What FICO Score is Considered Fair Credit?

Average credit may be nothing to write home about, but you’re definitely in a better place than those with bad or no credit. Understanding how credit scores work and how to take yours from fair to good could open up new opportunities and lower rates for you down the road.

Your FICO score is a number that sums up your creditworthiness. It is a snapshot of your current credit standings and is used by banks in determining whether you’re worthy of a credit card and if so, which type.

Under the FICO scoring system, anything less than 630 is considered “bad credit,” a score from 630 to 689 is considered “fair,” 690 to 719 is a “good” credit score, and 720 to 850 is “excellent.”

As someone with a credit score between 630 and 689, you likely receive credit card offers for fair credit including cards with moderate interest rates and fees. You are still blocked from many of the premium cards with the best rewards offers, however. Gaining access to those cards would take good to excellent credit.

Moving your score up the ranks takes time and concentrated effort, but it doesn’t have to be difficult.

Your credit score is determined from a combination of your payment history, your credit utilization, new credit, the types of credit used and the length of your credit history. By paying attention to how your actions impact these factors, you can move out of the “fair” range and into good credit territory.

Some quick tips on increasing your credit score:

Always make your payments on time.

One late or missed payment can blemish your credit score. Automate your monthly payments, set reminders or take steps to ensure no due dates slip by unnoticed.

Limit new credit applications.

The more you ask for additional credit, the more likely those inquiries will hurt your credit score.

Track your credit score and review your credit report for errors.

Knowing where you stand will help you gauge how your efforts are paying off. Also, if you find errors on your credit report, getting them corrected could immediately raise your score.

Budget and use your credit wisely.

Don’t use your credit card to purchase things you can’t afford. Your credit cards aren’t an exception to your budget; they are part of it.

Fair credit isn’t a bad thing. You’re doing better than many people out there. But there’s certainly room for improvement. Moving your credit from fair to good could translate to better loan terms when you’re ready to purchase a home and better credit card offers from the banks.

---

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Why Am I Getting Bad Credit Credit Card Offers?

Most people receive credit card offers in the mail on a regular basis. But what if it slowly dawns on you that some of the offers in your mailbox are credit card deals for people with bad credit?

Don’t take it personally. If you’ve ever received invitations to join AARP even though you’re only 27, or coupons for a store that specializes in petite clothing even though you’re 5 foot 11, you know that advertisers don’t always get things exactly right.

But it’s possible that a credit card for people with poor credit may actually be right for you. For example, people with no credit history at all often have a hard time when applying for traditional credit cards. And with a run of unemployment or general bad luck, it’s lamentably easy for credit scores to dip below 630, which means you’re in low credit score territory.

If that’s the case, there’s no shame in applying for one of the major credit cards that caters to people with bad credit.

Bad credit credit cards differ from regular cards in a few key ways. They may be secured credit cards, meaning that you have to pay a refundable deposit to show the bank that you are serious about paying back what you borrow. They may have higher interest rates than cards available to people with stronger scores, and the rewards you’re offered may not be as juicy.

But these may be the best credit cards to apply for in your particular situation. Getting a credit card and being careful to pay the bills on time will go a long way toward rebuilding your score, which is crucial if you want to get ahead financially. Better credit isn’t just about being able to get the very best credit cards or even a mortgage. It also makes it easier to find a landlord willing to rent to you, get a better job and get car insurance.

And let’s face it: If you’ve contacted a bankruptcy lawyer recently, or have otherwise tipped credit card companies off that you may need to rebuild your credit, you may be receiving those particular offers for a good reason — because those cards are right for you.

The important thing is that you learn to use credit responsibly, build up your score and start paying down debt and saving a cash cushion so you’ll be able to ride out the next wave of unexpected financial challenges you encounter.

There’s no shame in needing to rebuild your finances. In fact, you should be proud of yourself for taking the necessary steps to provide financial security to yourself and the people you care about — even if that means applying for a credit card for people with poor credit.

