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April 29, 2022
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| Best Credit Cards to Rebuild Credit in May 2022 | |
| Best overall credit card for rebuilding credit | Discover it® Secured Credit Card |
| Best secured credit card with a low deposit | Capital One Platinum Secured Credit Card |
| Best credit card with no credit check | OpenSky® Secured Visa® Credit Card |
| Best credit card for retail shopping | Target REDcard™ Credit Card |
| Best unsecured credit card for rebuilding credit | AvantCard Credit Card |
If you need to rebuild your credit score, don’t panic. Even if your credit is bad, getting the right credit card for your credit profile and following good spending and payment practices consistently over time can bring your credit score back to life. We’ll explain how to identify the right credit card to apply for, so you can work on rebuilding from a poor or fair credit score.
Cardholders with the Discover it® Secured Credit Card earn 2% cash back at gas stations and restaurants on up to $1,000 in combined purchases each quarter. 1% unlimited cash back on all other purchases - automatically.
There’s also a unique sign-up bonus for new cardholders: Discover will match all the cash back you’ve earned at the end of your first year.
This card has a $0 annual fee and a 23.24% Variable APR. The minimum deposit is $200, with a maximum of $2,500.
The Discover it® Secured Credit Card is a stellar product for those with limited/bad/poor credit who want to improve their credit scores and earn cash back while doing so. Plus, the issuer will evaluate your account on a monthly basis (starting at seven months) to see if you qualify to graduate to an unsecured credit card and get your security deposit refunded. While other secured cards may offer the chance to graduate to an unsecured card, Discover’s transparency in how that process works makes this card especially attractive for rebuilding credit.
Finally, some consumers who have gone through bankruptcy apply for the Discover it® Secured Credit Card as a way to start rebuilding their credit score afterward. If you’ve gone through a bankruptcy, you might want to start by checking Discover’s prequalification tool before applying. Unlike an actual application, prequalification doesn’t generate a hard inquiry that dings your credit score a few points. However, you’ll still have to submit an application and deal with a hard inquiry to get the card even if you’ve prequalified. You should also be aware that prequalification is not a guarantee of approval, just an indicator that you’re more likely to be approved.
Cardholders with the Discover it® Secured Credit Card earn 2% cash back at gas stations and restaurants on up to $1,000 in combined purchases each quarter. 1% unlimited cash back on all other purchases - automatically.
There’s also a unique sign-up bonus for new cardholders: Discover will match all the cash back you’ve earned at the end of your first year.
This card has a $0 annual fee and a 23.24% Variable APR. The minimum deposit is $200, with a maximum of $2,500.
The Discover it® Secured Credit Card is a stellar product for those with limited/bad/poor credit who want to improve their credit scores and earn cash back while doing so. Plus, the issuer will evaluate your account on a monthly basis (starting at seven months) to see if you qualify to graduate to an unsecured credit card and get your security deposit refunded. While other secured cards may offer the chance to graduate to an unsecured card, Discover’s transparency in how that process works makes this card especially attractive for rebuilding credit.
Finally, some consumers who have gone through bankruptcy apply for the Discover it® Secured Credit Card as a way to start rebuilding their credit score afterward. If you’ve gone through a bankruptcy, you might want to start by checking Discover’s prequalification tool before applying. Unlike an actual application, prequalification doesn’t generate a hard inquiry that dings your credit score a few points. However, you’ll still have to submit an application and deal with a hard inquiry to get the card even if you’ve prequalified. You should also be aware that prequalification is not a guarantee of approval, just an indicator that you’re more likely to be approved.
What makes the Capital One Platinum Secured Credit Card unique is how the minimum deposit works. While most secured cards require you to submit a deposit in the amount of your credit limit — say, a $200 deposit for a $200 credit limit — this one offers a chance for a lower minimum deposit. After you apply, if you’re approved for the card, Capital One will set your minimum deposit at $49, $99, or $200. Whichever amount you’re required to deposit, you’ll get a $200 credit limit. If you’re looking to start off with a higher credit limit than $200, the maximum amount that can be deposited with this card is $1,000.
This card’s annual fee is $0 and the APR is 26.99% (variable).
If you think you might have a tough time putting together $200 or more for a minimum security deposit like most secured cards require, the Capital One Platinum Secured Credit Card offers the possibility of making a $49 or $99 minimum deposit. Note that the lower deposit amounts are not guaranteed, however, and if you’re approved for the card Capital One could require a $200 deposit. That said, even having the chance for a lower deposit while still getting a $200 credit limit makes this card unique. Plus, Capital One monitors your account — and by paying on time and spending responsibly, you might qualify to get your deposit refunded as a statement credit, although there is no set time frame set by the issuer in which to do that.
