Have bad credit? Here are the top offers designed to help you rebuild your credit and improve your score. Make sure to pay on time and keep a low balance (relative to your credit limit) and this may improve your credit report each month. New to credit cards? See offers from our partners for students or those with no credit. Looking for more? Go to CreditCards.com to browse card offers for other categories like 0% APR and cash back, or check out our expert's list of the best credit cards of 2018.
See the best credit cards for bad credit from our partners below. Looking for more? Go to CreditCards.com to browse card offers for other categories like 0% APR and cash back, or check out our expert's list of the best credit cards of 2018.
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Updated: May 14, 2018
OK, so your credit isn't at its best. Maybe you don't have much experience with paying bills, or perhaps you've had a couple of late payments. Well, we've got your back.
It may seem counterintuitive, but the best and fastest way to firm up that sagging credit is with a credit card. That's right. Believe it or not, with the right credit card, you can improve your credit in a few short months. The trick is to know how. We'll tell you what you need to know and how to do it so there aren't any surprises along the way. Here's what we look at:
Not sure where to start? We can help.
Credit cards for bad credit analyzed: 269
Criteria used: Credit needed, deposit required (if any), hidden fees, annual fee, regular APR, other rates and fees, customer service, ability to improve credit line, tools to track credit score, rewards rates, security, miscellaneous benefits
A "bad credit" FICO score is typically under 580 out of a range of 300-850, with 850 as the best. With the same scale, a poor VantageScore is usually below 550.
To get a good or excellent rating, you'll want to shoot for at least 700. Below that and you'll be offered higher interest rates and other not-amazing financial products. (More on that later.)
That's the bad news. The good news is that it takes a few short months of good consumer behavior to improve your score. But beware: Once you're on the path to good financial habits, you'll want to keep it up, because one misstep can drop your score quickly, in fact considerably more quickly than when you were improving your credit.
Bad credit is determined by how you have handled your credit over the years. If you have missed payments or even just don't have a lot of information in your file, your credit may not be great. The two most important components of your FICO score are on-time payments (35% of your score) and how much you owe compared to how much credit you have available (30% of your score). That means if you have had late payments, that is likely the primary cause of your poor credit, but if you have a high balance on the credit cards you have, that can be a heavy weight as well.
|FICO Category||FICO Score||VantageScore Category||VantageScore|
Credit bureau Experian studied data from scoring model FICO and found that 17% of consumers have bad credit. More than a third of the population has what lenders call a subprime score, which includes the fair and poor categories. At the other end, Americans with exceptional scores make up 19.9% of the population.
But what do those scores mean for you? Here, we look at the percentage of people with each scoring range and what that score means for them.
|Credit Score||Rating||% of People||Impact|
|300-579||Poor||17%||Credit applicants may be required to pay a fee or deposit, and applicants with this rating may not be approved for credit at all.|
|580-669||Fair||20.2%||Applicants with scores in this range are considered to be subprime borrowers.|
|670-739||Good||21.5%||Only 8% of applicants in this score range are likely to become seriously delinquent in the future.|
|740-799||Very Good||18.2%||Applicants with scores here are likely to receive better than average rates from lenders.|
|800-850||Exceptional||19.9%||Applicants with scores in this range are at the top of the list for the best rates from lenders.|
FICO data, from Experian
Credit bureaus do not assess your creditworthiness. That's the job of credit scores.
Your credit report is the accumulation of credit behavior in the last 7-10 years. Your credit score is a measurement of the data from the credit report.
Lenders send your credit data to the three major credit bureaus, TransUnion, Experian and Equifax. Each bureau generates a report, which includes personal information, such as your name and past addresses, your accounts and whether you paid bills on time.
Credit score models FICO and VantageScore use a formula with 5-6 major components, including on-time payments, a debt-to-available-credit ratio, and other credit habits. The data for the components come from the credit reports.
You actually have more credit scores than fingers and toes, but no need to worry. There are more than a dozen credit scores for each credit bureau, many for different industries, such as auto, mortgage and credit cards. But the scores you'll want to worry about for now are the consumer versions available to you through FICO and VantageScore.
