What are the Best Credit Cards for Fair Credit?
Updated: June 1, 2018
Fair credit may not be the best of credit, but there’s hope. With the average VantageScore at 675, that’s right in the middle of what the scoring model deems fair or what is sometimes called average. With fair credit, you can build your score, earn some rewards and develop good financial habits.
We researched and analyzed over 160 credit cards designed for people in the fair credit range and evaluated them against several different criteria: rates and fees, rewards, customer service, ability to improve credit lines, and more. Below are our top picks and several tips to help you decide and improve your credit for the future. Here, we look at:
Not sure what to expect? We’ll share how to build credit and how to maximize your fair credit card.
Expert picks: CreditCards.com's best credit cards for fair/average credit of 2018
Credit cards analyzed: 161
Criteria used: Credit needed, tools to track credit score, ability to improve credit line, rewards rate, rewards categories, sign-up bonuses, redemption options, promotional 0% APR periods, annual fee, other rates and fees, extra features and benefits, customer service, ease of application
What is fair/average credit?
The two major credit scores in the United States are provided by FICO and VantageScore. FICO is the creator of the first, and still most-widely used score. Both scores range from 300 to 850. Each defines “fair” credit slightly differently.
FICO score ranges
According to FICO, credit scores are based on the following factors:
- Payment history: 35 percent
If you make a payment 30 days past the due date or later, it will most likely appear on your credit report. The later the payment, the worse the impact on your credit score.
- Amounts owed: 30 percent
The less available credit you are using, the higher your credit score will be.
- Length of credit history: 15 percent
This refers to the average account age of your accounts and the age of your newest account, which gets younger each time you open a new account.
- New credit: 10 percent
Each time you apply for a new credit card or loan, a hard inquiry will hit your credit.
- Credit mix: 10 percent
Having several types of loans – such as a car loan, a mortgage and a credit card – can help your credit.
As you can see, the most important things you can do to improve your credit are making payments on time and making payments in full.
To view your current credit score for free and without impacting your score, click here.
Is a fair credit score good?
Simply put: No. In the FICO score, it is a below-average score. Since credit offers are based on creditworthiness, people with fair credit get below-average offers.
But if you have fair credit, all hope is not lost. While lenders typically prefer credit scores to fall in the good to excellent range, people with fair credit scores are still considered viable applicants for many loans. Additionally, with some work, persistence and responsible credit usage, you can improve your credit score.
Common ways that consumers improve their credit ratings are by contacting the major credit bureaus (Experian, Equifax and TransUnion) and asking them to remove reporting errors, paying down credit card balances and paying off accounts that have been placed in collections. Another tactic is to ask for an increased credit limit on your credit cards. For people who carry credit card balances, an increased credit limit lowers the credit-to-debt ratio, a key factor in credit scoring.
Although, credit scores can be improved in a few weeks, most improvements take months and some take years. It may take time, but paying on time, every time, and keeping credit balances low will slowly, steadily improve your credit.
By increasing your credit score, you will have access to better financial opportunities, such as lower interest rates and better credit card offers. To see what credit card offers are available to you, check out our CardMatch tool or review or list of fair credit cards and cards for those with no credit history.
Tips for getting from one credit tier to the next
If you want to improve your credit score, but can’t wait the seven years it typically takes for negative information to naturally fall off your credit, here are a few active steps you can take:
- Obtain a copy of your credit report – Request a copy of your credit report from each of the three reporting agencies: Equifax, Experian and TransUnion. Carefully review your reports for errors and file disputes over anything that does not belong to you.
- Lower your credit utilization ratio – If your credit utilization ratio – the amount you owe compared to your total available credit – is too high, it will negatively impact your credit score. To lower your ratio, you can pay down the amount you owe, or call the credit card issuers to request a higher credit limit.
- Pay off your balances – Reducing the number of active debt accounts you have is a good way to improve your credit. To accomplish this, you should choose the lowest balances and pay those off first. Once your balance is paid off, keep the card account open, but do not continue to make purchases using the cards.
- Diversify your credit – If the only type of credit on your report is credit cards, open a small installment loan to diversify your credit.
- Do not apply for several cards at the same time – Each time you apply for a new line of credit, a hard inquiry will appear on your credit report. Typically, a hard inquiry drops your credit score by five to 10 points, so you want to avoid applying for several loans within a short period of time.
- Pay your bills on time – If you miss a payment or pay your bill late, it will most likely be submitted to the reporting agencies and appear on your credit report. Therefore, it is important to pay all your bills on time, including your credit card, utilities, cable and phone bills.
How fast can credit improve?
The length of time it takes to improve your credit depends on the details of your financial situation. Along your credit behavior, your starting score is a major factor.
For example, if you have no credit history, it will take a minimum of six months to establish a credit score. Credit score formulas require an active credit account to be present for at least six months before a score is generated.
If you are repairing damaged credit, however, it can take much longer to up your score. A person who only qualifies for a secured card, for example, can generally improve to fair credit within 12 to 18 months – with responsible card usage, of course.
