureaus and offers a slightly different approach to scoring, considering factors like your total balances and recent credit behavior.

Together, these two scores balance out and give credit bureaus a holistic view of how you spend.

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

So, what is a good credit score? And how high does it have to be to get a credit card?

Different types of credit cards require different score ranges. Generally, a score in the “good credit” bracket boosts your eligibility. That means a credit score of 660 or above opens doors to solid credit card offers, including reward credit cards and lucrative cashback schemes.

But this isn’t a hard and fast rule. Many issuers provide credit card options for those with lower scores, like secured credit cards, which often require a security deposit. Some cards also don’t have minimum credit scores at all. They just have lower credit limits to prevent you from spending more than you can manage.

Credit score ranges

Both FICO and VantageScore have brackets that rate how good your score is. Here’s a breakdown:

Rating	FICO	VantageScore	Details
Exceptional/Excellent	800–850	781–850	This range indicates strong financial reliability. It gives you the best credit card offers, including those with substantial rewards and low annual percentage rates (APRs).
Very Good/Good	740–799	661–780	This score represents good credit management and qualifies you for most credit cards, including popular ones like Capital One Platinum.
Good/Fair	670–739	601–660	People in this bracket may be eligible for unsecured credit cards but often face higher interest rates.
Fair/Poor	580–669	500–600	While this score isn’t the worst, it does limit you from most credit cards and loans.
Poor/Very Poor	300–579	300–499	This range is the minimum credit score for a credit card, but the options are very limited. You might need to start with a secured credit card to build credit.

5 factors that influence your credit score

Here are the five factors that FICO and VantageScore consider:

1. Payment history

Payment history accounts for a substantial portion of your credit score, especially with FICO. It includes whether you’ve paid off credit obligations and if you did so on time. Late or missed payments can significantly harm your score because they suggest you’re unreliable. Consistently paying bills on time, including credit cards, loans, and utilities, reinforces a trustworthy financial image.

2. Credit utilization ratio

This measures the percentage of the available credit you’re using at any given time. A low credit utilization ratio, ideally below 30%, is key to a healthy credit score. That means if your credit limit is $1,000, you should use $300 or less. High utilization suggests you’re too reliant on credit.

3. Length of credit history

This factor includes the age of your oldest credit account, the age of your newest credit account, and the average age of all your accounts. A longer credit history generally gives you a higher score because there’s more data to pull from. That’s why most advisors say you shouldn’t close your old credit accounts.

4. Types of credit in use, or credit mix

Credit scores also consider the mix of credit types you hold. This can include revolving credit (like credit cards), installment loans (like auto loans, personal loans, and mortgages), and other forms of credit. A diverse mix of credit types positively affects your score because it shows your ability to manage different forms of credit responsibly.

5. New credit

Every time you apply for credit, lenders perform hard checks to look at your score. Each new check lowers your score. That’s because lenders think opening several new credit accounts in a short period is risky. Be intentional about when and how often you apply for new credit.

How to improve your credit score

Learning how to increase credit scores requires commitment and strategy — and it’s not as out of reach as you think. Here are a few effective ways to enhance your score:

1. Make timely payments. Pay all debts on time. Consistent, timely payments are a cornerstone in building a good credit score, and this helps you avoid high interest rates.

2. Don’t use too much credit. Keep your credit utilization ratio low. Using less than 30% of your available credit shows financial restraint and trustworthiness.

3. Balance your credit mix. A diverse mix of credit types, like personal loans, auto loans, and credit cards, can positively influence your score.

4. Limit new credit inquiries. Applying for new credit too often can negatively impact your score. Be selective about opening new accounts.

5. Check your report often. Use EarnIn’s free Credit Monitoring tool to check your credit often. This helps you spot mistakes or pain points before they become bigger problems.

Track your credit score with Earnin

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1. EarnIn is a financial technology company, not a bank. Subject to your available earnings, Daily Max and Pay Period Max. EarnIn does not charge interest on Cash Outs. EarnIn does not charge hidden fees for use of its services. EarnIn services may not be available in all states. Restrictions and/or third party fees may apply. EarnIn services may not be available in all states. For more info visit earnIn.com/TOS

2. Calculated on the VantageScore 3.0 model. Your VantageScore 3.0 from Experian® indicates your credit risk level and is not used by all lenders, so don't be surprised if your lender uses a score that's different from your VantageScore 3.0. EarnIn services may not be available in all states. Learn more: https://www.experian.com/assets/consumer-information/product-sheets/vantagescore-3.pdf