The most valuable aspect of the FICO scoring model, the model most used by lenders, is payment history, making up 35% of your score. The same is true of VantageScore. That's why it's so important that you pay your bills on time each month. Here is what the scoring models care about:
Credit bureau TransUnion found that a surprising number of consumers misunderstand what is used to generate their credit reports and scores. From marital status to income, Americans wrongly think that their credit data are influenced by characteristics that have little to do with financial health.Here are 6 myths TransUnion discovered in its study:
This survey, conducted in June 2017, polls 1,002 U.S. adults. The fact is that 65% of your FICO credit score is tied to on-time payments and low balances. Your race, marital status, income, whether you have kids – none of that factors in. Instead, it's about how you treat your finances, such as your variety of lending products and how often you apply for credit.
Credit cards sometimes offer free credit scores, so check if the card you are eyeing offers that feature.
You can also get your VantageScore for free through creditcards.com.
You can access your TransUnion credit report for free on creditcards.com, or on the one site directed by federal law to release the 3 reports for free: AnnualCreditReport.com.
You are legally allowed to access each report for free once a year on this site. Some credit experts recommend that you pull one of your reports every 4 months, staggering the requests. You can pull your credit report on creditcards.com once a month.
The AnnualCreditReport.com portal will ask for personal data, such as your birthdate and your social security number, ask you to choose which credit bureau's report you want, then ask you a series of detailed questions only you would know, such as payment amounts for past loans, past addresses and other information. It helps to have this information handy when you pull a report. If you answer incorrectly, you may be shut out of the system for that bureau, and you may have to apply by snail mail.
Check the report thoroughly for inaccurate information, such as unknown accounts. Request that the bureau correct any inaccurate information, preferably by snail mail, so that you don't lose any negotiation rights.
Ready to build your credit? There are a number of tricks to increase your score to one you love, and it only takes a few months, if you do it correctly.
Once your score is at about 700 on a scale of 300-850, your credit card options will open up considerably. But first, follow these steps:
One is to build your credit so you can take out a card for building cash back, attaining superior travel benefits or gathering travel points or miles. Here, we look at some cards that require excellent credit to keep in your sights.
|Card||Credit Required||Rewards||Annual Fee|
|Chase Freedom Unlimited®||Excellent/Good||$150 bonus/$500 spend in 3 mths; 1.5% back on all purchases||$0|
|Capital One® Venture Rewards®||Excellent, Good||50,000 miles/$3,000 spend in 3 mths; 2X miles on every purchase||$95, waived first year|
|Chase Sapphire Preferred®||Excellent/Good||50,000 pts/$4,000 spend in 3 mths; 2X pts on worldwide travel & dining; 25% boost in points when booking travel through Chase Ultimate Rewards||$95, waived first year|
|Southwest Rapid Rewards® Plus||Excellent||40,000 pts/$1,000 spend in 3 mths; 2X pts on Southwest® and Rapid Rewards® Hotel and Car Rental Partner purchases||$69|
Secured credit cards are an excellent way to build credit, provided the card issuer reports your good credit habits to the 3 major credit bureaus, TransUnion, Experian and Equifax.
Secured cards are credit cards that require a refundable deposit, usually the same amount as your credit limit.
Bad credit doesn't have to dog you. In fact, cards that accept consumers in the "bad" category can help you build your credit within months. Two different types of "bad credit" cards are secured cards and unsecured cards:
Secured card – The secured card is perhaps the best known type of card for people with bad credit. Here's how it works: You pay a refundable deposit, say $200, then you are allowed to borrow off of that amount on your card. Some cards require you to have a bank account.
|Card||Credit Needed||Annual Fee|
|Capital One Secured Mastercard||Limited/Bad Credit||$0|
|Discover it Secured Card||Limited/Bad Credit||$0|
|First Progress Platinum Prestige Mastercard Secured Credit Card||Bad Credit||$49|
|OpenSky Secured Visa Credit Card||No Credit Check||$35|
Unsecured card – An unsecured card is best known as a rewards, travel or cashback card, but in this case, it is a credit-builder card without the required deposit of a secured card. While the credit limit will likely be low, these cards can have small cashback benefits of about 1%.
|Card||Credit Needed||Annual Fee|
|Total Visa Unsecured Credit Card||Bad/Fair Credit||See Terms|
|Credit One Bank Unsecured Visa with Cash Back Rewards||Bad Credit||$0-$99|
|First PREMIER Bank Classic Credit Card||Fair/Bad Credit||See Issuer Website|
|Credit One Bank Unsecured Visa with Free Credit Score Tracking||Bad Credit||$0-$99|
Watch out for fees with both types of cards. You can be charged a servicing fee, an annual fee and other charges. Check the rates and fees link on the card's landing page.
