Q: Dear CreditCardGuru, I’ve been reading a lot of your posts and love your advice but the problem is that I think my credit score is too low to qualify for your recommendations. For a 600 credit score what credit cards are best? (I have a 650 credit score from Experian and 640 from Equifax)
A: Your FICO score is very important but it isn’t the only thing that a lender will look at when deciding whether to approve an application along with how much credit to grant. It certainly carries a lot of weight, don’t get me wrong, but how it is derived in your case can carry even more influence. Having a 650 score because of little credit history is viewed much more favorably than someone who has a 650 score due to prior charged off debt, an old bankruptcy, etc. So, having a clean slate, so to speak, is far better than having a track record of late payments, defaults or declaring bankruptcy.
Whether you have a 600, 650, or even a 680 credit score doesn’t really matter… because unfortunately those all are considered sub-prime numbers, believe it or not. To get approved for the best credit card deals you typically need a score in the mid-700’s. In the past banks were more lenient, but not anymore.
Secured or unsecured?
Being in the mid-600’s you are right on the cusp of what qualifies for unsecured versus secured credit cards. For secured, you will have to put up a deposit ranging from $200 to thousands (you choose the amount) and that becomes your credit limit. Many are alarmed when they hear this but don’t worry, that deposit is refundable you close the account in the future (assuming you don’t owe money when it’s closed).
For which type will you qualify? There’s no way to know until you try applying. But don’t misinterpret that the wrong way – you should not apply for credit cards until you get approved. Every application you submit results in a credit inquiry and having too many of those isn’t good for your score. So the last thing you want to do is make you score worse by having a ton of new inquiries made!
The best credit cards for a 600 credit score range are probably those which are specifically designed for those just starting out in the credit world and those who only have “fair” credit scores (and not those for good or excellent credit. Want examples? Here are our top recommendations for 2016.
Once you get a credit card, make sure you use it responsibly – as in always pay at least the minimum amount due (and preferably the entire outstanding balance) on time and never use more than about one third of your credit limit (later on it’s important to follow this advice on any individual card or in total across all your cards). After 9 – 12 months, it’s a good idea to your credit score again to determine where you stand. Hopefully by then you will be in a position to qualify for an even better unsecured credit card.
Sidenote: The reason you had a 650 credit score on one report and a 640 on another is due to the fact that each credit bureau utilizes different data and algorithms to calculate their credit score. Usually the information across all three credit reporting agencies is the same but sometimes, a given bureau’s info may differ slightly (perhaps it hasn’t picked up recent information from one or both of the others). However, anything in the mid-600s will be viewed as more or less the same, so don’t fret over the minute difference.
This post was written or last updated February 1, 2016