Building up a good credit score can take time, but the end result is rewarding. For students looking for their first independent credit card or consumers who have missed a few payments in the past, it can be tougher to get credit card applications approved. Even if you’re offered a credit card, you should always review terms carefully to look out for higher APRs than other customers pay.
But some providers offer excellent credit cards for people with average credit. And with regular, on-time payments, you can boost your score to access more credit and better rewards in the future.
Under the Hood of Credit Scores
A credit score, a three-digit number usually between 300 and 850, is a way for credit card and loan providers to interpret your borrowing history. When calculating your credit score, credit bureaus take into account whether or not you make regular and on-time payments, how much total debt you have and how many different kinds of credit you’re using.
They also factor in how long you’ve had access to credit — which can hurt the credit scores of students and other people opening accounts for the first time.
Consumers can request a free credit report once a year from the three major credit card bureaus (Equifax, Experian and TransUnion). With a good to excellent credit score, typically 700 and above, you’ll be eligible for 0% APR credit cards and potentially higher credit limits. If you have a poor credit score, usually below 620, credit card companies might be more cautious about extending credit to you based on your history. In the middle is pretty much everyone else.
Which Credit Card is the Best for Me?
Even with lower credit scores, you can still be approved for rewards and low-APR credit cards, although sometimes the banks compensate with higher interest rates. While building your financial foundation, you can earn rewards like airline travel miles or cash back that will go directly towards paying down your balances.
Use the free Fiona platform to search among top providers for their current offers, based on your credit score range. A Fiona search only triggers a soft inquiry into your credit, which won’t show up in your credit history or affect your overall score.
Get matched with personalized credit card offers for your credit score using Fiona.
Increasing Your Credit Limit
The best way to increase your credit limit is by building your credit score. Demonstrate to banks that you’re good for your line of credit by making on-time payments. Your credit score also dips if you max out your card or approach the maximum. To preserve your score, most experts recommend using 30% or less of your total available credit. For example, if you have a total available credit line of $1,000, you should only use $300, or 30% of the total available credit.
If that’s not a realistic option, make sure you’re paying off your balance in full. Some credit cards will allow you to bump your credit limit up if you make a certain number of monthly payments on time in a row — or they’ll do so automatically.
There are lots of benefits to building up your credit score: it will improve your access to personal loans, you’ll have better odds of being approved for apartments and background checks at future employers will confirm you’re the right choice for the job.
As you’re planning for your financial future, Fiona can help you find the credit cards that fit your needs and work towards reaching higher credit limits in the future. Sort and filter offers to compare their terms, find the best offers and eliminate the headaches of the application process.