What makes the Capital One Platinum Secured Credit Card unique is how the minimum deposit works. While most secured cards require you to submit a deposit in the amount of your credit limit — say, a $200 deposit for a $200 credit limit — this one offers a chance for a lower minimum deposit. After you apply, if you’re approved for the card, Capital One will set your minimum deposit at $49, $99, or $200. Whichever amount you’re required to deposit, you’ll get a $200 credit limit. If you’re looking to start off with a higher credit limit than $200, the maximum amount that can be deposited with this card is $1,000.
This card’s annual fee is $0 and the APR is 26.99% (variable).
If you think you might have a tough time putting together $200 or more for a minimum security deposit like most secured cards require, the Capital One Platinum Secured Credit Card offers the possibility of making a $49 or $99 minimum deposit. Note that the lower deposit amounts are not guaranteed, however, and if you’re approved for the card Capital One could require a $200 deposit. That said, even having the chance for a lower deposit while still getting a $200 credit limit makes this card unique. Plus, Capital One monitors your account — and by paying on time and spending responsibly, you might qualify to get your deposit refunded as a statement credit, although there is no set time frame set by the issuer in which to do that.
Most credit card issuers perform a credit check when you apply for a card — this means checking your credit reports and reviewing factors like your payment history, whether you’ve had any debts sent to collections and how much debt you’re carrying. The OpenSky® Secured Visa® Credit Card, however, doesn’t require a credit check. So if you have a bad credit history and are worried you might be declined for other credit cards, this one could be a good option.
Note that you’ll still have to provide financial information when applying, including your total annual income, monthly housing payment and type of housing payment (rent, own, or other).
In addition, you should also be aware that there’s an annual fee of $35. Some of the other cards featured in this article charge no annual fee, though $35 is reasonable if you’re looking to get a credit card with no credit check that you can use to improve your credit score. The APR is 17.64% (variable).
Your credit limit can range from $200 to $3,000 (depending on the amount of your security deposit).
Perhaps you got behind on a bill and it got sent to a collections agency, tanking your credit score. Or maybe you cosigned on a loan for someone who didn’t keep up with the payments, and you weren’t able to pay it off, causing your score to suffer. Whatever caused your credit score to dip, if you’ve got limited/bad/poor credit and don’t want to undergo a credit check, the OpenSky® Secured Visa® Credit Card is a good card to consider rebuilding your credit score with.
Unfortunately, unlike with some other secured cards, the OpenSky® Secured Visa® Credit Card doesn’t offer the possibility to graduate to an unsecured card after demonstrating responsible behavior. That means your best path forward might be to get this card and use it to rebuild your credit, then apply for an unsecured credit card with no annual fee (such as the Capital One Platinum Credit Card) and close the OpenSky® Secured Visa® Credit Card.
Most credit card issuers perform a credit check when you apply for a card — this means checking your credit reports and reviewing factors like your payment history, whether you’ve had any debts sent to collections and how much debt you’re carrying. The OpenSky® Secured Visa® Credit Card, however, doesn’t require a credit check. So if you have a bad credit history and are worried you might be declined for other credit cards, this one could be a good option.
Note that you’ll still have to provide financial information when applying, including your total annual income, monthly housing payment and type of housing payment (rent, own, or other).
In addition, you should also be aware that there’s an annual fee of $35. Some of the other cards featured in this article charge no annual fee, though $35 is reasonable if you’re looking to get a credit card with no credit check that you can use to improve your credit score. The APR is 17.64% (variable).
Your credit limit can range from $200 to $3,000 (depending on the amount of your security deposit).
Perhaps you got behind on a bill and it got sent to a collections agency, tanking your credit score. Or maybe you cosigned on a loan for someone who didn’t keep up with the payments, and you weren’t able to pay it off, causing your score to suffer. Whatever caused your credit score to dip, if you’ve got limited/bad/poor credit and don’t want to undergo a credit check, the OpenSky® Secured Visa® Credit Card is a good card to consider rebuilding your credit score with.
Unfortunately, unlike with some other secured cards, the OpenSky® Secured Visa® Credit Card doesn’t offer the possibility to graduate to an unsecured card after demonstrating responsible behavior. That means your best path forward might be to get this card and use it to rebuild your credit, then apply for an unsecured credit card with no annual fee (such as the Capital One Platinum Credit Card) and close the OpenSky® Secured Visa® Credit Card.
Get 5% off at Target in-store and online. For a card with a $0 annual fee, that’s an excellent discount. Just beware that the APR is quite high at 23.15% (variable), so make sure to pay off your card in full every month to avoid incurring interest charges.
