According to data from the major credit bureaus, over a third of Americans have subprime credit, with 17% of those having a fair credit score. But what is a “fair” credit score? And does having average credit mean you can’t get a decent credit card?
Average Credit Scores in FICO and VantageScore
According to Experian, a “fair” credit score is any FICO Score between 580 and 669. The FICO scoring method is the preferred credit score model of most lenders. Approximately 90% of banks use FICO to judge an applicant’s creditworthiness, with the other 10% using VantageScore.
VantageScore is a scoring model created by the three major credit bureaus (Experian, Equifax, and TransUnion). This model defines a “fair” or average credit score as one between 601 and 660.
What Does Fair Credit Mean?
What does having “fair credit” mean? According to lenders, most people with a credit score in the 600s are “subprime” borrowers. Banks view subprime borrowers as a bigger credit risk than people with an excellent score. Because of this larger risk, people with average credit can expect higher interest rates, lower credit limits, and an inability to qualify for the best credit cards.
Average credit scores aren’t all bad news, however. A 600+ credit score means an applicant won’t have to rely on secured credit cards. Instead, they can get unsecured cards that require no deposit. This can free up personal finances for other things, like bills, paying down debt, and additional costs.
Average credit also means individuals might be just a year (or less) away from reaching a good credit score. Displaying financial responsibility can boost credit scores quickly, and fresh-start unsecured cards are a great way to accomplish this goal. By making on-time payments, paying statement balances in full, and avoiding other pitfalls, credit scores can rise by as much as 50 points in a matter of months.
What Are the Best Credit Cards for Average Credit?
However, Credit One isn’t the only bank offering credit cards for subprime credit. Several smaller banks also cater to those with fair credit, with cards like the Total Visa, Reflex Mastercard, and First Access Solid Black Visa being popular options.
Two cards worth highlighting are the Milestone® Gold Mastercard® and the Indigo® Platinum Mastercard®. Both cards offer an unsecured line of credit and are ideal for those with a credit score in the low 600s or even high 580s. Both cards feature a fixed-rate APR and monthly reports to the major credit bureaus – making them ideal for building credit.
- See if you’re Pre-Qualified with no impact to your credit score
- Free access to your Vantage 3.0 score from TransUnion* (When you sign up for e-statements)
- Monthly reporting to the three major credit bureaus
- Use your card at locations everywhere Mastercard® is accepted
- Regular Purchase APR: See Terms*
- Cash Advance APR: See Terms*
- Cash Advance Transaction Fee: See Terms*
- Annual Fee: See Terms*
- Foreign Transaction Fee: See Terms*
- Late Payment Penalty Fee: See Terms*
- Return Payment Penalty Fee: See Terms*
- Great for demonstrating responsible use of credit
- Short and easy-to-complete pre-qualification form
- 24/7 mobile account access
- Choose your card design free of charge
- Regular Purchase APR: 24.9%
- Cash Advance APR: 29.9%
- Cash Advance Transaction Fee: $0 during the first year; after first year, either $5 or 5% of the amount of transaction.
- Penalty APR: 29.9%
- Annual Fee: $0 to $99 depending on the card issued
- Foreign Transaction Fee: 1% of each transaction
- Late Payment Penalty Fee: Up to $40
- Return Payment Penalty Fee: Up to $40
- Over Limit Penalty Fee: Up to $40
For more information on repairing credit and recommendations on the best credit cards for credit repair, visit our comprehensive guides to bad credit and fair credit on our “credit needed” category pages.