Credit cards are considered by many to be a necessity in the modern age, but the type of credit card one can get will depend on what their credit score is.
Companies that issue credit cards will look at people's credit scores prior to giving them a card of their own, and a high or low score can greatly impact the specific type of care the applicant can receive. FICO, a software company that monitors credit scores, has a scale of 300-850, with five different levels for grading people, according to U.S. News.
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"A lower score can impact the terms of the loan offered to you, like the interest rate," said Can Arkali, the senior director of scores and predictive analytics at FICO.
People with a credit score of 300 through 579 are in the poor credit range, while scores between 580 and 669 are rated fair, 670 through 739 are rated good, 740 through 799 are rated very good, and 800 through 850 are rated exceptional. Anyone interested in a rewards credit card will need a credit score of at least 670.
If a person's credit score is below 670, it can be raised by taking financial accountability, such as paying off one's credit card debt. Additionally, a person can pay off their bills on time as a way to boost their credit score.
Even if a person has no credit history, they can still apply for a secured credit card. Alternatively, cards made for college students with no credit history can also be applied for.
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Credit scores are calculated by FICO by analyzing a person's payment history, the amounts one owes, the length of their credit history, their new credit, and their credit mix.
FICO's scoring is more widely used across the span of credit cards, but the VantageScore scale is also available, though the latter is both similar and different to FICO's form of scoring. For example, VantageScore's form of scoring puts people with scores between 300 and 499 as very poor, while those with scores between 781 and 850 are rated excellent.