How to pick a credit card based on your credit score

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Everyone has a different credit history, which means there are a wide range of credit scores out there. Whether you have a perfect history or one full of late and missed payments, it is important to choose the right credit card for your unique needs. Whether you are looking to fix your credit, get cash back, or earn rewards for a free trip, follow along  to learn how to find the right credit card for your credit, so you can make a confident credit card decision.

Understanding your credit score

The first step in picking the right credit card is understanding your credit score. Your credit score is a number between 300 and 850 that tells banks and other lenders how likely you are to pay back money you borrow.

A high credit score indicates a low risk, and a low score indicates a high risk. This means credit card issuers are more likely to hand over a new card to someone with a good credit score, as they are more likely to pay their bills.

If you don’t know your credit score, you can get it for free online instantly. If your credit score is below where you want it, spend some time understanding your credit score so you can take steps to improve it over time.

The best cards for excellent credit

If you find you have excellent credit, you should look for a card that offers either top tier rewards or ultra-low rates. Because you are a low-risk and responsible borrower, banks may be lining up to hand you a new credit card.

For the very best travel rewards, consider a card like the Chase Sapphire Reserve, Chase Sapphire Preferred, or American Express Platinum. These cards come with annual fees ranging from around $100 to $550 per year, but you will likely get that back and more in value from the rewards programs.

If you want to earn cash back and frequent restaurants, the Capital One® Savor® Cash Rewards Credit Card is an excellent option. For low interest rates, consider Chase Freedom®, Citi® Double Cash, or Capital One’s VentureOne® Rewards card.

Good credit cards for bad credit

If you have bad credit, you won’t qualify for the lowest interest and best rewards. However, that does not mean you can’t get a credit card. Just make sure to keep balances low and pay off your card in full each month to avoid the trouble that may have led to your current low score.

In this category of cards, it is important to find a credit card that can help you build your credit without draining your bank account with excess fees. Two great cards for bad credit include the Capital One® Secured Card and Discover it® Secured Card. Both have no annual fee and give you a long-term opportunity to fix and build your credit score.

As with any card, make sure to pay off your balance in full and on time each month to avoid interest charges and a lower credit score. That is the opposite of what you want!

Tips to improve your credit

If you don’t have great credit, you are not out of luck. There are a few tried and true strategies you can follow to raise your credit score. Just understand that fixing your credit may not be a quick fix. Some negative credit information stays on your credit report for up to ten years!

  1. Pay off balances – Start by paying off any revolving credit balances (credit cards and lines of credit) as quickly as possible. While this is easier said than done, it is the fastest way to raise your credit score.
  2. Always pay on time – Never ever make a late payment and never miss a payment. Turn on automatic payments if you struggle here. Late payments lower your credit score for seven years.
  3. Fix errors – Many credit reports have errors on them that are not your fault. Review your credit report, identify any negative errors, and file a dispute to remove them.
  4. Deal with problems – If you do have any problems that were related to something you did, like a bankruptcy, late payment, or collection, try to resolve them and ask the lender if they will remove the negative item from your credit if you do.

Always focus on the long-term

Credit scores take years to build but only days to ruin. If you follow good credit habits and always pay your cards off in full every month and on time, you should see your credit card grow over time.

With a good understanding of your credit score, you can pick the perfect card for your needs. Once you have it, you can sit back and watch the rewards flow in and your credit score rise. Whatever your goal, use your credit to that end. That is what responsible credit management is all about.

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