A secured card is a credit card that can be used to build credit.
A prepaid card acts like a credit card, but you "load" money in it periodically for spending purposes, so it isn't truly a credit card, which lends you the money for charges. Prepaid cards are a great tool for budgeting and managing your spending, particularly if you've had trouble with finances in the past.
A debit card is a card attached to an account with cash in it, such as a checking account. Debit cards may not have the protections of credit cards because they are not protected by the Credit CARD Act of 2009. Rules vary among banks and credit unions. Debit cards are a good option for convenience.
Prepaid cards are not credit cards, and they don't help you build credit. If you want to build credit, a secured credit card is a good start. Just make sure you put a small charge on the card each month to keep the account open and active. And of course, pay in full and on time so that you take full advantage of your credit building.
A debit card, which is attached to a bank account, also cannot be used for building credit.
If you feel ready to tackle acquiring a credit card, but you know your options are limited, never fear. It's feasible to get a credit card, even with credit that isn't so great. Here are some steps you should take before applying:
If you have bad, thin or no credit, don't despair. There is a card for pretty much every circumstance, from great credit to none. You just need to make sure you apply for the right card for your credit.
Credit cards for bad credit have a number of features that mimic the cards reserved for consumers with excellent credit. But they also have features and downsides tailored to the consumers whose credit may not be their best.
Here's what to look for:
|Card||Credit Required||Annual Fee|
|Total Visa Unsecured||Bad/Fair||See terms|
|First PREMIER Bank Mastercard||Fair/Bad||See issuer website|
|Card||Credit Required||Rewards||Annual Fee|
|Credit One Bank Unsecured Visa with Cash Back Rewards||Bad Credit||1% cashback rewards on eligible purchases including gas, groceries, and services such as mobile phone, internet, cable and satellite TV; terms apply||$0-$99|
|Discover it Secured Card||Limited/Bad Credit||2% cash back at restaurants & gas stations on up to $1,000 in combined purchases each quarter||$0|
When you have poor or bad credit, your credit product options are severely limited. But even if you could scrape through and land a card for better credit, if you have a bad track record with your finances, there are cards you'll want to avoid:
From the rental car waiver of Chase Sapphire Preferred to the $600 protection on your cellphone (subject to $25 deductible) of Wells Fargo Cash Wise Visa® Card, there are myriad reasons why cards with excellent credit are a worthy goal.
With excellent credit, you can get a card that gives you access to airport lounges as in the case of the Citi/AAdvantage Executive World Elite Mastercard; a $300 annual airline credit in the case of the Chase Sapphire Reserve; or employee cards with the Business Gold Rewards from American Express.
But if you haven't achieved that credit score of at least 700, then focus on finding a card for bad or fair credit.
While you work on your credit score, though, you can enjoy a credit-builder card that offers rewards and even no annual fee. Here is a comparison of 2 cards, one with excellent credit and one with poor:
|Card||Credit Needed||Builds Credit?||Rewards||Annual Fee||Other Benefits|
|Capital One® VentureOne® Rewards Credit Card||Excellent, Good Credit||Yes||Earn unlimited 1.25 miles per dollar on every purchase||$0||Sign-up bonus, no foreign transaction fees, 0% intro purchase APR offer|
|Credit One Bank Visa||Bad Credit||Yes||1% cashback rewards on eligible purchases including gas, groceries, and services such as mobile phone, internet, cable and satellite TV, terms apply||$0-$99||Custom emails, text messages as reminders|
You get your new credit card; you put purchases on it; you make payments each month; then you forget one. What happens next?
Most card issuers charge a late fee, and they might also increase your purchase APR. Repeated offenses can cause you to lose the account. Finally, late and missed payments impact your credit score, and that's what you should care about most.
Missed payments can quickly drop your credit score by dozens of points and it can be months before you see an improvement. The good news is that the older the missed payment is on your credit report, the less importance it has.
If you've missed a payment, call your card issuer immediately. Explain your circumstance, work out a payment plan and see if they'll waive the late fee. You might even be able to get them to not report the late payment to the credit bureaus. It doesn't hurt to ask.