Store cards are often more accessible to applicants with less-than-stellar credit than other credit cards. And unlike the secured cards on this list, you won’t have to submit a security deposit. Odds are you’ll likely start out with a low credit limit that may increase over time as you demonstrate responsible behavior, such as paying on time and keeping balances low.
If you shop at Target frequently, the Target REDcard™ Credit Card‘s discount has the potential to save you a nice chunk of money in the long run. Plus, because it’s applied when you check out, you don’t have the hassle of redeeming points like some other store cards make you do.
Still, note that this is a store card, meaning you can only use it at Target and target.com.
Get 5% off at Target in-store and online. For a card with a $0 annual fee, that’s an excellent discount. Just beware that the APR is quite high at 23.15% (variable), so make sure to pay off your card in full every month to avoid incurring interest charges.
Store cards are often more accessible to applicants with less-than-stellar credit than other credit cards. And unlike the secured cards on this list, you won’t have to submit a security deposit. Odds are you’ll likely start out with a low credit limit that may increase over time as you demonstrate responsible behavior, such as paying on time and keeping balances low.
If you shop at Target frequently, the Target REDcard™ Credit Card‘s discount has the potential to save you a nice chunk of money in the long run. Plus, because it’s applied when you check out, you don’t have the hassle of redeeming points like some other store cards make you do.
Still, note that this is a store card, meaning you can only use it at Target and target.com.
This is a no-frills card with no rewards, a $59 annual fee and a 25.24* Variable APR. However, unlike many other credit cards for rebuilding credit, the AvantCard Credit Card is unsecured, meaning you don’t have to submit a security deposit. Plus, unlike a store card, you can use it anywhere.
While some unsecured cards aimed at applicants with fair/limited/bad/poor credit have opaque terms and excessive fees, the AvantCard Credit Card is a decent card with a reasonable annual fee. You can use this to demonstrate responsible spending and payment behavior and improve your credit score, then apply for a no-annual-fee card down the road.
If you have fair/limited/bad/poor credit and are looking for a credit card that doesn’t require a security deposit, the AvantCard Credit Card might be the right choice for you.
It reports to all three credit bureaus (Equifax, Experian and TransUnion) and can come with a credit limit ranging from $300 to $1,000. Plus, you can check online if you prequalify, which doesn’t hurt your credit score like an actual application with a hard inquiry will. Note, though, that even if you are prequalified, you’ll still have to apply (which will generate an inquiry) and can still be rejected once the lender carefully reviews your application and credit reports. Prequalification just shows you the likelihood of being approved for the card.
Unfortunately, the AvantCard Credit Card is not available to residents of Colorado, Iowa, Vermont, West Virginia or Wisconsin.
This is a no-frills card with no rewards, a $59 annual fee and a 25.24* Variable APR. However, unlike many other credit cards for rebuilding credit, the AvantCard Credit Card is unsecured, meaning you don’t have to submit a security deposit. Plus, unlike a store card, you can use it anywhere.
While some unsecured cards aimed at applicants with fair/limited/bad/poor credit have opaque terms and excessive fees, the AvantCard Credit Card is a decent card with a reasonable annual fee. You can use this to demonstrate responsible spending and payment behavior and improve your credit score, then apply for a no-annual-fee card down the road.
If you have fair/limited/bad/poor credit and are looking for a credit card that doesn’t require a security deposit, the AvantCard Credit Card might be the right choice for you.
It reports to all three credit bureaus (Equifax, Experian and TransUnion) and can come with a credit limit ranging from $300 to $1,000. Plus, you can check online if you prequalify, which doesn’t hurt your credit score like an actual application with a hard inquiry will. Note, though, that even if you are prequalified, you’ll still have to apply (which will generate an inquiry) and can still be rejected once the lender carefully reviews your application and credit reports. Prequalification just shows you the likelihood of being approved for the card.
Unfortunately, the AvantCard Credit Card is not available to residents of Colorado, Iowa, Vermont, West Virginia or Wisconsin.
There are different credit scoring models, and one person can have many different credit scores.
However, the FICO® Score is what’s most typically used by lenders when deciding whether or not to extend credit to a consumer. When it comes to the FICO® Score, anything under 580 is considered poor credit. If your score is in the 580 to 669 range, that’s considered fair credit. Anything above that range is marked as good, very good or exceptional, as illustrated below.
| FICO® Score Ranges | Rating | Description |
|---|---|---|
| <580 | Poor | Your score is well below the average score of U.S. consumers and demonstrates to lenders that you are a risky borrower. |
| 580-669 | Fair | Your score is below the average score of U.S. consumers, though many lenders will approve loans with this score. |
| 670-739 | Good | Your score is near or slightly above the average of U.S. consumers and most lenders consider this a good score. |
| 740-799 | Very Good | Your score is above the average of U.S. consumers and demonstrates to lenders that you are a very dependable borrower. |
| 800+ | Exceptional | Your score is well above the average score of U.S. consumers and clearly demonstrates to lenders that you are an exceptional borrower. |
Source: myfico.com
The key factor to consider when applying for a credit card to rebuild your credit score is whether the card reports to all three major credit bureaus — Equifax, Experian and TransUnion.
