Having a credit score of 550 is considered very poor and will make it difficult to qualify for most credit cards, especially unsecured cards. However, there are some options available for rebuilding credit even with a score this low.
What is an unsecured credit card?
An unsecured credit card is a credit card that does not require any collateral, deposit, or security to be approved. Unsecured cards are based purely on your creditworthiness. Secured credit cards, on the other hand, do require a refundable security deposit that serves as collateral in case of nonpayment.
Minimum credit scores for unsecured cards
Most unsecured credit cards require a minimum credit score between 600-650 to qualify. This is because lending to someone with a very low score below 600 is seen as high risk by issuers. Some key facts on credit score requirements:
- Average minimum score for an unsecured card is 660
- Cards marketed to those trying to build or rebuild credit can go as low as a 550 score
- Major issuers like Chase and Capital One want to see scores of 690+ for their top rewards cards
- A poor 550 score will disqualify you from almost all unsecured cards
Can you get approved with a 550 credit score?
Although rare, there are a handful of unsecured cards that may approve applicants with a 550 credit score. These tend to be credit builder cards aimed at helping subprime borrowers rehabilitate their credit. Approval is still challenging with such a low score, but possible if you meet other criteria.
Targeted credit builder unsecured cards
Here are some unsecured cards that may approve applicants with 550 credit:
- First Access Visa
- Fit Mastercard
- Reflex Mastercard
- Surge Mastercard
The credit limits on these cards are usually $300 – $500. There is no guarantee of approval with a 550 score, but these represent your best chances at an unsecured card.
Alternatives if denied for unsecured cards
If you do get denied for an unsecured card with a 550 credit score, there are alternatives to build your credit:
Apply for a secured card
Secured cards are easier to qualify for with poor credit because they require an upfront security deposit. The deposit amount becomes your initial credit limit. Secured cards can help demonstrate responsible use of credit and rebuild your score.
Become an authorized user
You can rebuild credit by becoming an authorized user on someone else’s credit card account, preferably someone with a long history of responsible use. Their positive activity will be reflected on your credit reports.
Get a credit builder loan
Credit builder loans allow you to make small monthly payments, with the total paid back to you as a lump sum after successfully making all payments. This demonstrates ability to repay installments on time.
Wait for score improvement
Waiting for your credit to recover further and spending time improving your score through other means like paying down debts can help until you qualify for unsecured cards.
Tips for qualifying with a 550 credit score
Getting approved for the best unsecured card possible with a 550 score will require some work. Here are some tips to boost your odds:
Lower credit utilization
High balances relative to your credit limits hurt a low score. Pay down cards to below 30% utilization if possible.
Dispute reporting errors
Incorrect late payments or other mistakes can be disputed with credit bureaus to potentially improve your score.
Become an authorized user
Becoming an authorized user on a long, positive credit history account can add to your credit file.
Limit new credit applications
Applying for too much new credit can hurt through added hard inquiries. Wait between card applications.
Watch credit card use
Responsible credit use by making on-time payments in full builds positive history.
Factors that influence approval chances
With an extremely low 550 score, any extra qualifications you can meet will help get approved. Additional positive factors include:
- Verifiable income – stable employment income improves likelihood of repaying debt.
- Lower debt-to-income ratio – less existing debt obligations to income makes approval more likely.
- Shorter negative history – old negatives weigh less heavily than new ones.
- Positive existing accounts – having any established accounts in good standing is beneficial.
- Ongoing score improvement – an upward score trend shows you are fixing problems.
Sample credit cards to try for a 550 score
Here are examples of credit cards to consider applying for with a credit score around 550:
| Credit Card | APR Range | Credit Limit |
|---|---|---|
| First Access Visa | 17.88% – 29.99% variable | $300 – $500 |
| Capital One Platinum Secured | 26.99% variable | Equal to security deposit ($49 – $200 minimum) |
| OpenSky Secured Visa | 17.39% variable | Equal to security deposit ($200 – $3000) |
Downsides of getting an unsecured card with 550 score
There can be some risks or drawbacks associated with getting an unsecured credit card with very poor credit:
- Higher APRs – Approved cards will have much higher interest rates, sometimes over 25%, making carrying a balance costly.
- Low credit limits – Credit limits of $300 – $500 limit flexibility and can constrain utilization.
- Difficulty upgrading – Once approved, upgrading to a better rewards card later may still be difficult until your score improves more.
- Application declines – Applying with a 550 score likely means several denials before approval.
- Predatory terms – Some subprime card offers have predatory fees or conditions that make building credit expensive.
Building credit from a 550 score
If approved for an unsecured card, be sure to use it responsibly to continue building your credit. Key tips include:
- Always make at least the minimum monthly payment on time.
- Try to pay balances off fully each month.
- Keep balances low relative to credit limits.
- Mix in other credit types like installment loans.
- Check credit reports and fix errors.
- Allow 6-12 months before applying for more credit.
With responsible use over time, an unsecured card can help rebuild your credit back to a more acceptable level.
Conclusion
A 550 credit score is quite low, but approval for an unsecured credit card aimed at subprime borrowers is possible in some cases. Cards like the First Access Visa, Fit Mastercard, or other credit builders may approve applicants despite poor credit if other qualifications are met. Approval is still very challenging with a 550 score, so be prepared for denial as well. If approved, use the card responsibly to continue improving your credit.