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Credit reports serve as a record of how you have handled the repayment of any loan or debt that you’ve taken out. The items that are contained in your credit report primarily come from information collected by the three major credit bureaus. If you’ve ever had a credit card, student loans, or other type of debt, you likely have a credit report.

Many lenders might look at your credit report when they are considering whether or not to extend you additional credit. Your credit score is also calculated in part from information that’s included on your credit report. These are two good reasons to regularly look at your credit report and make sure the information in it is accurate.

What Is a Credit Report?

At its simplest, a credit report is a compilation of information regarding past debts, loans, or credit card accounts that you’ve managed. Your credit report will contain basic information about you, as well as information on the various accounts you’ve had in the past. This might include the name of the creditor, the dates the account was open, the monthly payment amount, if applicable, and any current or outstanding balance.

Recommended: When Are Credit Card Payments Due?

How Does a Credit Report Work?

The issuers of most credit cards, loans, or other forms of debt report information about that debt to the most popular credit bureaus — Equifax®, Experian®, and TransUnion®. Each credit bureau compiles its own information, though there is usually a lot of overlap between the information that appears on credit reports from different credit bureaus. Lenders typically send updated information to the credit bureaus each month, or if any information about your debt changes.

Recommended: Tips for Using a Credit Card Responsibly

Credit Report Information and Your Credit Score

It’s important to understand the relationship between the information on your credit report and your credit score. While these two things are related, they are not the same thing. As information on your credit report changes, your credit score updates as well. This means that it’s possible for your credit score to change every month (or even more often).

Further, while the information on your credit report influences your credit score, you won’t find your credit score listed on your credit report. Rather, you’ll have to go to lenders or credit monitoring websites for that information, both of which can allow you to check your credit score without paying.

Information Provided By a Credit Report

In addition to information about your accounts, your credit report may include other information about you. As one example, a credit report from Experian consists of four sections:

•   Personal information: This includes details such as your name, address, employment information, and any past names you’ve used.

•   Accounts: You’ll see both open and recently closed accounts listed.

•   Inquiries: Both hard and soft credit checks will appear, though only hard pulls affect your credit score.

•   Public records: This is information about you gathered from public records, including bankruptcies.

How Is a Credit Report Made?

Each of the major credit bureaus has its own process for how it generates a credit report. It’s typical that the credit bureau will have an informational section with details about you, sourced from loan applications and/or public records.

Another section of most credit reports is a listing of your open and recently closed accounts. Lenders will often report to the credit bureaus information about the amount, payment history, and status of accounts you have with them.

Why Is a Credit Report Important?

Your credit report is important because it is one of the sources of information that’s used to calculate your credit score. And your credit score can help determine whether you are approved for other financial products, like a credit card. If your credit score is too low, you may not be able to be approved for a new credit card or loan, and if you are approved, you may have to pay a higher interest rate.

Additionally, your credit report matters because many lenders will often refer to it when determining whether to approve you and under what terms. Sometimes, they may look at what’s known as a tri-merge credit report, which combines the three credit reports from each of the major credit bureaus.

Recommended: How to Avoid Interest On a Credit Card

How to Get a Credit Report

One good way to get your credit report is through AnnualCreditReport.com . This is a website authorized by federal law and brought to you by the three major credit bureaus.

You are typically able to get a copy of your credit report from each of the credit bureaus every year and may be able to do so every week as well. Note that you can only get your own credit report to review — checking someone else’s credit report isn’t an option.

When to Get a Credit Report

It is a good financial habit to regularly review your credit report. As mentioned, you can get a free copy of your credit report from each of the major credit bureaus.

By reading a credit report regularly, you can make sure that there’s no inaccurate information on your credit report. If you have incorrect information, it could have a negative impact on your credit score.

What to Look For in a Credit Report

As you regularly review your credit report, there are a few common credit report errors you’ll want to look out for. These include:

•   Typos or incorrect information

•   Information belonging to someone with a similar name

•   Closed accounts that are still marked as open

•   False late payment

•   Duplicate debts or accounts

Monitoring Your Credit Report

If there is any incorrect or erroneous information on your credit report, you’ll want to dispute that with the credit bureau. Disputing a credit report is a relatively straightforward process, and it’s an important one.

Generally, most credit report disputes must be submitted with documentation. Look for instructions on AnnualCreditReport.com or at each of the credit bureau’s websites.

The Takeaway

If you’ve been using credit cards, loans, or other financial products, it’s likely that you have a credit report with each of the three major credit bureaus. Your credit report contains identifying information about you as well as information about your open and recently closed credit accounts. Regularly monitoring your credit report and correcting any incorrect information is a good financial habit to have.

Whether you're looking to build credit, apply for a new credit card, or save money with the cards you have, it's important to understand the options that are best for you. Learn more about credit cards by exploring this credit card guide.

FAQ

Can negative information remain on my credit report for long?

Yes, negative information can remain on your credit report, even after you have closed your account. Most negative information will stay on your credit report for seven years, though some information (like bankruptcies) can stay on your credit report even longer.

How do I get my credit report?

You can get your credit report through AnnualCreditReport.com. You’re able to get a free copy of your credit report from each of the credit bureaus, often on a weekly basis.

Who is eligible to view my credit report?

You can view your own credit report, but in most cases, you will not be able to check someone else’s credit report. The only time someone else can view your credit report is if they have a legitimate reason, and they usually require permission to do so. This might include a potential lender that’s viewing your credit report to determine whether they want to extend you additional credit.

What errors might be present in my credit report?

