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

Whether you’re just starting to build your credit or you have a bad credit score, such as a 500 credit score, you might be wondering whether you can get a secured credit card with a 500 credit score? We will answer this question in much detail below.

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

Yes, you may be able to get a secured credit card with a 500 credit score because card issuers know that consumers with bad credit still need a credit card, as such, they offer consumers the ability to obtain secured credit cards where the risk to the card issuer is reduced by having you place a security deposit with the card issuer.

Secured credit cards are different from regular unsecured credit cards in that to obtain a secured credit card, you must place a deposit with the card issuer. The security deposit then determines your credit limit.

For example, if you place a $700 security deposit, the card issuer will give you a credit card with a $700 credit limit. Usually, card issuers will give you back your security within 12 to 18 months if you use your secured credit card responsibly and make your payments on time.

However, if you default on making payments on your secured credit card or you want to close the account while the card has a balance on it, the card issuer will use the security deposit to pay off your outstanding balance. The remainder of the security deposit, if any, will be returned to you.

If you have a 500 credit score, getting an unsecured credit card will be very difficult because your credit score is in the bad category. Lenders will see you as extremely risky to lend money to. As such, if you have a 500 credit score, your best option is to apply for and obtain a secured credit card. By paying a deposit, you represent a lower risk to the card issuer, and so they are more likely to allow you to borrow money from them.

When it comes to building and improving your credit, a secured credit card will allow you to build your credit just as would a regular unsecured credit card. This is so because your secured account status is reported to the credit reporting bureaus, so making your payments on time will help your credit score.

Can You Improve Your 500 Credit Score With a Secured Credit Card?

Absolutely, yes. Opening a secured credit card is one of the best ways for those who do not have credit and those who have bad credit to improve their credit. This is so because a secured credit card works the same way as does a regular unsecured credit card.

So, if you open a secured credit card and you make your payments on time, this information will be reported to the credit reporting bureaus, improving your credit score.

Those with no credit will be able to improve their credit score much more quickly than someone with bad credit. This is so because a person with no credit does not have any negative information on his credit report to drag down his or her credit score.

Nevertheless, secured credit cards are a great tool for consumers who want to build their credit from scratch or improve their bad credit.

So, if you want to improve your 500 credit score and you’ve been denied a regular unsecured credit card, you should explore the option of applying for a secured credit card to improve your credit.

How to Get a Secured Credit Card?

To get a secured credit card, you should first find a secured credit card, such as the Bank of America Secured Visa Credit Card or the Discover It Secured Credit Card. You should then submit your credit application online or by visiting one of the card issuers branches.

When you go to the secured credit card application, you will have to provide personal information, such as your name, date of birth, social security number, employment status, and income. Additionally, you will have to provide a security deposit to obtain the card.

Providing a security deposit is done by either giving the card issuer cash if you’re applying in person or by providing your checking account information if you’re applying online.

If you’re approved, your security deposit will be deducted from your checking account, and your secured credit card will be mailed to you.

What Are the Best Secured Credit Cards For Someone With a 500 Credit Score?

If you have a 500 credit score, here are some of the best secured credit cards that you can apply for today.

  • Bank of America Secured Visa Credit Card – The Bank of America Secured Visa Credit Card is a great option for someone who wants a simple and straightforward credit card. This card comes with a $0 annual fee and you can deposit a security deposit of up to $4,900 for a $4,900 credit limit. The minimum deposit amount is $300 for a $300 credit limit. Also, the card comes with the ability to make contactless payments by tapping your credit card to pay. Unfortunately, this card does not come with any rewards, making it great for someone who wants a straightforward secured credit card with no annual fee.

  • Discover It Secured Credit Card – The Discover It Secured Credit Card is a great secured credit card that comes with a $0 annual fee. The great thing about this credit card is that it’s one of the few secured cards that offer rewards. You can earn 1% cashback on all purchases, and 2% cashback on restaurant and gas station purchases. If you’re approved for this credit card, you will be granted access to check your credit score for free.