---

Bad credit illustration via Shutterstock.

The post Why Am I Getting Bad Credit Credit Card Offers? appeared first on NerdWallet Credit Card Blog.

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What FICO Score is Considered Fair Credit?

Average credit may be nothing to write home about, but you’re definitely in a better place than those with bad or no credit. Understanding how credit scores work and how to take yours from fair to good could open up new opportunities and lower rates for you down the road.

Your FICO score is a number that sums up your creditworthiness. It is a snapshot of your current credit standings and is used by banks in determining whether you’re worthy of a credit card and if so, which type.

Under the FICO scoring system, anything less than 630 is considered “bad credit,” a score from 630 to 689 is considered “fair,” 690 to 719 is a “good” credit score, and 720 to 850 is “excellent.”

As someone with a credit score between 630 and 689, you likely receive credit card offers for fair credit including cards with moderate interest rates and fees. You are still blocked from many of the premium cards with the best rewards offers, however. Gaining access to those cards would take good to excellent credit.

Moving your score up the ranks takes time and concentrated effort, but it doesn’t have to be difficult.

Your credit score is determined from a combination of your payment history, your credit utilization, new credit, the types of credit used and the length of your credit history. By paying attention to how your actions impact these factors, you can move out of the “fair” range and into good credit territory.

Some quick tips on increasing your credit score:

Always make your payments on time.

One late or missed payment can blemish your credit score. Automate your monthly payments, set reminders or take steps to ensure no due dates slip by unnoticed.

Limit new credit applications.

The more you ask for additional credit, the more likely those inquiries will hurt your credit score.

Track your credit score and review your credit report for errors.

Knowing where you stand will help you gauge how your efforts are paying off. Also, if you find errors on your credit report, getting them corrected could immediately raise your score.

Budget and use your credit wisely.

Don’t use your credit card to purchase things you can’t afford. Your credit cards aren’t an exception to your budget; they are part of it.

Fair credit isn’t a bad thing. You’re doing better than many people out there. But there’s certainly room for improvement. Moving your credit from fair to good could translate to better loan terms when you’re ready to purchase a home and better credit card offers from the banks.

---

Image via iStock.

The post What FICO Score is Considered Fair Credit? appeared first on NerdWallet Credit Card Blog.

Source Article http://ift.tt/1y39EC7

Read More

Why Am I Getting Bad Credit Credit Card Offers?

Most people receive credit card offers in the mail on a regular basis. But what if it slowly dawns on you that some of the offers in your mailbox are credit card deals for people with bad credit?

Don’t take it personally. If you’ve ever received invitations to join AARP even though you’re only 27, or coupons for a store that specializes in petite clothing even though you’re 5 foot 11, you know that advertisers don’t always get things exactly right.

But it’s possible that a credit card for people with poor credit may actually be right for you. For example, people with no credit history at all often have a hard time when applying for traditional credit cards. And with a run of unemployment or general bad luck, it’s lamentably easy for credit scores to dip below 630, which means you’re in low credit score territory.

If that’s the case, there’s no shame in applying for one of the major credit cards that caters to people with bad credit.

Bad credit credit cards differ from regular cards in a few key ways. They may be secured credit cards, meaning that you have to pay a refundable deposit to show the bank that you are serious about paying back what you borrow. They may have higher interest rates than cards available to people with stronger scores, and the rewards you’re offered may not be as juicy.

But these may be the best credit cards to apply for in your particular situation. Getting a credit card and being careful to pay the bills on time will go a long way toward rebuilding your score, which is crucial if you want to get ahead financially. Better credit isn’t just about being able to get the very best credit cards or even a mortgage. It also makes it easier to find a landlord willing to rent to you, get a better job and get car insurance.

And let’s face it: If you’ve contacted a bankruptcy lawyer recently, or have otherwise tipped credit card companies off that you may need to rebuild your credit, you may be receiving those particular offers for a good reason — because those cards are right for you.