While the major credit bureaus make every attempt to ensure that all credit reports are completely accurate, errors have been known to happen. Possible errors might include typos, accounts from someone with a similar name, duplicate accounts, or false late payments, among other errors. This is why it’s a good idea to regularly review your credit report and dispute any incorrect information.

What is the most important thing on a credit report?

Arguably all of the information contained in your credit report is important and worth taking the time to review. Perhaps most important is information on your accounts, as the details reported there have the potential to impact your credit score and thus your borrowing opportunities.

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Photo credit: iStock/Deepak Sethi

SoFi Relay offers users the ability to connect both SoFi accounts and external accounts using Plaid, Inc.’s service. When you use the service to connect an account, you authorize SoFi to obtain account information from any external accounts as set forth in SoFi’s Terms of Use. Based on your consent SoFi will also automatically provide some financial data received from the credit bureau for your visibility, without the need of you connecting additional accounts. SoFi assumes no responsibility for the timeliness, accuracy, deletion, non-delivery or failure to store any user data, loss of user data, communications, or personalization settings. You shall confirm the accuracy of Plaid data through sources independent of SoFi. The credit score is a VantageScore® based on TransUnion® (the “Processing Agent”) data.

*Terms and conditions apply. This offer is only available to new SoFi users without existing SoFi accounts. It is non-transferable. One offer per person. To receive the rewards points offer, you must successfully complete setting up Credit Score Monitoring. Rewards points may only be redeemed towards active SoFi accounts, such as your SoFi Checking or Savings account, subject to program terms that may be found here: SoFi Member Rewards Terms and Conditions. SoFi reserves the right to modify or discontinue this offer at any time without notice.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

This content is provided for informational and educational purposes only and should not be construed as financial advice.

Disclaimer: Many factors affect your credit scores and the interest rates you may receive. SoFi is not a Credit Repair Organization as defined under federal or state law, including the Credit Repair Organizations Act. SoFi does not provide “credit repair” services or advice or assistance regarding “rebuilding” or “improving” your credit record, credit history, or credit rating. For details, see the FTC’s website .

Third Party Trademarks: Certified Financial Planner Board of Standards Center for Financial Planning, Inc. owns and licenses the certification marks CFP®, CERTIFIED FINANCIAL PLANNER®

Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

External Websites: The information and analysis provided through hyperlinks to third-party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.

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An airline credit card is a category of credit card that allows you to rack up airline miles, among other cardholder benefits. These cards are usually cobranded with a particular airline. You can reap the perks of an airline credit card through purchases made on your card.

Airline credit cards are designed with the frequent flyer in mind. However, no two cards are alike. They can vary widely in terms of perks and restrictions, which you’ll need to consider when deciding if an airline credit card is worth it.

What Is an Airline Credit Card?

As mentioned, an airline credit card is a type of credit card designed for those who hop on planes frequently, such as avid travelers and those who fly a lot for work. Major network credit card networks and banks partner with airlines to offer cobranded airline credit cards.

They usually feature a rewards program, where you can earn points or credit card miles to redeem for flights, luggage fees, in-flight wifi, food and beverages, or upgrades to business or first class. Other perks might include reimbursement for canceled flights, insurance for lost baggage, and hotel room upgrades.

Recommended: How Do Credit Cards Work?

How Does an Airline Credit Card Work?

When you put purchases on your airline credit card, you’ll earn points or possibly miles. You can later use these points for travel-related perks, such as flights, hotel stays, and free upgrades. Beyond a rewards program, an airline credit card might also feature benefits like free upgrades to first class, invitations to airport lounges, and an annual travel credit.

To redeem your points, you usually can book directly through the card issuer’s portal. Sometimes, you can transfer your points to one of the card network’s hotel or airline partners.

Unlike private label credit cards, where you can only use the card at one specific store or group of stores, airline credit cards can be used anywhere the credit card network (such as Mastercard or Visa) is accepted.

Examples of Airline Credit Cards

Airline credit cards are a type of loyalty program for a particular type of airline, where you earn miles for making purchases with the card. However, there are several different kinds of airline credit cards:

•   General airline credit card: With a general airline credit card, you earn credit card points or miles for purchases, and you can redeem them for flights, upgrades, free wifi or in-flight food or beverage, and priority boarding or free checked bags. Some cards feature a sign-up promotion where you automatically get a certain number of miles or built-in travel perks.

•   Premium airline credit card: These have the upgraded version of airline card perks — think more points earned for each purchase, annual bonuses and travel credits, and access to exclusive airport lounges. As it goes, the greater the perks, the higher the annual fee. Premium airline credit cards tend to have higher annual fees than other types of airline credit cards. However, they generally aren’t quite as exclusive as, say, a black credit card.

•   Business airline credit card: This type of airline credit card is designed with the frequent business traveler in mind. Perks might include additional ways to earn higher points on business-related expenses, free upgrades to business class, a companion pass, and cards for you and your employees, which can help you earn miles more quickly.

Recommended: What Is an International Credit Card?

What to Consider Before Choosing an Airline Credit Card

The perks of an airline credit card are alluring. You’ll want to mull over these factors when shopping around for an airline credit card:

•   Fees: The more robust and attractive the perks, the higher the annual fee for a card likely is. That being said, there are a number of no annual fee credit cards in the airline credit card category that still offer perks.

•   Sign-up bonuses: Some cards will offer a sign-up bonus, such as a number of points for simply opening an account, or for spending a certain amount within a specified time frame.

•   Rewards: As you research cards, look at how you earn rewards as well as how many points you can earn for certain types of purchases. Also consider what types of rewards you’ll earn and if that’s a good fit for your spending. For instance, some people may prefer credit card miles vs. cash back.

