Updated: Jul 16, 2024

The Best Credit Cards to Apply For With a 400-550 Credit Score

Compare the best credit cards for credit scores between 400 - 550. Find cards you'll qualify for and begin building positive credit today.
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Your credit score is one of the most important parts of your financial life. This three-digit number determines how easily you’re able to get approved for credit and what kind of deal lenders will cut you on interest.

A credit score in the 400 to 550 range falls at the lower end of the scale.

For most lenders, a range of 400 to 500 is considered “very bad” credit. Having a score around this mark makes it difficult to qualify for a mortgage or car loan.

If you do get approved, the cost of borrowing is likely to be steep.

How Your Credit Score Can Affect Your Future Mortgage Rate

Credit Score Range 30-Year Fixed Rate Mortgage 5-year fixed rate mortgage 7/1 ARM
620-639 4.684% 4.016% 4.506%
640-679 4.138% 3.47826% 3.96%
660-679 3.708% 3.04% 3.53%
680-699 3.494% 2.826% 3.316%
700-759 3.317% 2.649% 3.139%
760-850 3.095% 2.427% 2.917%

How Your Credit Score Can Affect Your Next Car Loan

Credit Score Range 60-Month new Car Loan 40-Month Used Car Loan
500-589 14.824% 16.325%
590-619 13.74% 15.086%
620-659 9.398% 10.186%
660-689 6.747% 7.599%
690-719 4.656% 5.322%
720-850 3.331% 3.778%

However, credit cards for people with credit scores between 400-550 do exist.

While the credit cards you'd be approved for won’t have the same premium perks as a card that’s designed for someone with a score in the 700 to 850 range, these credit cards can help you build a positive credit history and potentially earn some rewards in the process.

If you’re seeking a poor credit score credit card, finding the right offer for you can make all the difference.

Here are the top cards we recommend if your credit score falls in 400-550 Credit Scores range:

Capital One Platinum Secured

The Capital One Platinum Secured is a good option if you need to rebuild credit after a bankruptcy, foreclosure, or other credit pitfalls.

The initial security deposit is low -- you can open an account with $49, $99, or $200, depending on your creditworthiness.

Your minimum credit line would be $200, even if you start with just $49 security deposit. To get a higher credit limit (up to $3,000), however, you’ll have to deposit more.

If you get this card, you'll automatically be enrolled in CreditWise, Capital One’s credit tracking tool. With this tool, your score is calculated using TransUnion’s VantageScore 3.0 scoring model.

Scores are updated once a month so you can easily keep track of your improvement. Bonus: this card is also one of the few secured poor credit score credit cards without an annual fee.

Discover it Secured Credit Card

The Discover it Secured Credit Card card offers a way to build credit while earning cash back on what you spend.

Most secured credit cards for people with credit scores between 400-550 do not offer any type of rewards, so this is a unique feature.

This card is ideal for people who have bad credit, will pay off their entire monthly balance, and spend often on gas and dining out.

A very useful benefit is the free monthly FICO credit scores, a benefit you can use to track your credit progress.

Additionally, Discover will start to review your account every month to determine if you can be switched over to an unsecured Discover card.

The Discover it Secured Credit Card is one of the best secured credit cards because of its fee-friendly policies.

There’s no penalty APR if you pay late and no late payment fee the first time you miss a due date. There's also no annual fee, making it a great credit card option for people with poor credit scores.

Wells Fargo Secured Credit Card

The Wells Fargo Secured Credit Card doesn’t allow you to earn cash back or other rewards but it does have one significant advantage--it’s possible to get a credit line as high as $10,000.

Most other secured credit cards allow credit limits of up to $3,000-$5,000. As long as you’re not maxing out your credit limit, having more available credit can help improve your credit score.

This card does have a $25 annual fee.

If you have a Wells Fargo checking account, you can link it to your secured card as overdraft protection. As a member, you get built-in Visa perks, including car rental insurance, roadside assistance, and travel and emergency assistance services.

How a Secured Credit Card Works

A secured credit card works very much like a regular credit card with the exception that you have to put down collateral.