Now, going forward, put a reminder on your Google calendar that goes to your email to make sure you pay on time each month. For good measure, pay in full each month to keep your credit utilization ratio low, an important part of your credit score.
If you've missed payments or gotten in over your head, it's time to own up and call your card issuer. The bottom line is that you are ultimately responsible for the debt you've incurred. You spent the money, and now you need to make things right.
A number of things may be happening with your account at this point. Your purchase APR may have increased. Your credit limit may have dropped. The account may have even been closed. The sooner you talk to your issuer, the less damage will be inflicted.
First off, stay calm when you call. Raising your voice and making accusations will achieve nothing. Explain your circumstance, tell them what you are prepared to do to make it right, and ask if the APR can be lowered/the account can be reopened/your credit limit can be returned to the original amount.
In fact, almost 9 out of 10 consumers polled said that their issuer granted them a late payment waiver when they asked. Here's what creditcards.com learned from 952 American cardholders:
Also, if the issuer is sending late payment notices to the credit bureaus, make a deal with them so that they stop. If you can't pay the owed amount in full, arrange a payment schedule. But, you'll want to pay off the debt as soon as possible so the damage to your credit score is not so severe.
So, you picked out a card, you did your research, yet you were denied. What to do?
Your first step needs to be to request from the card issuer why the application was denied. That will help inform your decisions going forward.
If the issue is your credit score, you can look at a credit-builder loan at your credit union. About one in five credit unions offer credit-builder loans. These loans are offered a number of ways: For example, there are unsecured credit-builder loans that provide a lump sum upfront that can be used for an emergency expense. With another type, the loan proceeds are held by the lender until the total amount is paid.
Some card issuers offer to prequalify you, which means they look at your credit to assess whether you are likely to be approved, but the soft pull on your credit does not affect your score. For example, Milestone Gold Mastercard promises a quick decision on their prequalification.
Keep checking your credit score and your credit files with the credit bureaus. Make sure everything is accurate and clear up anything that is not.
Apply for another card cautiously, because unless the issuer indicates otherwise, your credit takes a small hit each time you apply, whether you are accepted or not. Wait a couple of months before applying again if there is going to be a hard pull.
It's worth your while to improve your credit score – for obvious and not-so-obvious reasons.
Not only lenders look at your creditworthiness, but also landlords, employers, your cellphone company and insurance company – and even your date on Friday night. In fact, Bankrate found this to be a pretty big issue for singles in the market in a 2017 poll.
A Bankrate Money Pulse survey found that a full 50% of women would be influenced by a credit score when deciding to date someone, while 35% of men said the same thing.
So, yes, it is definitely worth your while to work on improving your credit.
There are a few rules to responsible card use. To use your credit card wisely, do this:
One very compelling reason to improve your credit is so that you can take out a card with a better APR. While you don't want to carry a balance if at all possible, you definitely don't want to be saddled with a debilitating interest rate.
Here is a comparison of APRs for cards with bad and excellent credit.
|Capital One VentureOne Rewards||Excellent, Good||13.49%-23.49% Variable|
|Credit One Bank Visa||Bad||19.15%-25.24% Variable|
|Milestone Gold Mastercard||Bad/Poor||23.90%|
As you can see, the cards that require good or excellent credit have considerably lower starting points on their APRs.
|Best For...||Credit Card||Annual Fee||Deposit Requirement|
|Building credit||Capital One® Secured Mastercard®||$0||$49, $99, or $200 (Refundable)|
|Cash back||Discover it® Secured Card||$0||$200 (Refundable)|
|Initial credit line||Surge Mastercard Credit Card||See Terms*||See Terms*|
|Groceries||Credit One Bank® Visa® Credit Card||$0 - $99||None|
|Chip technology||First PREMIER® Bank Mastercard® Credit Card||See Issuer Website||None|
|Easy application||Total VISA® Unsecured Credit Card||See Terms*||None|
|Fast response||First PREMIER® Bank Credit Card||See Issuer Website||See Issuer Website|
|Wide acceptance||Milestone® Gold Mastercard®||$35 - $99||See Issuer Website|
|Growing credit line||Credit One Bank® Unsecured Visa® with Cash Back Rewards||$0 - $99||None|
|Low monthly payments||Fingerhut Credit Account issued by WebBank: Best for low monthly payments||$0||See Terms|
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