Airline Credit Cards vs Travel Rewards Credit Cards

They might sound strikingly similar, and while airline and travel rewards credit cards both allow you to rack up credit card miles or points in return for rewards, an airline credit card is specific to an airline. In turn, you can only enjoy, say, free checked bags or flights with that specific airline.

Travel rewards cards, on the other hand, are broader in how you can redeem benefits earned. You typically use these more general rewards credit cards for any airline, hotels, and rental cars.

Both airline credit cards and travel rewards cards can come with added perks, such as credit card travel insurance. Additionally, both allow you to use them for any type of purchase. They also might feature no foreign transaction fees.

When to Consider a General Purpose Travel Credit Card

A general travel credit card could be a good idea if you travel enough to make the most of the offered travel-related perks and rewards. It can also be a stronger choice than an airline credit card if you aren’t loyal to any particular airline carrier or you don’t have a preference.

As usual, you’ll want to review the rewards program in addition to the perks, fees, rates, and restrictions on a card before making a decision.

Benefits of Airline Credit Cards

Unsure what the upsides are of an airline credit card? Here’s a look at the main benefits of having one:

•   Travel perks: If you hop on planes quite often, you can take advantage of an airline credit card’s rewards program. In turn, you might scoop up free flights, priority boarding, free checked bags, access to airport lounges, travel protection, and upgrades.

•   Discounts on the flight: Common in-flight discounts include money saved on wifi, meals and drinks, and on entertainment.

•   Sign-up bonuses: Some airline credit cards offer a generous sign-up bonus where you can snag points if you spend a certain amount within the first several months after opening an account. The exact terms will vary by card.

Airline Credit Card Cost

The cost of an airline credit card varies. Some have zero annual fees, while others can have an annual fee of several hundred dollars and upwards.

The annual percentage rate (APR) of an airline card also can vary. A particular credit card may advertise an APR range, though your rate will depend on your credit and financial situation.

Is an Airline Credit Card Right for You?

An airline credit card could be a good fit for you if you are a frequent flyer and love traveling on a particular airline. It’s important to carefully look over the perks, sign-up bonuses, and fees before moving forward with any particular airline credit card.

The Takeaway

An airline credit card could be a solid choice if you travel frequently and prefer to fly on one airline. Benefits can include travel perks, discounts, and sign-up bonuses, with rewards earned in the form of credit card points or miles. Before deciding if an airline credit card is a good idea, carefully research the perks and rewards and compare those against the fees, interest rates, and benefits of other credit cards, whether a travel card or a traditional card.

Whether you're looking to build credit, apply for a new credit card, or save money with the cards you have, it's important to understand the options that are best for you. Learn more about credit cards by exploring this credit card guide.

FAQ

Is an airline credit card worth it?

An airline credit card could be worth it if you are a frequent flyer and like to travel on a particular airline. However, it might not be worth it if you won’t end up using the rewards often enough to justify any annual fees on the card.

What are the benefits of booking a flight with an airline credit card?

Perks of booking a flight with an airline credit card might include free checked bags, bonus offers on miles, priority boarding, and lounge access, among others. The perks vary depending on the card.

Do you lose airline miles if you cancel a credit card?

Typically not. Points or miles earned on an airline credit card usually will be transferred to the specific airline’s loyalty program account shortly after you cancel and close out your account.

Must airline credit card rewards be used all at once?

Usually, you can use your rewards points or miles at your leisure and discretion. You do not have to use them in one fell swoop. However, points on an airline credit card might expire after a period of inactivity.

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Photo credit: iStock/Choreograph

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

This content is provided for informational and educational purposes only and should not be construed as financial advice.

Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

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Gas credit cards are an option that can help cut the costs of getting around. There are a few different types of gas credit cards to consider: branded gas cards that only work at specific gas stations, branded gas credit cards that you may be able to use elsewhere, and regular rewards credit cards that offer cash back or other incentives at the pump.

If you’re curious about the pros and cons of these cards, read on.

What Is a Gas Credit Card?

The term “gas card” can refer to a variety of different products (more on that in a moment). But at its most basic level, a gas credit card is a credit card that allows the cardholder to save money on gas, either with per-gallon discounts, cash back rewards, or other incentives.

Given the fluctuations in the average price of gas, these cards can be an excellent way to lower your overall transportation costs, especially if you drive often. However, like any credit card, they do come with both risks and benefits

Types of Gas Cards

As mentioned above, “gas credit card” and “gas card” can actually refer to several different products. Here’s a closer look.

Closed-loop gas cards

What is known as a closed-loop gas card is a card that can only be used at a specific gas station brand. They earn the cardholder discounts or rewards on money spent on that brand of fuel. They cannot be used at other gas stations or stores. This can make them convenient for those people who almost always go to the same gas station.

Of course, that limitation can also be too restrictive. Some people may want a card with more flexibility and capabilities. In addition, closed-loop gas cards can come with high interest rates, so if you don’t pay off your balance in full each month, you may actually end up spending more on gas overall.

Cobranded Gas Station Credit Cards

Gas station credit cards vs. gas credit cards are cobranded. That means they bear the logo of both the gas station and a major credit card issuer, such as Visa or Mastercard. These cards may offer specific rewards at the pump. However, because they’re part of a major card network, they can also be used elsewhere.

These credit cards offer the benefit of being available for more general, all-purpose use. Of course, they also make it more possible to rack up debt on non-gas-related expenses, like cool shoes, the latest mobile device, or just about anything. As is true with any credit card, paying off your balance on time and in full each month is the best way to avoid paying interest on your purchases, which can quickly eclipse any rewards you might earn.

