What are bad credit credit cards guaranteed approval?
The term "guaranteed approval" for credit cards, especially for bad credit, is largely a marketing phrase and a misnomer. No legitimate credit card issuer can offer a 100% guarantee of approval.
All lenders, by law, are required to review an applicant's ability to repay debt. This means they will conduct some form of assessment, even if it's a minimal one. If you see a card advertising "guaranteed approval," it's crucial to read the fine print, as there will always be conditions you must meet.
Here’s a breakdown of what that phrase usually means and the types of cards that are the closest to "guaranteed approval."
The "Guaranteed Approval" Misnomer
Prequalification: Many cards that use this language are actually referring to a pre-qualification process. This is where you can check your eligibility without a hard inquiry on your credit report. While it gives you a very high probability of approval if you meet the criteria, it's not a guarantee. The final approval still depends on a formal application and a hard credit pull.Minimal Requirements: For some cards, the "guaranteed" part refers to the fact that they will approve almost anyone who meets a few basic, non-credit-related requirements, such as having a valid Social Security number, a U.S. address, and a bank account.
The Cards That Are Closest to Guaranteed Approval
When you have bad credit, your best bet for a high probability of approval is a secured credit card. These cards are the closest to being guaranteed because you eliminate the risk for the lender by providing a security deposit.Unsecured Credit Cards (Less Likely to be "Guaranteed")
While not "guaranteed," certain unsecured cards have a reputation for being more lenient with applicants with bad credit. These are generally the cards that use the pre-qualification and are often more expensive.1. Indigo® Mastercard® for Less than Perfect Credit: Known for approving applicants with bad credit.
2. Milestone® Mastercard® and Surge® Platinum Mastercard : These cards are similar, offering a pre-qualification tool but are known for their high fees.
3. Destiny Mastercard®: Often marketed to those with less-than-perfect credit.
Your Best Strategy
Instead of searching for "guaranteed approval," which is a deceptive marketing term, focus on this two-step process:1. Use a Prequalification Tool: Use the online pre-qualification tools from major issuers like Capital One, Discover, and others. This will show you which unsecured cards you are likely to be approved for without a hard credit check.
2. Consider a Secured Card: If you are denied for an unsecured card or want a safer bet, a secured card is your most reliable path to building credit. It provides a consistent way to show positive payment history, which will eventually qualify you for better, unsecured cards with higher limits and lower fees.
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FICO® Credit Scores
FICO® Score Ranges:
- Exceptional: 800–850
- Very Good: 740–799
- Good: 670–739
- Fair: 580–669
- Poor: 300–579
What is a Credit Score?
A credit score is a three-digit number, typically ranging from 300 to 850, that predicts your creditworthiness—how likely you are to repay borrowed money on time. Lenders use this score to assess the risk of lending to you and to determine the interest rates and terms of any credit you might receive.
Why is a Credit Score Important?
A credit score is important because it acts as your financial reputation. Lenders, landlords, insurers, and employers use this single number to quickly judge how reliable you are with money. A higher score helps you qualify for loans and credit cards, often securing lower interest rates that can save you significant money. Conversely, a poor credit score can lead to application denials or much higher costs for borrowing, making it a key factor in your overall financial opportunities.
FICO® Credit Score Facts
- Three-Digit Number: Like other credit scores, FICO® Scores are a three-digit number that summarizes a consumer's credit risk.
- Range: Most standard FICO® Scores range from 300 to 850. Higher scores indicate lower credit risk.
- Data Source: FICO® Scores are calculated using data from your credit reports maintained by the three major credit bureaus: Experian, Equifax, and TransUnion. Your score may vary slightly depending on which bureau's data is used.
- Industry Standard: Lenders rely on FICO® Scores for mortgages, auto loans, and credit cards because they provide a consistent, statistically sound assessment of the likelihood that a borrower will repay their debt.
Note: Credit scores are used to represent the creditworthiness of a person and may be one indicator to the credit type you are eligible for. However, credit score alone does not guarantee or imply approval for any credit card product.
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