While some people need to repair minor infractions, others have major issues to recover from. According to VantageScore, here are the approximate lengths of time it takes to repair credit based on your actions:
|Action||Avg. Recovery Time||Credit Score Impact|
|Applying for Credit||3 months||Minor|
|Closing an Account||3 months||Minor|
|Maxing Out a Credit Card||3 months||Moderate|
|Missing Payment / Default||18 months||Significant|
If you want to improve your score quickly, here are a few steps you can follow:
Report errors on your credit reports
Regularly check your score for mistakes, such as payments marked late that you paid on time or negative information that’s too old to report. Credit bureaus are required to respond to credit disputes within 30 business days.
CreditCards.com offers a free copy of your credit report.
Do not exceed your credit limit
- People with fair credit tend to have cards with low credit limits. To keep your balances low and avoid increasing your credit utilization ratio, make small, multiple payments throughout the month.
- Pay down cards with the highest utilization first.
Because credit card issuers usually report to the bureaus each month, it shouldn’t take long for your score to reflect a lower balance.
Pay off past-due bills
Payment history has the biggest impact on your credit score. If you are behind on any bills, you should call the creditor and arrange to pay the past due amounts. After making your payments, you can request that the creditor rescind any reported delinquencies so they that will no longer show up on your credit report. While this may be the slowest step, it is essential to improving your credit score.
What can I do with a fair credit score?
Individuals with fair credit can still qualify for mortgages, car loans and some credit cards with a sufficient income. For example, many mortgages require a minimum credit score of 620. But keep in mind that with a fair credit score, you will more than likely pay a higher interest rate than if you had good or excellent credit.
If you have fair credit and want to apply for a credit card, here are a few things to consider:
- Use CreditCards.com’s CardMatch tool to get prequalified for an offer that suits you. This will also help you avoid applying for cards that may reject you – which will have a negative impact on your score.
- Instead of focusing on cards with travel rewards, cash back bonuses and other perks, go for a card designed for individuals with fair or poor credit.
- If you are unable to qualify for an unsecured card, try a secured card to help build your credit.
Once you have your card in hand, be sure to practice responsible card management. Pay your bill on time and in full each month and do not charge more than you need to.
What is the average interest rate on a credit card?
In 2018, the regular annual percentage rate (APR) for fair credit ranges from 13.24 percent to 25.24 percent. These rates are variable, which means that the lender may choose to increase or decrease them. Changes in rates are based on the Federal Reserve’s current federal fund rates.
Typical line of credit/interest rate for fair credit
If you have fair credit, you will typically pay higher interest rates on loans than if you had good to excellent credit. The amount of interest, though, depends on the type of loan and the amount you are borrowing. For example:
- Mortgage rates are usually 0.5 to 0.75 percentage points higher for a 30-year fixed-rate loan.
- Auto loans are typically 4 to 7 percentage points higher.
- Credit card interest rates are often 5 to 7 percentage points higher.
- Unsecured personal loans can be about 7 percentage points higher.
How to properly use a fair credit card
When applying for a fair or average credit card, it is important to keep the goal of improving your credit in mind. Here are a few tips on how to properly use a fair credit card:
- Use your card to build credit. The most important aspect of using a card that requires fair or average credit is that you can build your credit with it, which will grant you access to better lending products.
- Keep your utilization ratio low. By keeping your card balance low, you keep your utilization ratio low, which is your balance by your available credit.
- Look for a card without an annual fee. By taking out a card with no annual fee, you minimize the costs incurred with card membership.
- Practice with rewards. Cards for fair or average cards will sometimes have rewards, such as 1 percent back on all purchases. This is a good way to practice for getting a rewards card down the road. Make sure you don’t carry a balance, because interest charges will negate your rewards.
- Don’t close your old card. Once your credit score has risen to the point that you can apply for a better card, don’t close or stop using your card for fair credit. By continuing to use it, as least for small charges, you keep the account active, continuing to build credit with it, and you increase your available credit.
Quick comparison: best credit cards for fair/average credit
|Best For:||Credit Card||Annual Fee|
|Cash Back Variety||Discover it® Cashback Match™||None|
|No Annual Fee||Capital One® Platinum Credit Card||None|
|Flat-Rate Rewards||Capital One® QuicksilverOne® Cash Rewards Credit Card||$39|
|1% Cash Back||Credit One® Platinum Visa® Cash Back Rewards Credit Card||None|
|Fraud Coverage||Indigo® Platinum Mastercard®||$0 - $99|
|Credit Bureau Reporting||Credit One Bank® Platinum Visa® for Rebuilding Credit||$0 - $99|
|Pre-Qualification Available||Milestone® Gold Mastercard®||$35 - $99|
|Establishing Credit||Fingerhut Credit Account issued by WebBank||None|
|Growing Credit Line||Credit One Bank® Unsecured Platinum Visa®||$0 - $99|
|Mobile Account Access||Milestone® Mastercard®||$35 - $99|
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