Recommended: Understanding Purchase Interest Charges on Credit Cards

Traditional Gas Rewards Credit Cards

Finally, regular rewards credit cards may offer cash back, miles, points, or other rewards at the pump and elsewhere. Some rewards credit cards may allow borrowers to choose specific categories in which they’ll earn rewards at a higher rate, and the fuel pump might be one of those categories.

Traditional rewards credit cards can offer significant flexibility in how and where you get rewarded for spending your money, so this could be an excellent choice for those whose budget fluctuates over time.

For instance, perhaps you spend a lot on gas over the summer because you’re taking road trips, but less so during the fall and winter. A traditional rewards credit card may allow you to choose gas stations as a category for part of the year — and another, more relevant category (like grocery stores) for the rest.

However, like all credit cards, they do come with the risk of falling into debt by carrying an ever-larger revolving balance.

How Do Gas Credit Cards Work?

Here’s how a gas card works in most situations: Although there are several different types of gas credit cards, they typically sync up with how any credit card works. You use the card at the point of sale to purchase gas and reap rewards or discounts. Usually this is done by swiping or tapping the card at the fuel terminal or, if it’s not a closed-loop card, at another point-of-sale system.

With non-closed-loop gas credit cards, you may also be able to use the card to make online purchases by typing in the relevant card information. (Always make sure the website you’re purchasing from is legitimate and secure before supplying your credit card number to avoid credit card fraud.)

Like any credit card, gas credit cards usually charge interest on revolving balances; that is, money you charge on the card and don’t pay off at the end of the statement period. Interest rates can be hefty — upwards of 20% APR (annual percentage rate) — which is part of what makes falling into credit card debt so possible. That’s why paying off your balance in full and on time, each and every month can be crucial.

If you can’t, you might consider consolidating your debt with a 0% balance transfer or personal loan or you might work with a skilled credit counselor.

Things to Consider Before Applying for a Gas Credit Card

While a gas credit card can help you save money at the pump, like any other credit card, it can also put you at financial risk, especially if you’re already struggling to make ends meet and pay down debt.

In addition, applying for a gas credit card will result in a hard inquiry on your credit report, which can lower (although usually only in the short-term) your credit score and possible shift your credit score range.

How to Get a Gas Credit Card

In terms of how to get a gas card, it’s similar to applying for a credit card of any kind. There will be information you need to share about yourself and your finances on a gas card application.

You can usually apply for gas credit cards at the gas station offering one or online. The application process will typically require basic demographic information, like your name and address, as well as financial information such as your employment situation and annual income. Once you’re approved for the card, you’ll receive it in the mail and can start using it for gas purchases — and, if it’s a major network credit card, purchases elsewhere, too.

Putting Money on a Gas Card

In addition to gas credit cards, there are also reloadable prepaid gas cards which are not credit cards. They’re more like debit cards in that you can use them only to access a finite amount of preloaded money on the card. These types of cards can be a useful tool for managing gas spending and controlling your budget. You can load them with money at the gas station or online.

How to Pay With a Gas Card

How to pay for gas with a card works just as it would with any other card. You use it at the point-of-sale system (or present it to the person at the pump, if you’re in New Jersey).

If you’re using a refillable gas card, you’ll need to load money on it ahead of time. If you’re using a credit card, you’ll get a monthly statement listing everything you’ve spent over the billing period and will have the opportunity to pay it off in full, which is a wise move vs. paying the minimum amount.

Is a Gas Credit Card Right for You?

If you find yourself spending a lot of money at the fuel pump, a gas credit card could help you pinch some pennies and get where you’re going for less. But like other credit cards, the risk of going into debt — or at least paying more than you need to after interest — is real. A prepaid credit card for gas could be a good middle-ground option to help you stick to your transportation budget and manage your gas money budget more easily.

The Takeaway

There are multiple different types of gas credit cards, but they all generally have the same benefit: making the cost of gas more affordable by providing discounts or rewards at the pump. Whether you opt for a gas credit card or a reloadable gas card, this kind of product can make budgeting simpler, as long as used wisely.

Whether you're looking to build credit, apply for a new credit card, or save money with the cards you have, it's important to understand the options that are best for you. Learn more about credit cards by exploring this credit card guide.

FAQ

What is the difference between a gas card and a credit card?

People may use the term “gas card” to refer to prepaid gas cards or gas credit cards specifically designed to offer the cardholder rewards at the pump. A regular credit card doesn’t necessarily offer any specific fuel savings, but a gas credit card can.

Does a gas card affect your credit?

If you apply for any credit card, the issuer will run a hard inquiry on your credit history, which may have a short-term negative effect on your credit score. In addition, late payments and high balances can drive your score down, as well, but paying off your debt in full and on time can help create a healthy credit history.

Can you buy other things with a gas card?

That depends on the particular gas credit card you have. Some are cobranded by Visa or Mastercard and can be used for other purchases. However, some may be used strictly for gas purchases at certain outlets.

Can you get cash back from a gas card?

Some gas credit cards offer cash back rewards. You can also find unlimited cash back rewards credit cards that aren’t specifically designed for gas savings but can still help you earn back a percentage of every dollar you spend.

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Photo credit: iStock/Eleganza

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

This content is provided for informational and educational purposes only and should not be construed as financial advice.

Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

Disclaimer: Many factors affect your credit scores and the interest rates you may receive. SoFi is not a Credit Repair Organization as defined under federal or state law, including the Credit Repair Organizations Act. SoFi does not provide “credit repair” services or advice or assistance regarding “rebuilding” or “improving” your credit record, credit history, or credit rating. For details, see the FTC’s website .