  • Capital One Secured Mastercard Credit Card – The Capital One Secured Credit is a great option for someone who wants a simple credit card with a $0 annual fee. This card does not offer rewards but can be had for as little as a $49 security deposit that will unlock a $200 credit limit. You can increase your security deposit for a higher credit limit. The page for this credit card also states that every 6 months your account will be reviewed by Capital One. If you’ve used your card responsibly and you’ve made your payments on time, Capital One will consider raising your credit limit without you having to increase your security deposit.

  • First Progress Secured Credit Card – The First Progress Secured Credit Card comes with a $49 annual fee, however, the card more than makes up for it with an ultra low-interest rate of 9.99%. The other secured credit cards that we have included all come with a high-interest rate that ranges from 22.99% to 24.99%. So, if you’re looking for a card with a low-interest rate, this card is the right one for you. The great thing about this card is that no minimum credit score is required, so whether you’re just starting to build credit or you want to improve your bad credit, this is the right card for you.

How To Improve Your 500 Credit Score?

If you aren’t approved for a regular unsecured credit card because you have a 500 credit score, there are a number of things that you can do to improve your 500 credit score.

Payments

The best thing that you can do to improve your 500 credit score is to make all of your credit card and loan payments on time. This is so because your payment history makes up 25% of your credit score. So, making your payments on time should boost your credit score.

Credit Utilization

The second best thing you can do to improve your credit score is to reduce the balances on your accounts. This is so because 20% of your credit score depends on the amount of your avaialble credit that you’re using. The higher your balances, the lower your credit score will be. As a rule of thumb, you should strive to keep your credit utilization between 5% and 10% and to never use more than 30% of your available credit. Reducing your account balances may boost your credit score.

Reduce Applications

To improve your 500 credit score, you should refrain from submitting too many credit card and loan applications within a short period of time. This is so because every time you apply for a credit card or a loan, a hard inquiry is placed on your credit report. Although a single hard inquiry will only lower your credit score by 5 to 10 points, racking up too many hard inquiries can significantly reduce your credit score. So, to improve your credit, avoid applying for unnecessary credit cards and loans.

Keep Old Accounts Open

To improve your 500 credit score, you should keep your old accounts open. This is so because your overall average account age affects your credit score. The older your accounts, the better your credit score will be. So, although it may be tempting to close an old account or credit card, you should keep it open to improve your credit.

Check Your Credit Report

If you’re not already in the habit of checking your credit report, you should periodically check your credit report. You can do this by signing up for any of the free credit report services currently available. Review your credit report and dispute any inaccurate items that appear on your credit report to improve your credit score.

Credit Score Planet Frequently Asked Questions (FAQs)

1. What is the Difference Between a Secured vs Unsecured Credit Card?

The only difference between a secured vs unsecured credit card is that a secured credit card requires you to place a security deposit with the card issuer before your credit card account is opened for you. Other than that, a secured credit card functions the same exact way as does a regular credit card

2. Can I get a regular credit card with a 500 credit score?

You may be able to get a regular credit card with a 500 credit score, however, it will be very difficult to get approved with such a low credit score. A 500 credit score is considered as very poor, so most card issuer will probably deny you if you apply for one.

3. How fast can you build credit with a secured credit card?

If you’re just starting to build your credit, you can build credit with a secured credit card in as little as 6 months, however, if you’re fixing your bad credit, it may take longer to improve your credit score. Some consumers have reported being able to improve their bad credit within as little as 12 to 18 months after opening and making timely payments on their secured credit card.

4. What is the minimum credit score for a secured credit card?

There is no set minimum credit score for a secured credit card. Card issuers offering secured cards know that consumers who apply for these cards are either starting off or have bad credit. As such, so long as you have the money for the security deposit, you should be approved for a secured credit card.