The important thing is that you learn to use credit responsibly, build up your score and start paying down debt and saving a cash cushion so you’ll be able to ride out the next wave of unexpected financial challenges you encounter.

There’s no shame in needing to rebuild your finances. In fact, you should be proud of yourself for taking the necessary steps to provide financial security to yourself and the people you care about — even if that means applying for a credit card for people with poor credit.

---

Bad credit illustration via Shutterstock.

The post Why Am I Getting Bad Credit Credit Card Offers? appeared first on NerdWallet Credit Card Blog.

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Best Credit Card Offers for Entertainment

If hanging around the house isn’t how you typically spend your time, you’ll need a credit card that offers great entertainment benefits. But with all the credit card deals on the market these days, you might be having a hard time choosing the one that’s right for you.

But don’t worry – the Nerds are here to help. Here are the 3 best credit cards to apply for if you enjoy painting the town red:

Best overall: Citi ThankYou® Preferred Card — Earn 20,000 Bonus Points

Apply Now

on Citibank's

secure website

For earning extra rewards on all your leisure spending, the Citi ThankYou® Preferred Card — Earn 20,000 Bonus Points is the only card you need. With it, you’ll earn 2 ThankYou points per dollar spent on entertainment and dining out and 1 ThankYou point per dollar spent on all other purchases.

Wondering what constitutes “entertainment”? Everything from amusement parks to concert tickets to cultural events – no matter what you’re into, you’ll be earning extra rewards with the Citi ThankYou® Preferred Card — Earn 20,000 Bonus Points.

When it comes time to cash in your ThankYou points, you’ll have a wide range of options to choose from. But the Nerds recommend sticking to gift cards and cash equivalents so that you’ll be getting the most bang out of every point.

Also keep in mind that the Citi ThankYou® Preferred Card — Earn 20,000 Bonus Points gives you entrée to Citi Private Pass, a feature that hooks you up with access to exclusive events. This is just one more reason the Citi ThankYou® Preferred Card — Earn 20,000 Bonus Points is one of the best cards out there for your entertainment needs.

To get you started, the Citi ThankYou® Preferred Card — Earn 20,000 Bonus Points provides a decent signup bonus: Earn 20,000 bonus ThankYou® Points after $1,500 in card purchases within 3 months of account opening - redeemable for $200 in gift cards or other great rewards. And since it charges an annual fee of $0*, you can rock on without shelling out any extra cash.

Best if you like to hang with friends at bars: Chase Sapphire Preferred® Card

Apply Now

on Chase's

secure website

If meeting pals for happy hour or catching a game at the bar on Saturday afternoon is your favorite form of entertainment, be sure to bring the Chase Sapphire Preferred® Card along. With it, you’ll earn 2 points for every dollar spent on travel and dining out and 1 point per dollar spent on all other purchases.

Generally, points earned with the Chase Sapphire Preferred® Card are worth $.01 apiece. But if you cash them in for travel through Chase Ultimate Rewards, their value goes up by 25% each. This means that, if you choose this redemption option, you’re effectively earning 2.5% on your dining out dollars. (You’ll also have the option to transfer your points to participating frequent traveler programs at a 1:1 ratio when you’re ready to redeem them.)

And remember: Bars are usually coded as restaurants on your credit card statement, so you can expect to be earning sky-high rewards on every beer you buy.

If you enjoy traveling and go overseas frequently, think about packing the Chase Sapphire Preferred® Card in your carry-on. It comes chip-enabled and charges no foreign transaction fees.

Looking for a stellar signup bonus? The Chase Sapphire Preferred® Card won’t let you down. You’ll Earn 40,000 bonus points after you spend $4,000 in the first 3 months. The card does charge an Introductory Annual Fee of $0 the first year, then $95. But most barflies will get enough value out of the rewards rate to justify this expense.