Most credit cards do, but there are some exceptions. You’ll want a card that reports to all three so that your card account and payment activity will be tracked by the credit report each bureau maintains for you. As long as you don’t max out your card and pay on time every month, that behavior will create a positive record on your credit reports — it’s the information pulled from the bureaus that makes up your credit score.
One of the best types of credit cards for rebuilding your credit score are secured cards, which require a security deposit in the amount of your desired credit limit. These are good when you’re working to improve your credit score, since they’re generally available to people with poor or fair credit. So while you might be rejected by other cards due to a bad score, a secured card is likely the way to go.
In most cases, you can get your deposit back when you pay off the card’s balance in full and close the account. Some cards also allow you the chance to graduate to an unsecured card and get your deposit refunded after showing you can use the secured version responsibly.
Be aware, however, that secured credit cards often come with high APRs. You should always pay off your card in full every billing cycle, which generally allows you to avoid interest charges.
Store credit cards, also called retail credit cards, can also be a good option for rebuilding your credit. These cards are often more accessible if you have less-than-stellar credit than a regular credit card would be.
There are two types of store cards — private label and co-branded. With private label cards, you can only use them at the specific store and its website. But with co-branded cards — which will bear the logo of a credit card network such as Mastercard, Visa or American Express — you can use the card anywhere that payment network is accepted.
Note that store cards often have high APRs and low credit limits, so always pay off your card in full every month. You should also be cautious of marketing offers — the store might try to attract you with sales and coupons, but this can lead to overspending and carrying a balance on your card. To avoid temptation, you may want to unsubscribe from marketing emails when you set up your online account with your new store card.
A secured credit card requires you to submit a security deposit to the issuer, typically in the amount of your desired credit limit. (Many secured cards have minimum deposits of $200.) If you don’t pay back what you charge to the card, the deposit protects the issuer. In other regards, a secured card functions like a regular (or “unsecured,” to use the technical term) credit card.
Secured cards are one of your best options for rebuilding credit: If you have a bad credit score, you might be rejected for regular, unsecured cards but still get approved for a secured one. However, know that it is still possible to be rejected when applying for a secured card.
Just like any other credit card, you can be rejected for a variety of factors when applying for a secured card. If you had debt with a particular credit card issuer when you went through bankruptcy and apply for a card with that issuer later, you might be rejected because of your history with them. However, the short answer is yes — it’s possible to be approved for a secured credit card after you’ve emerged from bankruptcy and are rebuilding your credit.
There are some unsecured credit cards available to consumers who are rebuilding their credit. For example, the AvantCard Credit Card is an unsecured card aimed at applicants with fair/limited/bad/poor credit that charges a $59 annual fee. In addition, if you’re approved for a store card, those cards don’t generally require deposits or have annual fees, either.
However, you should be cautious when considering unsecured cards aimed at applicants with bad credit. Some cards, such as those issued by Credit One and First Premier, can come with opaque terms and expensive fees. It’s often better to avoid such cards and save up for the deposit on a good secured card instead.
There’s a good chance you’ve been asked to apply for a store card at some point, such as when checking out at Macy’s or Kohl’s, or even online at Amazon. These cards are also called retail credit cards — they generally offer rewards or discounts for shopping at that particular retailer, and often issued by institutions such as Synchrony and Comenity. Some cards are private label, meaning you can only use them at that store (and the store’s online shop); others are co-branded, meaning they bear the branding of a payment network like Mastercard, Visa or American Express and can be used everywhere.
Store cards can be a good tool to rebuild your credit because they may be more accepting of applicants who don’t have the best credit. However, know that store cards generally have high APRs and low credit limits. If you have truly poor credit, you might be better off applying for a secured card.
In choosing the best credit cards to rebuild credit, we considered cards available through LendingTree and from major issuers, and selected cards accessible to applicants with poor or fair credit, with reasonable annual fees or no annual fees at all and with low or no security deposits. We also considered factors such as whether a card may be accessible to applicants who have emerged from bankruptcy, whether you must undergo a credit check when applying and whether you can get your deposit back (for secured cards) and graduate to an unsecured card after demonstrating responsible behavior. Finally, all credit cards on this list report your spending and payment activity to the three major consumer credit bureaus, which is important when working to rebuild your credit.
The above offers and/or promotions may have since changed, expired, or is no longer available. Check the Issuers’ website for more details.
