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Should You Apply for Credit Cards Based on Your Credit Score?

Credit Card Basics, Credit Cards
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Should You Apply for Credit Cards Based on Your Credit Score?

When you apply for a credit card based on your credit score, you’ll have a much better chance of having your application approved. But first you have to actually know what your credit score is.

You can access your credit report for free once a year from each of the free credit bureaus: Equifax, Experian and TransUnion. You credit report is based on whether you’ve paid debts on time, your current amount of debt, late or missed payments, loans you’ve paid off and more.

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Your FICO credit score (which stands for Fair, Isaac and Co.) is calculated using information from your credit report. Credit card agencies use your FICO score, or its competitor, the VantageScore, to decide whether to give you a credit card.

Your FICO score won’t be on your credit report, but you can access it for a small fee. Both FICO and VantageScore credit scores range from 300 to 850. Card issuers use these score ranges in sorting credit card applicants:

  • Bad credit: Below 630
  • Fair credit: 630-689
  • Good credit: 690-719
  • Excellent credit: 720-850

Certain credit cards require a range of scores. For example, if you have a score of 680, that’s considered just a “fair” credit score. If you apply for a credit card that requires a minimum “good” credit score then you will likely be denied.

It’s true that the higher your score, the better options you’ll have when you want to apply for a credit card. However, even if you have a decent score, you can still be denied for a credit card if you have high month-to-month debt or if you’ve missed payments. Credit card companies take into account a person’s entire credit picture when they choose which applications to approve or deny.

Getting your credit card application approved lies in choosing the right ones to apply for. For people with bad credit, this could mean opting for a secured card. This kind of card requires a cash deposit as collateral. If you deposit $800, for example, your credit limit will be up to $800. In addition to the minimum deposit, you’ll also likely face an annual fee. Once you’re able to start building credit and nudge your credit score higher, you can close your account and get that deposit back.

Also keep in mind that if you have a lower credit score but decide to apply for cards you know won’t qualify for “just to give it a shot,” you run the risk of negatively affecting your score. Recent credit inquiries play a part in computing credit scores (though checking your own credit doesn’t affect your score). So, the more companies that look into your credit report and the more denials you receive, the lower your score will be.

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