Third Party Trademarks: Certified Financial Planner Board of Standards Center for Financial Planning, Inc. owns and licenses the certification marks CFP®, CERTIFIED FINANCIAL PLANNER®

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Applying for a credit card is an important step in many people’s financial lives. It typically involves three steps: gathering your information, filling out your application, and waiting for approval and the potential impact on your credit score.

Here’s the lowdown on the key things to know to apply for a credit card — and most importantly, to get approved for a credit card.

What to Consider When Applying for a Credit Card

Before you worry about how to get a credit card, it’s helpful to first understand what a credit card is. As the first word in its name suggests, a credit card is a line of credit, which is a type of flexible loan that enables you to borrow money up to a fixed limit.

When an individual charges a transaction at a business that accepts credit card payments, the credit card company pays the merchant. The cardholder must then pay back the credit card company by a designated date. Otherwise, they’ll incur interest charges.

This basic premise of how credit cards work means the card company is taking a risk when extending credit to any individual. They assess that risk via an application that determines not only whether the individual gets approved for a credit card, but also factors like their credit card limit and annual percentage rate (APR) on a credit card.

Before applying, there are some important considerations that can help improve your chances of getting approved for a credit card.

Recommended: Tips for Using a Credit Card Responsibly

Learn About the Terms Associated with Your Credit Card

Evaluating different types of credit cards can feel overwhelming for a newbie, so it’s a good idea to get familiar with some basic credit card terms that are common across all credit cards. Here are some common terms you might run into in a credit card application and as you begin to use your new card:

•   Balance: Your balance is the amount of money you owe on your credit card. This can include purchases (even paying taxes with credit card) as well as any fees, balance transfers, and cash advances.

•   Balance transfer: A balance transfer is when you move money from one credit card to another credit card, ideally one with a lower APR. This can allow you to pay off your debt more easily, though you’ll often pay a balance transfer fee to move over the balance.

•   Billing cycle: A credit card billing cycle is the period of time between the regular statements you receive from your credit card company. Usually, billing cycles occur on a monthly basis.

•   CVV: The card verification value, or CVV number on a credit card, is a three- to four-digit number that appears on a physical credit card. It serves as an additional layer of security in transactions that occur over the phone or online.

•   Expiration date: A credit card expiration date represents when a credit card is valid until. Usually shown as a month and a year, you can use your credit card up until the last date of that month in that year.

•   Late fee: The late fee is a charge you’ll incur if you miss making at least your minimum payment by your payment due date. To avoid this fee, it’s important to always pay on time, even if you’re in the midst of disputing a credit card charge, for instance.

•   Minimum payment: The credit card minimum payment is the least amount you must pay each month on your outstanding balance. This can be a flat amount or a percentage of your outstanding balance.

•   Purchase APR: The APR for purchases represents the total annual cost of borrowing money through purchases made with your credit card. This APR applies only on remaining balances after the statement due date.

Decide on the Type of Credit Card You Need

There are a number of different types of credit cards out there that can serve different needs. For instance, there are:

•   Travel rewards credit cards

•   Cash back credit cards

•   Credit builder credit cards

•   Balance transfer credit cards

While most of the above types of cards are unsecured credit cards, meaning no deposit is required, there are also secured credit cards. These do require a deposit, though they may also be more accessible to those with limited or low credit.

Different types of cards offer different benefits, and they may also vary when it comes to things like annual fees or average credit card limits. Some programs, like SoFi Plus, provide additional perks and rewards, making it worthwhile to explore all available options before choosing a card.

There may also be differences in the requirements for getting approved. It’s not so much a question of how old you have to be to get a credit card — rather, cards may have varying requirements for minimum income or credit score needed to qualify.

Before applying, it’s a good idea to do some comparison shopping to find a card that not only fits your needs but also that you’re eligible for.

Check Your Credit Score

Your credit score is a number that indicates the likelihood that you’ll repay a debt. It’s based on your credit history, and banks use it as a tool for evaluating credit card applications and deciding whether to approve them.

Here are some common factors that can affect your credit score:

•   Payment history, including on-time payments, missed payments, and having an account sent to collections

•   Credit utilization, or how much one owes relative to their total available revolving credit

•   Length of credit history

•   Types of credit accounts

•   Recent activity, such as applying for or opening new accounts

Generally, the higher an individual’s credit score, the more creditworthy they’re considered. If using the FICO® scoring model, here’s a general breakdown of what various scores mean:

•   300-580: Poor

•   580-669: Fair

•   670-739: Good

•   740-799: Very good

•   800-850: Exceptional

It’s a good idea for an individual to know their score and their chances of getting approved before applying for a credit card. The minimum credit score for a credit card will vary depending on the type of card it is.

For example, rewards credit cards, which come with big perks, tend to require at least a good credit score. But some types of credit cards, such as secured credit cards, may be more accessible to those with lower credit scores because they pose a lesser risk to lenders. This can make the latter category more appealing if, for instance, you’re getting your first credit card.

It’s worth noting that pulling one’s own credit information is considered a “soft inquiry” and does not negatively impact their credit score. When you apply for a new credit card, however, it will generate a “hard inquiry,” which can lower your credit score temporarily.

Where to Apply for a Credit Card

Credit cards are offered through banks, credit unions, retailers, airlines, colleges and universities, and a host of other institutions. This means that there are a variety of places where one can apply for a credit card — and often a number of ways to apply.

You can apply for a credit card in person, such as at a bank branch or retail location. Or, you may apply over the phone. Most credit card issuers also offer online applications, which add convenience to the process.