Best if you prefer to entertain at home: Blue Cash Preferred® Card from American Express

Apply Now

on American Express's

secure website

If you’ve elevated entertaining at home to an art form, you’ll want to keep the Blue Cash Preferred® Card from American Express close at hand. With it, you’ll earn 6% cash back on every dollar spent on groceries, up to $6,000 spent per year. You’ll also earn unlimited 3% cash back at gas stations and select department stores, and 1% cash back on all other purchases.

Because throwing a party usually involves buying a lot of food and drinks, you could end up cashing in big with the Blue Cash Preferred® Card from American Express when you prep for your favorite pastime. We can’t think of another card that offers a rewards rate this high at the grocery store, so taking advantage of it is a smart idea.

To sweeten the deal a bit, the Blue Cash Preferred® Card from American Express provides a signup bonus: Get 100 Reward Dollars, redeemable for a $100 statement credit, after you make $1,000 in purchases with your new Card in the first three months. Plus, get one year of Amazon Prime after you sign up for a new membership with your Card and meet the spending requirement in the same time period.

The Blue Cash Preferred® Card from American Express does charge an annual fee of $75. But as long as you’re spending at least $27 per week at the grocery store, this cost is offset by the card’s high rewards rate. Party on!

Image via iStock.

The post Best Credit Card Offers for Entertainment appeared first on NerdWallet Credit Card Blog.

Source Article :http://bit.ly/16wgfMT

Read More

Best Credit Card Offers for Entertainment

If hanging around the house isn’t how you typically spend your time, you’ll need a credit card that offers great entertainment benefits. But with all the credit card deals on the market these days, you might be having a hard time choosing the one that’s right for you.

But don’t worry – the Nerds are here to help. Here are the 3 best credit cards to apply for if you enjoy painting the town red:

Best overall: Citi ThankYou® Preferred Card — Earn 20,000 Bonus Points

Apply Now

on Citibank's

secure website

For earning extra rewards on all your leisure spending, the Citi ThankYou® Preferred Card — Earn 20,000 Bonus Points is the only card you need. With it, you’ll earn 2 ThankYou points per dollar spent on entertainment and dining out and 1 ThankYou point per dollar spent on all other purchases.

Wondering what constitutes “entertainment”? Everything from amusement parks to concert tickets to cultural events – no matter what you’re into, you’ll be earning extra rewards with the Citi ThankYou® Preferred Card — Earn 20,000 Bonus Points.

When it comes time to cash in your ThankYou points, you’ll have a wide range of options to choose from. But the Nerds recommend sticking to gift cards and cash equivalents so that you’ll be getting the most bang out of every point.

Also keep in mind that the Citi ThankYou® Preferred Card — Earn 20,000 Bonus Points gives you entrée to Citi Private Pass, a feature that hooks you up with access to exclusive events. This is just one more reason the Citi ThankYou® Preferred Card — Earn 20,000 Bonus Points is one of the best cards out there for your entertainment needs.

To get you started, the Citi ThankYou® Preferred Card — Earn 20,000 Bonus Points provides a decent signup bonus: Earn 20,000 bonus ThankYou® Points after $1,500 in card purchases within 3 months of account opening - redeemable for $200 in gift cards or other great rewards. And since it charges an annual fee of $0*, you can rock on without shelling out any extra cash.

Best if you like to hang with friends at bars: Chase Sapphire Preferred® Card

Apply Now

on Chase's

secure website

If meeting pals for happy hour or catching a game at the bar on Saturday afternoon is your favorite form of entertainment, be sure to bring the Chase Sapphire Preferred® Card along. With it, you’ll earn 2 points for every dollar spent on travel and dining out and 1 point per dollar spent on all other purchases.

Generally, points earned with the Chase Sapphire Preferred® Card are worth $.01 apiece. But if you cash them in for travel through Chase Ultimate Rewards, their value goes up by 25% each. This means that, if you choose this redemption option, you’re effectively earning 2.5% on your dining out dollars. (You’ll also have the option to transfer your points to participating frequent traveler programs at a 1:1 ratio when you’re ready to redeem them.)

And remember: Bars are usually coded as restaurants on your credit card statement, so you can expect to be earning sky-high rewards on every beer you buy.

