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Good Credit Cards for People with “Bad” Credit

Last Updated: August 27, 2024
7 min read

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Key points about: finding a credit card if you have poor credit

  1. Secured credit cards may be an option for borrowers who don’t qualify for traditional, unsecured credit cards due to unestablished or poor credit.

  2. Secured credit cards require a security deposit equal to the approved credit limit.

  3. A secured credit card can help you build your credit with responsible use.

You might be facing an uphill battle getting a credit card if you have less than stellar credit or haven’t established a credit history. Fortunately, there are ways to get a good credit card, even with poor credit.
 
Secured credit cards cater to borrowers building or rebuilding credit history. While not everyone may qualify for a secured card, credit score requirements are usually less strict for secured vs. unsecured credit cards, which means a poor credit score may not stop you from getting approved. Let’s learn more about getting a secured card and building credit history from the ground up.

What is a “poor” credit score?

Generally speaking, a “poor” credit score refers to having a low credit score and lenders may worry you’re a risky borrower. As Experian notes, a poor credit score on the FICO® Score 8 scale is below 670.

According to FICO®, a poor credit score is a score from 300-579. A fair credit score–580-669–may also be considered low for some types of credit.

But the FICO® Score is just one credit scoring model and other companies may define scoring ranges differently. It’ll depend on what scoring model the creditor uses.

 

For instance, VantageScore defines fair credit (650-699) and poor credit (550-649) differently and even has a very poor scoring range (300-549).

What causes a low credit score?

A poor credit score is typically the result of having made late or missed payments to creditors, or maintaining a high credit card balance. If you’re new to credit, you may also have no credit history, or not enough credit activity to have a score. These are some of the categories that are weighed when your credit score is calculated.

How does a secured credit card work?

Secured credit cards differ from unsecured cards because they require a security deposit that is used as collateral. The security deposit amount is set by the credit card issuer and will typically equal your credit limit. This cash deposit acts as payment security for a credit card company in case you miss payments, which is why secured cards may have lower requirements compared to unsecured cards.

See if you're pre-approved

With no harm to your credit score3

Many credit card issuers will report your secured card account activity to the three major credit bureaus. So paying at least the minimum payment on time on your balance each month can also help you build your credit with responsible use. After you make a series of on-time payments to your secured card, you may be eligible to get your deposit back.

When can you graduate from a secured to an unsecured credit card?

It’s important to remember that a poor credit history doesn’t necessarily mean a poor credit future. Secured credit cards let you demonstrate responsible credit management, such as making timely payments and maintaining a low credit utilization (the amount of credit you’re using compared to your total available credit).

 

As you build or rebuild your credit history using a secured credit card, you may qualify to transition to an unsecured card. Keep in mind that if you graduate from a secured card, your account number, benefits, and rewards often remain the same.

Did you know?

With the Discover it® Secured Card, you can upgrade to an unsecured card after 6 consecutive on-time payments and maintaining good status on all your credit accounts.1 Discover secured cards also offer cash back rewards on every purchase.

What should you look for in a secured credit card?

Many secured credit cards come with a higher interest rate and lower credit limit than unsecured cards. But you can still make the most of your card.

 

Consider secured cards that offer rewards for eligible purchases. And look for secured credit cards with no annual fee. At Discover®, there’s no credit score required to apply2 and there’s no annual fee on any of our cards.

 

You may also want to double-check that the credit card company you choose does report payment history to the three major credit bureaus. Otherwise, your responsible credit use may not help with rebuilding your credit history.

It may seem daunting, but finding good credit cards with a poor credit history is possible with secured credit cards. As you narrow your search, be sure to review each card’s terms and conditions to find the best credit card for you.

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  1. Getting your deposit back: Monthly reviews start your seventh month as a customer. We will refund your security deposit if you have made all payments on time for the last six consecutive billing cycles on all your Discover accounts including any loans, and you've remained in "good status" on all credit accounts you are responsible for whether they are Discover accounts or not. "Good status" means: (1) your credit report shows no delinquencies, charge-offs, repossessions, or bankruptcies for the six months prior to our review; and (2) your Discover secured card is not in a prohibited status at the time of our review, including, but not limited to: closed, revoked, suspended, subject to tax levy, garnishment, deceased, lost/stolen, or fraud. Monthly reviews may be delayed if you change your payment due date. We typically process your refund in 2-3 business days based on your delivery preference. If you close your account and pay in full, we'll return your deposit within two billing cycles plus ten days.

  2. No Credit Score Required (Secured Card): Based on 2023 Discover it Secured credit card application data, applicants without a credit score may qualify. You must meet other applicable underwriting criteria. When we evaluate your creditworthiness, we consider all the information you provide on your application, your credit report, and other information. If you have a credit score, we may use that in our evaluation.

  3. There is no hard inquiry to your credit report to check if you’re pre-approved. If you’re pre-approved, and you move forward with submitting an application for the credit card, it will result in a hard inquiry which may impact your credit score. Receiving a pre-approval offer does not guarantee approval. Applicants applying without a social security number are not eligible to receive pre-approval offers. Card applicants cannot be pre-approved for the NHL Discover Card.

  4. FICO® Credit Score Terms: Your FICO® Credit Score, key factors and other credit information are based on data from TransUnion® and may be different from other credit scores and other credit information provided by different bureaus. This information is intended for and only provided to Primary account holders who have an available score. See Discover.com/FICO about the availability of your score. Your score, key factors and other credit information are available on Discover.com and cardmembers are also provided a score on statements. Customers will see up to a year of recent scores online. Discover and other lenders may use different inputs, such as FICO® Credit Scores, other credit scores and more information in credit decisions. This benefit may change or end in the future. FICO is a registered trademark of Fair Isaac Corporation in the United States and other countries.

    Discover Financial Services and Fair Isaac are not credit repair organizations as defined under federal law or state law, including the Credit Repair Organizations Act. Discover Financial Services and Fair Isaac do not provide “credit repair” services or assistance regarding “rebuilding” or “improving” your credit record, credit history or credit rating.

  • Legal Disclaimer: This site is for educational purposes and is not a substitute for professional advice. The material on this site is not intended to provide legal, investment, or financial advice and does not indicate the availability of any Discover product or service. It does not guarantee that Discover offers or endorses a product or service. For specific advice about your unique circumstances, you may wish to consult a qualified professional.