How to Apply for a Credit Card in 3 Steps

Ideally, by the time you sit down to actually apply for a credit card, you’ll have done the necessary homework to determine if you should get a credit card. This includes checking your credit score and potentially getting preapproved (though more on that later).

1. Gather the Necessary Information

The application process will be easier — and likely quicker — if you’re prepared. This means gathering any necessary documentation (more on what you’ll usually need in the next section) and having relevant information on hand, such as your income and Social Security number.

2. Fill Out and Submit an Application

Next, it’s time to fill out the application. There are a few ways you can do this: online, over the phone, or through the mail. It’s generally quickest to complete an application online.

You’ll need to fill in the requested fields and upload (or make copies of) any necessary documents. Once you submit your application, you should hear back within a few weeks at the most — sometimes, you’ll hear back almost the same day.

3. Be Ready for the Credit Impact and Repayment

As you wait for your credit card to arrive in the mail, you should take stock of the recent hit you took to your credit from the hard inquiry (typically, this will lower your score by several points for a brief period of time). It’s generally advised to avoid applying for multiple credit cards or loans within a short period of time to minimize the credit impact.

Also start to consider your strategy for how you’ll repay your credit card balance once you start swiping. Consider setting up automatic payments from your bank account each month to make sure you’re not late, or you might set a reminder on your phone or in your calendar.

What Do You Need to Apply for a Credit Card?

While application requirements will depend on the credit card issuer, what you need to apply for a credit card generally includes:

•   Annual income

•   Address and length of time at that address

•   Date of birth

•   Phone number

•   Social Security number

•   Employment status and sources of income

•   Financial accounts and/or assets

•   Financial liabilities

•   Country of citizenship and residence

Credit Card Preapproval and Prequalification

Getting prequalified or preapproved for a credit card means you’ve been prescreened for a credit card and meet at least some of the eligibility requirements. The two terms can be used interchangeably, though preapproval might carry slightly more weight in terms of your odds of eventual approval.

You’ll still need to go through the formal application to get approved for a credit card though, as neither preapproval or prequalification means you’ve been approved. The formal application process will involve a hard inquiry, whereas prequalification and preapproval generally only involve soft inquiries.

Still, preapproval or prequalification can be a good way to suss out potential credit card options and likelihood of getting approved before you move forward with an application and risk the impact to your credit.

What Happens If Your Application Is Turned Down?

Getting turned down for a credit card is indeed disappointing. When a credit card application is declined, you have the right to know why. You can request details about your application in the form of an adverse action letter, which includes the reason for the denial, details about your credit score, and notice of the right to dispute the accuracy of information provided by the credit reporting agency.

This can serve as helpful context for understanding why an application was declined. It can also help in determining what the appropriate next steps are for improving one’s chances of approval, if and when you apply for another credit card. For instance, you may consider applying for a credit card that has less stringent credit requirements, or you may take steps to build your credit score and try again at a later date.

Secured and Prepaid Credit Cards

If you were turned down for a credit card, you might take some steps to build your credit before trying again, or you might consider other options. Two alternatives you might look into are secured credit cards and prepaid credit cards.

With a secured credit card, you put down a deposit, which serves as collateral and usually acts as the card’s credit limit. Because there’s collateral there for the credit card issuer to fall back on if you fail to make your payments, secured credit cards are generally easier to get approved to than the more traditional, secured credit cards.

Prepaid debit cards don’t help you build your credit, as you’re not actually borrowing funds. Rather, you load the card with funds that you can then use in person or online. This can offer some of the convenience that a credit card offers over cash, without the application and approval process.

The Takeaway

Applying for a credit card can be a simple three-step process of gathering the required details, submitting an application, and handling the likely credit impact. You will probably have many options when selecting a card, so take your time to find the right fit.

Whether you're looking to build credit, apply for a new credit card, or save money with the cards you have, it's important to understand the options that are best for you. Learn more about credit cards by exploring this credit card guide.

FAQ

How do I choose a credit card?

Choosing a credit card is a personal decision that depends on your needs, preferences, financial habits, and eligibility. Before applying for a credit card that appears to fit your needs, it’s a good idea to check your credit score and any other requirements, such as minimum income, to improve your chances of getting approved.

How long does it take to get a credit card?

The length of time it takes to get a credit card can depend on a number of factors, including the eligibility requirements and how an application is submitted. Some online credit card applications offer fast or even instant approval, although it can take some additional time for the credit card to arrive in the mail.

Does your credit get pulled when applying for a credit card?

Generally, a credit card company will do a hard credit inquiry before extending final approval. However, there may be some scenarios where a credit card issuer may only do a soft inquiry, such as if an individual has been preapproved for a credit card or already has a banking relationship with the credit card issuer.

What are the requirements needed to get a credit card?

The requirements to get a credit card will typically vary from card to card. However, you’ll generally need to provide information on your annual income, your employment status, and your current debt obligations. Your creditworthiness also comes into play, though credit score requirements will differ depending on the card.

Can you get a credit card with no credit history?

It is possible to get a credit card with no credit history, though your options may be more limited. You may have an easier time getting approved for a secured credit card or a basic, no-frills credit card.

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Photo credit: iStock/Dome Studio

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

This content is provided for informational and educational purposes only and should not be construed as financial advice.

Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

Disclaimer: Many factors affect your credit scores and the interest rates you may receive. SoFi is not a Credit Repair Organization as defined under federal or state law, including the Credit Repair Organizations Act. SoFi does not provide “credit repair” services or advice or assistance regarding “rebuilding” or “improving” your credit record, credit history, or credit rating. For details, see the FTC’s website .