If you enjoy traveling and go overseas frequently, think about packing the Chase Sapphire Preferred® Card in your carry-on. It comes chip-enabled and charges no foreign transaction fees.

Looking for a stellar signup bonus? The Chase Sapphire Preferred® Card won’t let you down. You’ll Earn 40,000 bonus points after you spend $4,000 in the first 3 months. The card does charge an Introductory Annual Fee of $0 the first year, then $95. But most barflies will get enough value out of the rewards rate to justify this expense.

Best if you prefer to entertain at home: Blue Cash Preferred® Card from American Express

Apply Now

on American Express's

secure website

If you’ve elevated entertaining at home to an art form, you’ll want to keep the Blue Cash Preferred® Card from American Express close at hand. With it, you’ll earn 6% cash back on every dollar spent on groceries, up to $6,000 spent per year. You’ll also earn unlimited 3% cash back at gas stations and select department stores, and 1% cash back on all other purchases.

Because throwing a party usually involves buying a lot of food and drinks, you could end up cashing in big with the Blue Cash Preferred® Card from American Express when you prep for your favorite pastime. We can’t think of another card that offers a rewards rate this high at the grocery store, so taking advantage of it is a smart idea.

To sweeten the deal a bit, the Blue Cash Preferred® Card from American Express provides a signup bonus: Get 100 Reward Dollars, redeemable for a $100 statement credit, after you make $1,000 in purchases with your new Card in the first three months. Plus, get one year of Amazon Prime after you sign up for a new membership with your Card and meet the spending requirement in the same time period.

The Blue Cash Preferred® Card from American Express does charge an annual fee of $75. But as long as you’re spending at least $27 per week at the grocery store, this cost is offset by the card’s high rewards rate. Party on!

Image via iStock.

The post Best Credit Card Offers for Entertainment appeared first on NerdWallet Credit Card Blog.

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No Credit History? Choose Secured Credit Cards Over Prepaid Debit Cards

Secured credit cards and prepaid debit cards are two financial products geared toward people with no credit or bad credit. However, only one will help you build good credit. Read on to learn the key differences between these two types of cards and which you should use if you have no credit history.

What is a secured credit card?

Secured credit cards are for people with no credit or bad credit who can’t qualify for traditional credit cards. When you are approved, you must put down a security deposit as collateral. The amount you pay up-front will be equivalent to your credit limit. Let’s say you put down $500 as a deposit; that means your credit limit will be $500.

You can then use your secured card like a regular card, making purchases with borrowed money and then paying it back (your deposit is not used to pay for purchases). While it may seem silly at first to only be extended credit by putting down money first, it allows you to show the creditor you are able to pay back what you borrow, making it an ideal first time credit card. With responsible use, the creditor may raise your credit limit without you having to put down more collateral. Eventually, you will get your deposit back and your credit should have improved. Then you can qualify for a credit card that doesn’t require an up-front deposit.

What is a prepaid debit card?

A prepaid debit card is another financial tool for people with no credit, but they work a little differently. They function like debit cards, except instead of being tied to a checking account, you reload money directly onto the card. As you swipe, your balance decreases. Once you’re out of money, you’re out, and it’s time to reload. These cards may be helpful if you don’t have a traditional debit card, but they are often riddled with fees, and they won’t help you build credit.

Why people with no credit history should choose secured cards

The key difference between these two types of cards for people with no credit history is that activity from secured cards is reported to the three major credit bureaus (Equifax, TransUnion and Experian), while activity from prepaid debit cards is not.

This means a prepaid debit card really only gives you spending benefits, such being able to make online purchases and not having to carry cash. Your usage of a prepaid debit card will not help you build credit because no activity is reported to credit bureaus. Your activity from a secured card, on the other hand, is reported to the bureaus. This means when you make smart moves, such as paying your balance in full, paying on time and keeping a low balance, your credit will get better — a benefit that is very important for people who want to eventually qualify for a mortgage or other loan.

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