What Credit Score Is Needed To Be Eligible for a Credit Card?

Credit scores play a significant role in personal finance, and having an excellent credit score opens up many opportunities. However, having a bad credit score isn't the end of the world. Your credit score isn't included in your credit report; it’s merely information used to calculate the odds of you defaulting on your loan.

Before we dive into the specifics, let's get a quick overview of the credit score range according to FICO (Fair Isaac Corporation):

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

So, we can see that FICO scores range from 300 to 850. At this stage, it’s important to note that the higher your credit score is, the more favorable options you'll have at your disposal.

The Lowest Credit Score for a Credit Card

The answer here is simple – whatever your credit history, you can qualify for some sort of credit card. Of course, the credit card company may be wary due to you making late payments in the past. Still, options exist, even if they’re not exactly what you’re after. 

A good credit score typically comes with various perks, depending on the card. If your score is excellent, you can choose from multiple credit cards with outstanding offers.

Factors That Impact Credit Scores

Here are some of the most critical factors affecting credit card approval according to FICO’s methodology:

Payment History

One of the essential factors in determining your credit score is your payment history. It counts for 35% of your total score, showing credit card issuers whether or not you have a history of timely payments according to the agreed-upon conditions.

Moreover, it includes information about untimely past payments, which were 30, 60, or 90 days late, the amount owed on those accounts, and whether you have since repaid the debt.

Therefore, timely payments are crucial to maintaining a good credit score. But to get a credit card, you must also consider some other factors.

Credit Utilization Ratio

This is a term that refers to the amount of credit you’re using in relation to the total amount of credit available to you. In other words, it measures to what extent you currently use your credit limit and counts for 30% of your overall credit score. Refer to the following table for a straightforward explanation:

Many experts recommend maintaining a credit utilization rate below 30%, which is generally considered a neutral point. Still, the lower the rate of use within your credit limit, the better your credit score will be. 

Credit History Length

Accounting for 15% of your FICO score, your credit history refers to how long you’ve been using credit.

Although this is something beyond your control, accounts that have been open for at least two years usually help improve users’ credit score. That said, having a limited credit history does not necessarily mean you’ll have bad credit.

Credit Mix

Credit mix counts for 10% of your credit card score and refers to the various types of credit you’re using. The two principal types of credit in this regard are revolving and installment. Revolving accounts typically refer to credit cards and lines of credit, while some of the most common installment accounts are personal loans and mortgages. 

Usually, lenders give greater weight to your past performance when it comes to repaying loans. On the other hand, credit card issuers look more closely at your experience with other cards. The best way to earn points in this category is to have a healthy mix of both types of accounts.

New Credit

The final 10% of your FICO score relates to new credit. You might think you need to add to your credit mix to improve your score. However, be cautious when applying for new credit or increasing your credit limit, since it can negatively impact your score.

Inquiries will stay on your credit report for two years; too many of them in a short period can hurt your score. Apply for new credit only when you need to, not to improve your credit mix.

Getting a Credit Card With Limited or No Credit History

It’s common for applicants with limited or no credit history to get credit cards. This approach might require collateral, though. There are two common ways of establishing a credit history for people without credit scores.

Secured Credit Card

A secured credit card may be a good option for someone with poor or no credit who wants to build up their credit history. With this type of card, the credit limit is usually between 50% and 100% of the money put down as a security deposit.

So if you're looking to establish good financial habits, a secured credit card could be helpful, as it makes its holders rely on a cash deposit. 

We’ve written an article that explains what an unsecured credit card is and its pros and cons compared to a secured card. 

Student Credit Card

Credit cards are available to students with no credit history yet. They serve as a convenient way to build up a credit score for a credit card before application.

These cards can help young adults learn financial management while building up their credit scores. Although student credit cards often have significant benefits, like rewards programs and no annual fees, credit card issuers can charge pretty high regular APRs (between 14.49% and 26.49%, more or less).

Consider reading our APR guide if you want to understand credit card interest rates better.

Credit Score Improvement Tips

If you need to improve your bad credit score to get a low-interest loan or apply for a rewards card, try the following:

Don't Breach Your Credit Limit

When you exceed your credit limit, you may lower your credit score. Therefore, even if you go over the limit on just one card, that might count as using more than 30% of your credit across all accounts. Keeping credit limits within the established range is essential, so don't let your credit card debt get out of control.

Be an Authorized User

Becoming an authorized user on someone else's credit card account is a convenient way to improve a credit score. It can be a great way to establish or rebuild your credit history by assisting someone who trusts you.

Don’t Apply for Many Cards

Do the research and only apply for those you're likely to be approved for, since applying for too many credit cards can hurt your credit score in the long run.