Third Party Trademarks: Certified Financial Planner Board of Standards Center for Financial Planning, Inc. owns and licenses the certification marks CFP®, CERTIFIED FINANCIAL PLANNER®

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The average credit score for a 20-year-old is 681, according to 2024 data from Experian. This is considered a “good” score and signals to creditors that you can manage credit responsibly, increasing the likelihood you’ll get approved for a loan or a credit card. However, you may not get the best interest rates or most favorable terms — those are usually extended to people with higher credit scores.

Find out what a credit score is, how a 681 score compares to the average American’s, and steps you can take to bolster your score.

What Is a Credit Score?

A credit score is a three-digit number lenders use to help them determine how likely you are to repay a loan on time. It’s based on information from your credit reports, including your payment history, length of credit history, amounts owed, and credit mix. The higher your score, the more attractive you are to lenders — and the more likely you are to get approved for a loan or credit card.

Lenders typically report information to credit bureaus on a monthly basis, and in general, your credit score updates every 30 to 45 days. This means your score will likely fluctuate over time.

You may also have more than one credit score, depending on which credit scoring model a lender uses. The two primary models are FICO®, which is used in most lending decisions, and VantageScore. As you’ll see below, scores are categorized slightly differently in FICO vs. VantageScore.

FICO Score Ranges:

•   Poor: Less than 580

•   Fair: 580-699

•   Good: 670-739

•   Very good: 740-799

•   Exceptional: 800-850

VantageScore Score Ranges:

•   Subprime: 300-600

•   Near prime: 601-660

•   Prime: 661-780

•   Super prime: 781-850

Average Credit Score by Age 20

As we mentioned, the average credit score for a 20-year-old is 681, which is a good credit score, especially for someone that age. After all, most 20-year-olds are still relatively new to the credit scene, and it takes time to build up credit.

What Is the Average Credit Score?

The average 20-year-old has a lower credit score than the typical American — but not by that much. As of 2024, the national average FICO Score is 717, which falls within the “good” range. By comparison, the average American’s VantageScore is 702 as of 2024, which the credit scoring model classifies as “prime.”

Recommended: FICO Score vs. Credit Score

Average Credit Score by Age

While age doesn’t directly impact your credit score, it can play a role. Credit scores tend to rise with age, as older borrowers generally have more time to establish a strong payment history and demonstrate responsible credit usage. In the chart below, notice how average FICO Scores rise from one generation to the next.

Age Group	Average Credit Score
Gen Z (18 to 26)	681
Millennials (27 to 42)	691
Generation X (43 to 58)	709
Baby Boomers (59 to 77)	746
Silent Generation (78+)	759

Source: FICO

At What Age Does Credit Score Improve the Most?

As the chart above shows, the biggest jump in credit scores is between those in Generation X (43-58) and the Baby Boomers (59-77). With the average Gen X credit score at 709, and Baby Boomers at 746, there’s a 37 point increase between the two age groups.

What’s a Good Credit Score for Your Age?

Regardless of your age, a “good” FICO Score is anywhere from 670 to 739. If you fall between those numbers — or exceed them — you’re on solid footing.

That said, many 20-year-olds are just starting to build their credit. As a result, their starting credit score most likely won’t be in the “good” range, but it also won’t be zero (no one’s credit score is) or at 300, the bottom score. Often, a starting credit score is in the good or fair credit score range (580-669).

Keep in mind that it can take up to six months before you even get your first credit score. Once you’ve established a track record of staying on top of your finances, you’ll likely see your score begin to increase. (Need help managing your money? A money tracker app can be a useful tool.)

Factors Influencing the Average Credit Score

Individuals who want a higher credit score can benefit from learning about the five key factors that affect your credit score. Some have more impact than others, but even the least-impactful factor can bring your credit score down.

What Factors Affect My Credit Score?

According to FICO, here are the factors that influence your credit score, in order of importance:

Payment History

This accounts for 35% of your credit score and carries the most weight. Prioritize making on-time payments, even if it’s just the minimum amount due. And practice smart budgeting, either with a spending app or a DIY method, so you can stay on top of monthly payments.

Credit Utilization

This refers to the amount of credit you’re using compared to what’s available to you, and it figures into 30% of your score. Lenders want to make sure you can handle your debts without being spread too thin or maxing out your available credit.

Length of Credit History

How long you’ve had credit makes up 15% of your score. The longer you’re able to show lenders that you’re responsible with credit, the higher your score will likely be.

Credit Mix

Having a diverse mix of credit contributes to 10% of your credit score and indicates to lenders that you can responsibly handle different kinds of debt.

New Credit

The amount of new credit accounts you open, and how quickly you do so, counts toward 10% of your score. Note that seeking out additional lines of credit means the lender will likely do a hard credit inquiry, and each hard credit check can temporarily lower your score by up to five points.

How Are Credit Scores Used?

Potential lenders use your credit score information as the basis for their decision whether to extend you credit. People with scores in the “good” or higher range generally have a better chance of being approved for a mortgage, loan, or credit card, than those who are in the “fair” or “poor” categories.

Your credit score may also be important in other areas of your life. For example, a landlord may run a tenant credit check before renting you an apartment or hoouse, and some employers may check your credit score during a background check.

How Does My Age Affect My Credit Score?

As we mentioned, credit scores tend to increase as people get older. This is most likely because they have a longer financial history and have adopted healthy financial habits along the way. But more impactful than age is the way someone manages their debt. For instance, a 50-year-old with a history of late payments will likely have a lower score than a 30-year-old with a spotless payment record.

