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Key takeaways
- The best credit cards for 500 credit score are specifically designed to aid in rebuilding credit. They welcome low credit scores, offer score monitoring, and report payment history.
- To choose the best card it’s imperative to know your score. Then find a card that has low fees and focuses on building credit.
- Use your card responsibly to boost your score. Pay your bills on time, don’t max out your card, and limit your applications for the best results.
Credit cards for a 500 credit score are not impossible to find but it is more challenging. You’ll discover that you have limited options but you’re not excluded from credit entirely. There are plenty of credit cards for a 500 credit score designed with rebuilding scores in mind.
Let’s go over the best cards that give you a chance at credit all while offering a pathway to improve your financial health.
Jump to:
- Unsecured credit card options for a 500 credit score
- Is a 500 credit score good or bad?
- How to choose a credit card for bad credit
- How to improve bad credit score?
- What is the easiest card to get approved for with poor credit?
- Will two credit cards build credit faster?
- More tips to improve your 500 credit score
- Bottom Line
Unsecured credit card options for a 500 credit score
If you have a low score, you might be curious about what credit card options are available to you with a 500 credit score. Your options are of course limited, especially if you don’t want to put down a security deposit, but there are quite a few choices.
Here are the best credit cards for a 500 credit score.
Milestone® Mastercard®
Milestone® Mastercard® is a reasonable option for consumers looking to boost their scores and who don’t want to tie up money in a security deposit. The card is easy to qualify for, reports payment history, and comes with all the benefits of a Mastercard®.
Destiny Mastercard®
Destiny Mastercard® is a straightforward card that provides consumers with the opportunity to boost their scores, gives them the advantage of a $700 limit, and is easy to be approved for.
Fortiva® Mastercard®
Fortiva® Mastercard® stands out from the crowd as an option for beginners or those with low scores. It offers a high initial limit of $1,000, cash back rewards up to 3%, and the option to prequalify before you apply.
Surge® Platinum Mastercard®
Surge® Platinum Mastercard® is a strong option for people building their scores. It’s easy to get, provides a high initial limit of up to $1,000, and the chance to double it after six months of responsible use.
FIT® Platinum Mastercard®
FIT® Platinum Mastercard® stands out as an option for beginners or those with low scores as it offers something unique in its class; a chance to double your initial limit to $800 in only six months.
Reflex® Platinum Mastercard®
Reflex® Platinum Mastercard® is a rare credit card for consumers with low scores. It is easy to qualify for, has a high initial limit of up to $1,000, and is an excellent place to start rebuilding your score.
Is a 500 credit score good or bad?
A 500 score is in the bad range. As of April 2023, 3% of Americans have a score of 500 or lower according to FICO. This can make it hard to qualify for cards or loans.
Your score indicates how much of a risk you pose to lenders. The lower your score, the higher the risk. With a 500 score you’re considered a big risk. You’ll find that it’s harder to be approved for loans or cards and if you are, you’ll end up paying higher interest rates.
This doesn’t mean that all doors are closed. There are cards designed for people with lower scores. With responsible use, you can move your score into the good category.
How to choose a credit card for bad credit
You can get a credit card with a 500 credit score but you need to carefully assess your options. Let’s go over in detail how to approach this decision.
Know Your Score
Before applying, know where you stand. Not all subprime cards accept applicants with a score of 500. Find out your rating and only apply to cards within your range to reduce the likelihood of rejections.
Familiarize Yourself with Fees
When exploring options scrutinize the fees. The majority of subprime cards have annual fees, setup fees, and monthly maintenance fees. Read the fine print, beware of hidden fees, and compare offers.
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The best cards will have reasonable annual fees and a lower APR.
Focus on Building Credit
Look for cards that report payments to all three major credit bureaus – Experian, TransUnion, and Equifax. Reporting payments is the only way your score will go up.
Many issuers provide free access to your score. You may also find cards that offer incentives like limit increases or a chance to graduate to a card with better rewards after a period of on time payments.
Choosing the right credit card for a under 500 credit score involves knowing what to watch out for. Make sure you can afford the fees, try to prequalify, and double check the issuer reports payments.
How to improve bad credit score?
It might seem counterintuitive, but everyone starts off with a low score. The good news is it’s not permanent. You can easily improve it by following these tips.
Don’t Max Out Your Card
A large balance signals to lenders that you’re at a higher risk of default. Aim to keep your utilization ratio — the percentage of your limit you’re using — below 30%.
Always Pay on Time
Payment history is the most influential scoring factor. Even one late payment can have a detrimental effect. Make payments well before they’re due. Set up autopay so you’ll never miss a due date.
Pay in Full
Don’t fall for the minimum payment trap. You’ll only accrue interest. It’s much better to pay your balances in full. This will save you money, keep your balances low, and help your score.
Avoid New Inquiries
Each time you apply for a card or loan, a hard inquiry is made, which causes a dip in your score. Only apply when necessary and wait at least six months between applications.
Keep Your Starter Card
The length of time you’ve had credit counts. The older your accounts, the better. Keep your first card open – unless it has high annual fees – to increase the average age of your accounts.
Diversify Your Accounts
Lenders want to see that you can handle different types of accounts, namely cards and loans. This is a small factor. Only diversify if you need to and don’t take on excess debt.
Building your score won’t happen overnight. Adopt these policies, be consistent, and you’ll see improvements in a few months.
Visit MoneyFor for more advice on cards, debt, and more.
What is the easiest card to get approved for with poor credit?
The easiest cards to get approved for are secured cards. Secured cards require a refundable security deposit, which sets your limit. The security deposit serves as collateral minimizing the risk for the issuer.
Secured credit cards are an excellent starting point. Issuers typically report payments, offer lower interest rates, and fewer fees. If you can afford to have money tied up in a security deposit, a secured credit card is a good choice.
Will two credit cards build credit faster?
The short answer is yes. Having two cards will make it easier to keep your utilization low, ideally below 30%. Try for 10% and your score will rise faster.
The catch is you must manage both cards responsibly. Pay off your balances in full each month to avoid interest and make all payments on time. Mismanaging multiple cards can lead to high balances, missed payments, and ultimately do more harm than good.
More tips to improve your 500 credit score
More and more companies offer products to help boost your rating. Take advantage of a few and watch your score climb over time.
Credit Builder Loan: You don’t get the money right away with this loan. Instead, the lender holds onto the funds, you make small monthly payments, and they report your on time payments. Once the loan is paid off, you receive the money. Our favorite is Brigit’s credit builder loan where your monthly payments are as low as $1.
Becoming an Authorized User: Ask someone with a good score to add you as an authorized user on their card. You benefit from their positive payment history.
Report Monthly Payments: Normally only card and loan payments are reported. Some companies like StellarFi will report all monthly payments including rent, utility bills, and subscription services.
Check Your Credit Report: Regularly check your report for any errors or discrepancies. If you see anything wrong, dispute it since it could be dragging down your score. ChoiceCreditScore lets you monitor your score and protect your identity.
Bottom Line
A low score presents challenges but it’s not the end of the road. If you don’t want a secured card or can’t afford a security deposit, there are unsecured credit cards for a 500 credit score. They won’t have the best rewards or the lowest fees, but you can build your way to better cards with responsible habits.
Choose an unsecured card that reports your payment history, never miss a payment, keep your balances low, and be consistent. Follow these steps and you’ll be able to move onto better cards