This collateral is a security deposit you place to obtain the secured card. Usually, the amount of the security deposit will be equal to your credit line.

For example, if you put in $300, you’ll have a $300 credit limit. If you deposit $1,000, your credit limit would be $1,000.

With an unsecured credit card, there’s no deposit required. That’s because these cards typically require a better credit history for approval so lenders assume that you’re less of a credit risk.

Banks are generally unwilling to give you an unsecured card when you have a credit score of 550 or less.

If your credit score is 550 or lower, that doesn't mean you’re stuck with a secured credit card forever.

If you’re paying your bill on time each month and keeping your balance low, that good behavior will show up on your credit history.

That, in turn, can help to grow your score over time. Then, you can proceed to get a regular credit card.

What Is a FICO Score?

There are several different credit scoring models but FICO credit scores are the standard.

This scoring system was developed by the Fair Isaac Corporation in the 1950s and according to Fair Isaac, more than 90% of U.S. lenders use the FICO score when making credit decisions.

The standard FICO score ranges from 300 to 850. A higher credit score is a sign that you’re more responsible with credit. There are many ways to check your FICO score.

It usually costs money to purchase a credit score from FICO, but it can be obtained for free.

How Your FICO Score is Calculated

The exact formula to calculate your FICO credit score is hidden from the public. However, your FICO score is based on the information in your credit report and it’s determined by five different factors:

Payment history (35%)

Your payment history is the single most important thing that affects your score. One late payment can knock up to 100 points off your score.

So if you’re already starting out at the bottom of the score range, you can’t afford to miss a payment. Paying all of your bills on time is the best thing you can do to get your score moving in the right direction if it’s gone off course.

Total debt owed (30%)

The FICO model also looks at how much debt you owe versus how much available credit you have. This is called your credit utilization ratio. Ideally, you should aim to use 30% or less of your available credit at any given time.

If you want to increase your utilization ratio, you can either decrease your card balance and/or increase your credit limits.

Length of credit history (15%)

The age of your accounts also factors into how your score adds up. FICO averages the age of all your different credit accounts together. The older accounts you have open, the better.

Types of credit used (10%)

A credit card is the easiest way to beef up your score. But, lenders want to see that you can be responsible with different types of credit.

Having student loans, a mortgage, or a car loan included in the mix can result in a higher score.

Inquiries for new credit (10%)

Every time you apply for new credit, an inquiry shows up on your credit report. Each inquiry can knock up to five points off your score.

So you should only be applying for new credit when you actually need it. Otherwise, it might look like you’re desperate to borrow money.

Information such as your age, income, or assets doesn’t affect your FICO score. Just note that banks will still use your other financial information when reviewing your application for a new credit card or loan.

We should also point out that there are other types of credit scores out there. Some are developed by TransUnion, Equifax, and Experian, the three major credit reporting bureaus.

While these scores may be very similar to a FICO score, they are calculated with their own secret formulas. Furthermore, they may not be used by lenders to approve new credit.

How to raise your FICO score quickly

The two most important things you can do with a secured card are to pay the bill on time and keep balances low. It can take weeks or even months to see the impact of those positive actions, however.

If you want to give your score a boost in less time, a review of your credit reports may be just what’s needed.

Some people often find that there was an error on their credit report that could negatively affect their score.

To check yours, you can get a copy of your credit report from each of the three major credit bureaus. This is free through AnnualCreditReport.com, a government-sanctioned website.

When you look up your credit report, check to make sure your account balances and payments are being reported correctly. Also, make sure all the accounts that are being reported on your report are in fact yours.

If you see something that’s inaccurate, don’t hesitate to dispute it with the agency that reported. If the credit bureau’s investigation determines that the information is wrong, they have to correct it.

That could bump your score up by a few points and alert the bureaus that something fishy was going on with your report.

Once your credit score has increased to roughly 650, you will have fair to good credit. With such a credit score, you can begin to qualify for some of best credit cards around.

All it takes to get there is a starting point, a good payment history moving forward, and low balances on your cards.