How to Build Credit

When it comes to how to build credit, there are many strategies you can try. Here are some to consider:

•   Become an authorized user on someone else’s credit card. If you have a family member with a high credit score, you may want to ask if they can add you as an authorized user on their account. This allows you to use their credit card for purchases (without being liable for the payments) and begin establishing a credit record.

•   Look into getting your rent and utility payments reported to the credit bureaus. There are several services out there that will report your rent and utility payments to the credit bureaus.

•   Open a secured credit card. With this type of card, you put down a deposit that acts as your credit limit. Credit card issuers will report your payments to the credit agencies, allowing you to build your score by making on-time payments.

•   Get a store credit card. A credit card that can only be used at a particular retailer (think gas station or department store cards) can allow you to build credit, as long as the activity is reported to the major credit bureaus. Compared to traditional credit cards, store cards will have lower credit limits and may be easier to obtain.

How to Strengthen Your Credit Score

Whether or not you’re in the early phases of understanding how long it takes to build credit, there are steps you can take now to help bolster your credit score. Here are a few strategies to explore:

•   Pay your bills on time. As previously discussed, this is the most influential factor in your credit score. Setting up automatic payments from your bank account can help ensure you don’t miss a due date.

•   Keep credit utilization low. If you can’t pay your credit card balances off each month, strive to keep your total outstanding balance at 30% or less than your total credit limit. For example, if your credit card has a $1,000 limit, you’ll want to have a maximum balance of $300.

•   Ask for an increase in your credit limit. Doing so could raise your credit score as it can improve your credit utilization ratio. But be careful: Running up a balance on a card with a higher limit will defeat the purpose.

•   Avoid applying for too many credit cards or loans in a short period of time. With each application, a lender will likely perform a hard inquiry, which can lower your score temporarily. Multiple applications in a short time frame may also indicate to creditors that you’re a financial risk because you’re seeking a substantial amount of credit.

Credit Score Tips

Along with all of the aforementioned suggestions for building and strengthening your credit score, it’s important to monitor your score regularly by checking your credit report and disputing inaccuracies. You can get a free weekly copy of your credit report from each of the three credit bureaus via AnnualCreditReport.com.

Additionally, you can also use a credit score monitoring service to track any changes to your credit report and credit score.

Recommended: Why Did My Credit Score Drop After a Dispute?

The Takeaway

What is the average credit score for a 20-year-old? According to FICO, it’s 681, which is considered “good.” Handling credit responsibly is important in order to maintain — and eventually increase — this credit score. Making on time payments, not applying for too much credit at once, maintaining a diverse credit mix, keeping credit utilization low, and building a strong credit history are all important financial habits that will help a 20-year-old build and strengthen their score.

Take control of your finances with SoFi. With our financial insights and credit score monitoring tools, you can view all of your accounts in one convenient dashboard. From there, you can see your various balances, spending breakdowns, and credit score. Plus you can easily set up budgets and discover valuable financial insights — all at no cost.

See exactly how your money comes and goes at a glance.

FAQ

Can a 20-year-old have a 700 credit score?

Technically, yes, it’s possible. But it’s more likely that someone this early on in their credit journey will have a score somewhere in the mid-to-higher 600 range.

What is a bad credit score for a 20 year-old?

FICO categorizes any score under 580 as “poor” credit. The score would make it challenging to get credit cards or be approved for loans. If you are approved, you can expect higher interest rates and more restrictive terms.

Is 760 a good credit score for a 20 year-old?

A credit score of 760 is in the “very good” range and is only 40 points away from the top category of “exceptional,” per FICO. Achieving this high of a score usually requires a long history of responsible credit usage, which most 20-year-olds haven’t achieved yet.

How rare is an 825 credit score?

Having an 825 credit score is fairly unusual, since it’s in the top tier and only 25 points away from the highest score you can obtain. Arriving at and maintaining this credit score signals you have near-flawless credit.

Is a 900 credit score possible?

No. The highest possible credit score you can get is 850.

Can I buy a house with a 735 credit score?

Yes, you can buy a house with a 735 credit score. In fact, a 735 credit score exceeds the usual qualifications for all types of mortgage loans.

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Photo credit: iStock/FG Trade

SoFi Relay offers users the ability to connect both SoFi accounts and external accounts using Plaid, Inc.’s service. When you use the service to connect an account, you authorize SoFi to obtain account information from any external accounts as set forth in SoFi’s Terms of Use. Based on your consent SoFi will also automatically provide some financial data received from the credit bureau for your visibility, without the need of you connecting additional accounts. SoFi assumes no responsibility for the timeliness, accuracy, deletion, non-delivery or failure to store any user data, loss of user data, communications, or personalization settings. You shall confirm the accuracy of Plaid data through sources independent of SoFi. The credit score is a VantageScore® based on TransUnion® (the “Processing Agent”) data.

*Terms and conditions apply. This offer is only available to new SoFi users without existing SoFi accounts. It is non-transferable. One offer per person. To receive the rewards points offer, you must successfully complete setting up Credit Score Monitoring. Rewards points may only be redeemed towards active SoFi accounts, such as your SoFi Checking or Savings account, subject to program terms that may be found here: SoFi Member Rewards Terms and Conditions. SoFi reserves the right to modify or discontinue this offer at any time without notice.

Disclaimer: Many factors affect your credit scores and the interest rates you may receive. SoFi is not a Credit Repair Organization as defined under federal or state law, including the Credit Repair Organizations Act. SoFi does not provide “credit repair” services or advice or assistance regarding “rebuilding” or “improving” your credit record, credit history, or credit rating. For details, see the FTC’s website .

Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

Non affiliation: SoFi isn’t affiliated with any of the companies highlighted in this article.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

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