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What Credit Card Can I Get With a 500 Score?
Having a credit score of 500 or below can make it challenging to qualify for many credit cards. Most lenders prefer to extend credit to individuals with good or excellent credit scores, typically starting around 670. However, there are still options available for those with lower credit scores. In this article, we will discuss some credit card options you can consider if you have a 500 credit score and provide answers to frequently asked questions about low credit score credit cards.
Credit Card Options for a 500 Credit Score:
1. Secured Credit Cards:
A secured credit card requires a cash deposit as collateral. The deposit acts as your credit limit, reducing the risk for the issuer. With responsible use, these cards can help improve your credit score over time. Some popular secured credit card options include Discover it Secured, Capital One Secured Mastercard, and the OpenSky Secured Visa.
2. Store Credit Cards:
Some retail stores offer credit cards specifically designed for individuals with lower credit scores. These cards often have less stringent approval criteria. Examples include the Target REDcard, Walmart Credit Card, and the Amazon Store Card. However, these cards can have high interest rates and limited acceptance outside the issuing store.
3. Credit Builder Loans:
While not a credit card, a credit builder loan can help improve your credit score. These loans are typically offered by credit unions and online lenders. The lender places your loan amount into a savings account, which you can access after repaying the loan. On-time payments are reported to the credit bureaus, helping to establish or rebuild credit history.
4. Subprime Credit Cards:
Subprime credit cards are specifically designed for individuals with low credit scores. These cards often carry high fees and interest rates, but they can be a stepping stone to improve your credit if used responsibly. Examples include the Credit One Bank Visa and the Indigo Platinum Mastercard.
FAQs about Credit Cards for a 500 Credit Score:
Q: Will applying for a credit card with a 500 credit score hurt my credit further?
A: Applying for a credit card may result in a hard inquiry on your credit report, which can temporarily lower your credit score. However, responsible use of the card can help improve your credit over time.
Q: Can I get a credit card with a 500 credit score and no deposit?
A: It is challenging to qualify for an unsecured credit card with a 500 credit score. Most lenders prefer higher credit scores to mitigate the risk of default.
Q: How long does it take to improve a credit score of 500?
A: Improving a credit score takes time and consistent positive credit behavior. With responsible use, you may see improvements within six to 12 months.
Q: Can I upgrade my secured credit card to an unsecured card?
A: Some secured credit card issuers may offer the option to upgrade to an unsecured card after a certain period of responsible use. Contact your card issuer to inquire about this possibility.
Q: What are some tips for rebuilding credit with a 500 score?
A: Paying bills on time, keeping credit utilization low, and avoiding new debt can help improve your credit score. Additionally, regularly reviewing your credit report for errors is essential.
In conclusion, having a 500 credit score limits your credit card options, but there are still possibilities available. Consider secured credit cards, store credit cards, credit builder loans, or subprime credit cards to start rebuilding your credit. Remember to use these credit cards responsibly and make timely payments to improve your credit score over time.
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