The credit score holds one of the most important measures of financial health. It enables lenders to understand how you utilise credit and your repayment patterns. The better your credit score is, the more chances of getting loan approvals and new lines of credit.
People who qualify for top-tier credit cards were offered rewards and can get loans with the lowest interest rates. A higher credit score will help consumers gain the lowest interest rates when they borrow.
Having fair credit is normal nowadays. You may not be eligible for premium reward offering credit cards that you desire but with a fair credit score, you may have a lot of solid options available. With the right credit improvement plan, you’re in a position to qualify for more attractive reward credit cards in the future.
Fair credit score ranges from 580 to 669 for FICO Score and 601 to 660 for VantageScore
The credit scores that most credit card issuers use in the United States to predict risks are prepared by either of the two companies, FICO or Vantage Score Solutions. These credit card bureaus vary from country to country. Both have developed multiple versions of scoring systems. Most of the credit scores that lenders consider are among the range of 350 to 850. Some credit card issuers may utilise an alternative scoring range of 250 to 900.
Source: Experian
According to Experian, a fair credit score is 580 to 669 FICO Score and 601 to 660 VantageScore. When it comes to credit score performance, whether it’s excellent, good, fair or bad, every lender takes its own decision. It is similar to minimum credit score requirements. One credit card issuer may accept applications of borrowers with a fair FICO score of at least 590, while another lender might require a score of 650 or higher.
Source: Experian
Options when carrying a fair credit
If you are planning to apply for a new credit card or a loan, it is a wise decision to review your credit card report to help you compare the available credit card options. Every credit card application counts as a hard credit card inquiry which can further affect your credit score and might try to avoid unnecessary credit pulls.
If you carry a fair score and want a new credit card, here are the options:
Try and apply for credit cards with lenders that accept fair credits.
With a fair credit score, you carry a limited number of options. You probably won’t qualify for a card issuer’s most beneficial credit card offerings. Your choices might be limited, but it is possible to find the right credit card lender for your needs by reading various reviews on BankQuality.com
Some of the credit card lenders might even offer limited-time rewards and welcome bonuses if you purchase financial products. You will still need to work on your credit score if you are planning for a premium rewards credit card in the future.
Consider credit card options from credit unions.
You can opt for another potential source of credit card providers, a local or online credit union. Credit unions are non-profit financial institutions that function similarly to a bank but require membership before you can open an account, apply for loans and other financing products. In some cases, credit unions provide attractive credit cards to consumers with fair credit scores. It may be worthwhile to include credit union credit cards in your search when you compare available options.
Get an authorised user status.
Credit cards work best when they carry low-interest rates so if you don’t want to settle for a fair credit card while you are working in the direction of improving your credit score, you can consider becoming an authorised user on a family member’s existing account. This carries various plus points for your credit score. If a loved one adds you to a well-managed credit card that carries an excellent payment history, the account might help you if the card issuer asks the credit bureaus to add it to your credit report.
You can also earn a high amount of rewards if you attain the authorisation status on a family member’s credit card. Every purchase on that credit card offers you 5% cashback while you qualify for a card that only offers 2% cashback with your fair credit score. This will help you earn extra rewards and enjoy the benefits until your credit score gets in better shape.
Conclusion
A credit score carries a major impact on your financial life when you want loan products. It is a smart decision to earn the best score possible. A fair credit score provides various options such as unlimited credit card rewards and options that you can only unlock if you have improved your credit score. The process of building up a fair credit score can be achieved easily if you are consistent.