Cards designed for lower credit scores exist, but they work differently than standard cards
If your credit score is below 620, most mainstream credit cards will reject your process. Banks use credit scores to predict whether you'll repay borrowed money, and a low score signals past missed payments, high debt, or a thin credit history. But you have options: secured cards, credit-builder cards, and subprime cards are all designed for people rebuilding credit. Each type has different costs, deposit requirements, and paths to approval.
The catch is that these cards come with higher interest rates, annual fees, and lower credit limits than cards offered to people with good credit. You'll pay more to borrow money. But if you use one correctly — charging small amounts and paying the full balance on time — you can raise your score over 6 to 12 months and move to better cards later.
Key Takeaways
- Secured cards require a cash deposit (usually $200 to $2,500) that becomes your credit limit, and most report to all three credit bureaus to build your score.
- Subprime cards have no deposit but charge annual fees of $35 to $99 and interest rates of 24% to 36%, making them expensive if you carry a balance.
- Credit-builder cards are designed specifically for score improvement and often have lower fees than subprime cards, though they may limit how much you can spend.
- Approval odds are highest if you have a bank account with the issuer, a steady income, and no recent bankruptcies or charge-offs.
- Using the card for small purchases and paying the full balance each month is what raises your score, not just having the card.
Secured cards: deposit-backed cards that report to credit bureaus
A secured card requires you to put down a cash deposit with the bank, usually between $200 and $2,500. That deposit becomes your credit limit. You use the card like any other — make purchases, receive a bill, pay it — but the bank holds your deposit as collateral in case you don't pay.
The appeal is that secured cards report your payment history to Equifax, Experian, and TransUnion, the three major credit bureaus. If you pay on time every month, your score rises. After 6 to 18 months of on-time payments, many issuers will convert your card to an unsecured card, return your deposit, and raise your limit based on your improved credit history.
Common secured card issuers include Capital One, Discover, and U.S. Bank. Most charge annual fees between $0 and $95. Interest rates typically range from 18% to 24%. The deposit itself is not a fee — you get it back — but you lose the use of that money while the account is open. If you have $500 to deposit, that $500 is locked up.
Subprime cards: no deposit, but higher fees and interest rates
A subprime card doesn't require a deposit. You explore, the issuer reviews your credit, and if approved, you receive a card and credit limit without putting money down. This appeals to people who don't have cash available for a deposit.
The trade-off is cost. Subprime cards charge annual fees of $35 to $99 and interest rates of 24% to 36%. If you carry a $500 balance at 30% interest and pay $50 per month, you'll pay roughly $150 in interest alone before the balance is gone. These cards are expensive to use if you can't pay the full balance each month.
Subprime issuers include Credit One Bank, Milestone, and First Progress. Like secured cards, they report to all three credit bureaus, so on-time payments build your score. But the high fees mean you should treat a subprime card as a short-term tool: use it for small purchases, pay in full each month, and move to a better card as soon as your score improves.
Credit-builder cards: designed specifically for score improvement
Some issuers now offer credit-builder cards that sit between secured and subprime cards. They have no deposit requirement, but they're designed to help you build credit rather than maximize spending power. Credit-builder cards often have lower credit limits ($300 to $500) and lower annual fees ($0 to $50) than subprime cards.
The catch is that credit-builder cards may not work like traditional cards. Some require you to make a deposit into a savings account that the issuer holds, similar to a secured card but with a different structure. Others limit your spending to a small amount per month or require you to pay a portion of your balance upfront. Self and Chime offer versions of these cards.
Credit-builder cards report to credit bureaus and can raise your score if you use them responsibly. They're worth exploring if you have a thin credit history or recent damage but want to avoid the high fees of subprime cards.
What lenders look for when you have a low credit score
Banks know that low credit scores mean higher risk. To offset that risk, they look for other signals that you'll repay. Having a bank account with the issuer — especially a checking account with direct deposit — significantly improves your odds. It shows you have a stable income and a relationship with the bank.
