According to TransUnion, the total number of consumers that own a credit card account reached 166 million in the fourth quarter of 2022 . That accounts for an increase of over 13 million over the last three years . Even with that many credit cards in circulation, though, not everyone can get one.
Why can’t you get a credit card? It may have to do with your credit score. A lower credit score can lead to fewer financial opportunities. Keep reading to learn what credit score you need to qualify for a credit card and how you can build credit to get better opportunities.
What Credit Score Do You Need for a Credit Card?
If you can’t get a credit card, it could be for a number of reasons, such as if you don’t have proof of income. Credit card companies want to know you have regular income and the ability to pay off any balances you incur. Another common reason you can’t get a credit card is because you don’t meet the credit requirements.
There isn’t a specific minimum credit score that gains you entrance into the credit card kingdom. Every credit card has its own requirements. Typically, credit cards with more perks, higher credit limits and better interest rates have higher credit score requirements. Cards for those with lower credit tend to have fewer benefits.
Unsecured credit cards usually need higher overall credit scores than secured credit cards. Secured credit cards require you to put up some money as a deposit to secure your credit limit.
The average FICO® score in the U.S. is around 714. Good credit is typically considered anything above 670. If your score falls below that, you may find it difficult to get a credit card with great interest rates or benefits. And if you fall too far below it, you may find you can’t get a credit card at all or are limited to secure credit cards.
3 Ways to Build Credit with Low to No Credit History
You can start building your credit in other ways. Once you boost your score, you may have a better chance of getting approved for the card you want.
Get a Credit Builder Loan
Credit builder loans aren’t really loans you use to get funds you need right now. They’re secure loans that let you demonstrate you can manage credit and payments well, which can boost your credit score.
One option is LOQBOX. With this option, you buy a savings voucher. The money you pay for it is deposited in a “lockbox”, and you’re given a “loan” for the amount.
You pay off the loan over a year and the lockbox is opened, giving you access to the money in the savings account. Your timely payments are reported to the credit bureaus, helping increase your payment history and, hopefully, your score. Another similar option is CreditStrong, which offers a number of plans to help people build credit.
Report Rent and Utility Payments
Unfortunately, landlords and utility companies don’t usually report your payments to the credit bureaus. That means you’re not getting credit for making regular payments every month on some of your biggest expenses. When you sign up for ExtraCredit, you can use the Build It feature to get these items reported on your credit reports. That way, you can build payment history by demonstrating that you responsibly pay a number of bills every month.
Become an Authorized User
If you have a trusted friend or family member with a credit card account in good standing, you might ask them if you can be added as an authorized user. For this to work, the credit card company has to report account and payment information to the credit bureaus for the authorized user too, so double-check before you go through the trouble. You also need to ensure the primary account holder pays their statement on time every month and doesn’t run up balances to create high credit utilization. Otherwise, getting the account on your credit report could be a negative rather than a positive.
Want more great tips and information on building your credit? Sign up for ExtraCredit today. You’ll get five great features to help you build and protect your credit, including:
- Build It, which lets you report rent and utility payments to the credit bureaus
- Guard It, which provides identity theft monitoring and protection
- Track It, which gives you access to 28 of your FICO scores
- Reward It, which has cash back rewards for completing offers
- Restore It, which provides discounts for credit repair service
The Bottom Line
Being denied a credit card can be a bummer. But that denial doesn’t have to be a roadblock on your journey to build credit. Look at all your options, starting with some of those listed above, to find credit-building tools that work for you. Then, put in the work to make good financial and money management decisions to build your credit in the future.
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