Do you have fair credit? There is no “official” definition or score for this category, but here are some scenarios that typically go hand in hand...- Occasional Late Payment: 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 reported to the credit bureaus. Some creditors report every late payment, while others only report if it’s a repeated problem or a payment is more than 30 days late.
- Carrying High Balances: Did you know that using too much of your credit limit can hurt your FICO score? Using more than 30% of a card’s spending limit may decrease your score. So if you currently have any credit cards that are maxed out or close to it, a credit card for fair credit will probably be easier to get approved for.
- Bad Debt: Unfortunately, even just one bad debt or account written off will significantly bring down your credit score. It stays on your credit report for at least seven years, but will have the greatest impact during the first 2-3 years. If this has happened to you within the last few years or so, then your credit might currently be classified as "fair."
- Limited Credit History: Are you relatively new to using credit or have you rarely used it in the past? If so, then starting out with one of these credit cards is often the best route.
For college students
If the reason you have a fair credit score is because you're in school and have a limited history, then by far your best bet will be student cards. They are designed for young adults with fair to no credit history. Fortunately, most of them don't charge an annual fee and some even come with rewards. You can compare student credit cards here.
For credit scores below 650
Ever since the "Great Recession" banks tend to shy away from customers in this range. If you fall into this category, an option you have is to build your credit using a secured credit card.