A steady job history matters too. Lenders want to see that you've been at the same employer for at least a few months. Recent bankruptcies, charge-offs, or collections accounts make approval much harder; some issuers won't approve you within 2 to 3 years of a bankruptcy discharge.
Your income doesn't have to be high, but you need to have some. If you're unemployed or have no income, approval is unlikely. If you have a co-signer with better credit, some issuers will approve you, though the co-signer is legally responsible for the debt if you don't pay.
how the process works and what to expect after approval
Start by comparing cards on the issuer's website. Most banks let you check your odds of approval before you formally explore — this is called a "soft pull" and doesn't hurt your credit score. Once you've found a card that fits, you'll fill out an online process with your name, address, income, and Social Security number.
The issuer will run a hard credit inquiry, which temporarily lowers your score by a few points. They'll also verify your income and check for recent bankruptcies or fraud. Approval usually takes a few minutes to a few days. If approved, you'll receive the card in the mail within 7 to 10 business days.
If you're approved for a secured card, you'll need to fund your deposit before the card is activated. Most issuers let you do this online or by phone. If you're denied, you can ask why — the issuer must tell you the reason under the Fair Credit Reporting Act. Common reasons include insufficient income, too many recent credit inquiries, or a recent bankruptcy.
Using the card to actually raise your credit score
straightforward having a credit card doesn't raise your score. What raises it is a pattern of on-time payments and low credit utilization. Credit utilization is the percentage of your available credit that you're using. If your limit is $500 and you carry a $250 balance, your utilization is 50%.
To raise your score fastest, keep your utilization below 10%. Charge small amounts — $20 to $50 per month — and pay the full balance before the due date. This shows lenders that you can borrow and repay reliably. After 6 months of perfect payments, you should see your score rise by 50 to 100 points, depending on your starting score and credit history.
Avoid these mistakes: carrying a balance to "build credit" (interest costs money and doesn't help more than on-time payments do), missing a payment (one late payment can drop your score 100+ points), and explore for multiple cards at once (each process triggers a hard inquiry and temporarily lowers your score).
When to move from a low-credit card to a better one
After 6 to 12 months of on-time payments, your score should improve enough to may have access to for a standard card with better terms. Many issuers will automatically convert your secured card to an unsecured card and return your deposit. If not, you can explore for a different card once your score reaches 650 or higher.
Don't close the low-credit card when ready after moving to a better one. Closing it reduces your available credit and can lower your score. Instead, keep it open, use it occasionally for a small purchase, and pay it off. This maintains your credit history and keeps your utilization low.
If you've had the card for 2+ years with perfect payments, you can also call the issuer and ask them to lower the interest rate or waive the annual fee. Some will do this to keep you as a customer.
Frequently Asked Questions
Will explore for a credit card hurt my credit score?
Yes, but only temporarily. Each process triggers a hard inquiry, which lowers your score by a few points for about 3 months. Multiple applications in a short time have a larger impact. explore to one or two cards you're confident about, not five at once.
Can I get a credit card with no credit history?
Yes. Secured cards are designed for people with thin or no credit history. You'll need a bank account, proof of income, and a Social Security number. Some issuers also accept recent immigrants or people who've never borrowed before.
What's the difference between a secured card and a credit-builder card?
Secured cards require a cash deposit that becomes your credit limit; credit-builder cards may have no deposit or a different structure. Both report to credit bureaus. Secured cards typically have higher limits and more features; credit-builder cards often have lower fees. Compare the specific terms of each card you're considering.
Do I have to carry a balance to build credit?
No. Paying the full balance each month is actually better for your score than carrying a balance. Interest charges cost you money and don't help your score more than on-time payments do. Charge small amounts and pay in full.
How long does it take to improve my credit score with a new card?
Most people see a 50 to 100 point improvement within 6 months of on-time payments, depending on their starting score and credit history. Larger improvements take 12 to 24 months. The longer your payment history, the more your score improves.