- High Balances: Using too much of your credit limit is bad for your FICO score. So if you currently have any cards that are maxed out or close to it, a credit card for fair credit will probably be easier to get approved for.
- Late Payments: 35% of your credit score is based on payment history. Whether your payment is 1 day late or 30 days late, it’s classified as a "30 day late payment" if the issuer reports it to the credit bureaus.
- Bad Debt: Even just one bad debt or account written off will significantly bring down your credit score. It stays on your report for at least 7 years, but will have the greatest impact during the first 2-3. If this has happened to you, your credit might be classified as "fair."
- Limited Credit History: Are you relatively new to credit or have you rarely used it in the past? If so, then you probably fall under this category.
*Top Pick* Barclaycard® Rewards MasterCard®
It's almost impossible to find a major credit card for fair or limited credit history that comes with no annual fee AND a rewards program. With this one, you get both! And what makes it really blow away the competition is that they give you free access to your genuine FICO score every month through your Barclaycard account online.
- No annual fee
- Earn 2 points per $1 on gas, grocery, and utility purchases and 1 point per $1 everywhere else
- Use the points you earn like cash to pay for almost any purchases you've made.
- No blackout date, no redemption fees, no limit on the points you can earn and no complicated set up.
- Reports to all 3 major credit bureaus monthly providing you the opportunity to rebuild your credit score
- Complimentary FICO® Scores as a benefit to active cardmembers. Opt-in to have instant and convenient access to FICO® Scores from your Barclaycard online account.
Discover it® for Students
This card is for college students only. If that’s you, then keep reading! This has the same popular rewards program as the regular Discover it card, but that one requires excellent credit. With this version, the bar is set lower – it’s created for college students who have fair and limited credit history.
- Earn 5% cash back on categories that change each quarter when you signup for them. From Jan 1st thru March 31st 2014 you can get 5% at restaurants (including fast fast) and movies (both theaters and rental/streaming services) on up to $1,500 spent.
- You get 1% cash back on all other purchases.
- 0% Intro APR on purchases for 6 months, then the standard variable purchase APR of 12.99% - 21.99%.*
- No annual fee. No overlimit fee. No late fee on your first late payment.
- *Click "Apply" to see rates, rewards and other info
Capital One® QuicksilverOne℠ Cash Rewards Credit Card
Not only is this one of the best credit cards for fair credit… it’s one of the best credit cards, period! Why? Because it offers an extremely generous cash back rewards program that lets you earn an unlimited 1.5% cash back on every purchase, every day. The annual fee is $39 and the regular APR is 22.9% (V).
- Earn unlimited 1.5% cash back on every purchase, every day
- No rotating categories and no sign ups needed to earn cash rewards
- Redeem the cash back you earn for any amount, any time
- No limit to the cash back you can earn
- Your cash back doesn't expire
- 0% intro APR on purchases until November 2014
- Get access to a higher credit line after making your first 5 monthly payments on time
- Fraud Coverage if your card is ever lost or stolen
Capital One® Platinum Credit Card
This is an excellent choice for those with a limited credit history. Why? Well for starters, with this card you will get to enjoy Platinum benefits such as the extended warranty program, auto rental insurance, 24-hour travel assistance services, and more. Best of all, you get all this for a very reasonable annual fee.
- You have the option of customizing your credit card’s design. Upload your own picture or choose from one of Capital One’s designs.
- Text alerts for spending and 24/7 account access make it easy for you to manage your card.
- The annual fee is only $19 and it’s waived for the first year.
Don’t know where you stand? Then try this tool!
Are you unsure whether you have good credit, fair credit, or bad credit? If so, then try out this tool which will help you find credit cards that best match your credit profile. In three easy steps, you can check if you pre-qualify for a card without affecting your credit score.
Opening a new card and managing it responsibly is one of the best things you can do for your personal finances. Why? Because the difference between bad and good credit is like night and day. Once you build (or rebuild) a good credit history, new opportunities will await. This is because things like mortgages, car loans, and most reward cards are hard to get approved for with a mediocre or average credit rating. But once you break that barrier and achieve an excellent score, you will find those opportunities come more easily.