How Do I Use My Credit Score to Choose A Credit Card?
Your credit score is one of the primary factors lenders use to determine your eligibility for credit cards. Lenders may offer a variety of credit cards, each with different credit score requirements. Most credit card lenders use the FICO scoring model when approving an application for credit and assigning interest rates and terms. Therefore, it's important to know your credit score when looking for a new credit card. It will help you narrow down your list of credit card applications and limit any impact from unnecessary inquiries hitting your credit report for applications that you might not be approved for.
Your credit score is a three-digit number that lenders use to determine your creditworthiness. When you examine different credit score requirements, however, keep in mind that lenders are expecting you to fall into a certain range when you apply for a credit card. For example, if you're applying for a rewards-bearing credit card with low annual percentage rates and minimal fees, lenders may require you to have an excellent credit score of 750 or above. Or, if the issuer requires a good credit score, you may be expected to fall into a range of 700 - 749.
What's A Good Credit Score?
It may be helpful to know the range issuers are looking for when they use words like "fair credit." Under the FICO scoring model, excellent credit refers to credit scores of 750 and above, while good credit is a score between 700 - 749. Fair credit may be anything between 650 — 699, and poor credit is a score ranging from 600 - 649. Bad credit is anything below 599. Keep these ranges
in mind in terms of your own credit score when perusing applications and lender requirements. Knowing where you stand in terms of these ranges will help you narrow down your credit card search.
Determining the Right Card for You
After you have chosen a list of credit cards based on your credit eligibility, you should look at the different features of each card to determine which best falls in line with what you're looking for. If you have excellent or good credit, for example, you may be looking for a card that offers a generous rewards package. In contrast, if you have a less-than-perfect credit score and are using the credit card as a way to improve your credit standing, your focus may be less on a rewards program and more on feasible APRs and minimal fees. Keep in mind that your credit score may also be a factor in which type of credit card you apply for. For example, charge cards, which require the balance to be paid in full each cycle, are generally reserved for those with excellent credit. Secured cards, on the other hand, may help you get your credit score up to par if you have fallen on hard times and suffered credit damage as a result.
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