Can I Get a Credit Card With a 500 Credit Score?

If you’re just starting to build your credit or you have poor credit, you still need a credit card. Almost all shopping and bill payments are done online. So, can you get a credit card with a 500 credit score? We will discuss the answer to this question in much detail below.

Can I Get a Credit Card With a 500 Credit Score?

With a 500 credit score, it will be very difficult to get a regular credit card because a 500 credit score is considered to be poor, and most major card issuers will likely deny your credit card application as they require a fair or good credit score. That said, although you may not be able to qualify for a regular unsecured credit card, you may be able to qualify for a secured credit card.

A secured credit card works exactly the same exact way as a regular credit card, however, to get a secured credit card, you must place a security deposit with the card issuer. The security deposit you place will usually determine your credit limit.

For example, if you want a secured credit card with a $500 limit, the card issuer will require that you place a $500 security deposit at the time you apply for the credit card.

If your application for a secured credit card is approved, the card issuer will deduct the security deposit from the account you added to your credit card application. The card issuer will then keep the security deposit and only use it if you fail to pay the credit card.

However, if you make all of your payments on time, card issuers will usually return the security deposit to you within 12 to 18 months of opening your secured credit card. Also, if you have an excellent payment history, the card issuer may convert your secured credit card into a non-secured regular credit card and return your security deposit to you.

Also, if for any reason you decide to close your secured credit card, your security deposit will be returned to you so long as your credit card has a $0 balance at the time of account closure.

Credit Cards You Can Get With a 500 Credit Score

As previously mentioned, it will be extremely difficult to qualify for a regular credit card with a 500 credit score, so here is a list of secured credit cards that are suitable for someone with a 500 credit score:

  • Bank of America Secured Credit Card
  • Capital One Secured Mastercard
  • Discover it Secured Credit Card
  • OpenSky Secured Visa Credit Card
  • First Progress Secured Credit Card

How Getting a Secured Credit Card Can Help You Improve Your 500 Credit Score

Getting a secured credit card will definitely help you improve your 500 credit score because secured credit cards function the same way as does a regular credit card. As such, they can help you improve your credit whether you’re just starting off or you need to repair your credit.

That said, if you’re using a secured credit card you will be able to improve your 500 credit score much quicker than would a person who has bad credit and wants to improve it.

That said, regardless of whether you’re repairing your credit or building it from scratch, you can use a secured credit card to build your credit just as you would with a regular credit card.

So, if you’re approved for a secured credit card, make sure to spend only as much as you can afford to pay off at the end of the month and make all of your payment in full and on time.

If you’re just starting off, you should see a significant improvement within the first six months, however, if you’re repairing your credit, it will take you a little longer and you should expect an improvement within 12 to 18 months of using and paying off your credit card on time.

Improving a 500 credit score is very important if you want to qualify for credit cards and loans at reasonable interest rates and favorable repayment terms. So, use your secured credit card responsibly and make your payments on time to begin improving your credit.

What Do You Need To Open a Secured Credit Card?

If you have a 500 credit score and can’t get a regular unsecured credit card, you should open a secured credit card.

To open a secured credit card, you will need to fill out a secured credit card application by adding basic information, such as your name, address, social security number, income, and your banking information. Your banking information is required so that if you’re approved for a secured credit card, the security deposit will be deducted from the account that you provided.

That said, you should keep in mind that the security deposit that you place with the card issuer will determine your credit limit. For example, if you place a $700 security deposit, the card issuer will give you a $700 credit limit.

You should keep in mind that the security deposit will not be used as a payment on your credit card, instead, the security deposit is used to compensate the card issuer in the event that you have a balance on your credit card and you stop making payments on your account.

So, if you default on paying off the credit card, you will give up your security deposit and you will cause significant damage to your credit. So, make sure to make your payments in full and on time.

Things You Can Do To Improve Your 500 Credit Score To Get The Credit Card That You Want

If you have a 500 credit score and you want to get a regular unsecured credit card, here are some tips that you should implement to improve your credit score.

Payment History

The first thing that you should do to improve your credit score is to make all of your credit card and loan payments on time. This includes making payments on your secured credit card on time. Your payment history accounts for 35% of your credit score, so making all of your payments on time will significantly improve your credit score. Missing even a single payment can cause significant damage to your credit. So, make your payments on time and you will notice an improvement in your score.

Balances

The second thing you can to improve your 500 credit score is to pay down the balances on your accounts. Your credit utilization (how much of your available credit you’re using) accounts for 30% of your credit score. So, the more you can lower your balances, the more of an improvement in your credit score you will see. As a rule of thumb, you should keep your credit utilization between 5% to 10% but never exceed 30%. If your credit utilization exceeds 30%, you will notice a significant drop in your credit score. So, pay down your balance to improve your 500 credit score.

Application

To improve your 500 credit score to get the credit card that you want, you should avoid applying for too many credit cards and loans within a short period of time. This is so because every time you submit a credit application, a hard inquiry is added to your credit report. While a single hard inquiry will not lower your credit score by much, having too many hard inquiries on your credit report within a short period of time will significantly lower your credit score. So, avoid submitting too many applications and you should notice an improvement in your score.

Account Age

If you have old accounts that are open, you should leave them open to increase the overall age of your accounts. The average age of your accounts makes up 15% of your credit score. The older your accounts, the better your credit score will be. So, if you have an old account that you barely use and want to close, you should leave it open to avoid lowering the average age of your accounts.

Credit Report

If you’re not already in the habit of checking your credit report, you should periodically check your credit report to ensure that there is no negative information lowering your credit score. If you find negative information that does not belong to you, you should file a dispute with the credit reporting bureau reporting the incorrect information to have it removed from your credit report so that it no longer pulls down your score.

Bottom Line

At this point, it should be clear that getting a credit card with a 500 credit score will be very difficult. So, instead of applying for a regular credit card, you should apply for a secured credit card. Secured credit cards work the same way as does a regular credit card, and so they will allow you to build your credit and improve it. Once you’ve improved your credit score, you can then apply for a regular credit card.