How to get a business credit card with fair credit

Much of the discourse around credit ratings focuses on achieving good or excellent credit and avoiding poor credit. But many small business owners fall into more of a middle ground, with fair credit.

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If you have fair credit, you might not qualify for a number of popular business credit cards. However, there are still some available and important reasons to pursue them. Using a business credit card allows you to build business credit, which is crucial for getting approved for loans and other financial opportunities that help your company thrive.

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In this article, we'll explore how to get a business credit card with fair credit in order to grow your company and open up your financing possibilities. We'll also share steps for choosing the right credit card offer with your level of credit and setting yourself up for approval.

What is considered a fair credit score?

Also known as having "average credit," a fair credit score is generally defined as 580 to 669 in the FICO range or a VantageScore of 601 to 660. Those with fair credit scores are typically viewed as subprime borrowers, as they might have some late payments or major debts in their credit history. Or, they might be new to the credit game and therefore have little information to offer lenders.

What is the minimum credit score for a business credit card?

To qualify for most business credit cards, you need 670 or higher for FICO and 661 or higher for VantageScore. So, having a fair credit score can close some financial doors for business owners. You can still qualify for some cards, like secured cards, if you don’t have the credit score for an unsecured card. Secured cards will ask you to put down a security deposit, which will be used as your credit limit.

Why do you need a business credit card?

Having a dedicated business credit card can be hugely beneficial for small business owners. For starters, it's a great way to build business credit, which will likely be lacking in your company's early days. You can also take advantage of special business card perks, like additional purchase protection and expense management systems. You'll also gain the opportunity to earn rewards each billing cycle, all while increasing your company's buying power.

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A business credit card can also help you separate your business and personal finances. This means less time and effort spent keeping track of business expenses on your personal credit card and a much easier experience around tax season. And should you or your business get audited by the IRS, you won't have to separate everything out again.

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After you've applied for the card, you also won't have to worry about your personal credit score taking a big hit based on your utilization ratio and other aspects of your business spending.

Can I get a business credit card with a fair credit score?

Your options for a business credit card will be limited if you have fair credit, but there are still cards available to you. The best business credit card for your needs should evaluate you based on factors other than your credit score, and come with low enough fees that you’ll be able to use it to build a strong credit score.

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The better your business credit score, the lower your interest rate, so business owners with fair credit should examine the different APR options. You might end up paying dearly to carry a balance. Look into repayment terms as well, as shorter terms typically require higher payments and thus limit cash flow for your business.

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The cards available to those with bad credit might also come with higher fees. Take a look at the intro APR and regular interest rate, balance transfer fees, foreign transaction fees, and other fees you’ll have to pay before choosing your card.

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Also, consider whether you care about earning rewards on your business purchases. Some card options offer sign-up bonuses, cash back rewards, and travel rewards on eligible purchases.

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And of course, don't forget to research the eligibility requirements for each card, as you might not qualify for reasons unrelated to your credit score. The type of business you're operating and the level of revenue, for example, might be factors.

Can I get a business credit card with a 500 credit score?

Although a credit score of 670 or above is typically considered good, it's possible to get a business credit card with a credit score of around 500. Some cards evaluate based on additional factors, like your business’s income, rather than solely relying on your credit score. Ramp is one example of a business card that doesn’t consider your credit score.

What is the easiest business credit card to get?

Secured credit cards are the most accessible option for businesses lacking a strong credit history. Unlike most credit cards, they don't have stringent credit score or revenue prerequisites. This is due to the upfront cash payment required with a secured card, which serves as your credit line. If your credit score isn't strong, secured credit cards provide an alternative route to building your business credit.

How can you improve your fair credit score?

If you have a fair credit score, there are ways to improve your chances of getting approval for a business credit card and strengthening your credit profile overall.

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First of all, don't submit applications for lots of credit cards at once. You want to be selective and choose a card you have a chance of qualifying for as someone with fair credit. That's because each time you apply for a credit card, the issuer will conduct a hard inquiry into your credit history, which decreases your credit score by at least a few points.

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As for more active steps, take care to pay all your bills before the deadline, stay on top of your tax filing, and monitor your credit to ensure no errors that could impact your standing go undetected. Keep solid financial records that you can easily share with potential lenders.

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Pay attention to your credit utilization rate as well. That's the ratio of your balance to your credit limit, and in general, you want to keep it below 30% (so a balance of less than $3,000 if your credit limit is $10,000, for example). All of these steps demonstrate responsible use of credit and the ability to easily pay off the balances you carry.

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Once you have a business credit card, you should take this same approach. Making payments in a timely manner and keeping your balances low can help improve your credit score and bump you from "fair" into the "good" range.

Get the best of all worlds with Ramp

The Ramp corporate card offers an alternative solution to those with fair credit looking for a way to grow their businesses. Unlike many of its competitors, Ramp doesn't conduct credit checks or ask for personal guarantees. Instead, we use sales revenue and cash balance to determine eligibility and credit limits. Ramp also has no annual fees, 1.5% cash back on all purchases, and unlimited free employee cards.

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We also report to the credit bureaus, so you can build good credit as you spend with a Ramp charge card. Cardholders have access to expense management tools, custom spending limits, and accounting tools, allowing you to control spending, examine detailed analytics, and scale your business.