Credit Cards For People With Very Bad Credit

Credit Cards For People With Very Bad Credit - Credit Cards For People With Really Bad Credit

You have bad credit. Your credit score is low. You need to reestablish credit to raise your score. No one will give you a second chance because of your low credit rating. It’s a Catch-22 scenario. Sound familiar?

What do you do when nobody will give you credit? I am going to assume that if you are reading this article, this may be your particular problem. Reestablishing credit is difficult at first but it is obtainable for anyone, and I do mean anyone. Listed below are some tips for you to follow. I operate in the Dallas Fort Worth area so some of the creditors may not be available to your area but I think you will get the general idea of how to get credit and make the climb out of subprime.

What if your credit score is below 675?

You are now migrating to the subprime credit market and you will still get credit offers but with double-digit interest rates and higher administration fees. You will be solicited by numerous creditors. You will still be easily approved by creditors such as Capital One. Paying your bill on time, every time, will increase your credit rating and the ultimate goal is to get your score back above 700 to enjoy the better rates and terms. Staying clean in this arena with low balance-to-available credit ratio's will raise your score and promote you to the higher tier rating.

What if your credit score is below 620?

Now you are in the higher-risk category and you will be limited on who will even offer you credit terms. You will still be available for a car loan through most of the big automaker B-lenders such as Nuvell Credit or Drive Time Financial. The rates will be significantly higher. You can get unsecured credit cards with banks such as First Premier, Orchard Bank, Capital One and Household Bank. You will be paying higher fees, premiums and annual charges but they do report to all 3 credit bureaus, so keep those payments on time and stay clean. Certain national stores will still offer credit still such as Target, Wal-Mart, and Old Navy but they will keep your available credit low, to around $200 - $300, and the penalties for missed payments will be significant. The average rate for those store cards is around 21.99% APR.

What if your credit score is below 580?

You are in the HIGHEST RISK pool. Everything you do will be closely watched. About 90% of this countries creditors will not lend to you. Because of your score, you are now defined as 20 times "more likely" to end up in collections than the average consumer. The banks who will extend you credit will command the highest legal interest rates and they will keep you on a short leash. There is very little leniency shown in this category so MAKE THAT PAYMENT ON TIME or you will be immediately turned into collections and shunned from anymore second chances. Those creditors who are willing to even help you reestablish credit include: First Premier, Aspire Visa, and Prime Mutual. Proceed cautiously.

What if your credit score is below 560?

Chances are you will not be extended credit without posting your own money as a security deposit against your new account. This may include the same lenders in the previous category but now they may require you to put up $100 - $200 as a deposit and application fee. But this is better than a debit card which does not report to any bureaus. If you have no good credit and want to rebuild, this is the price of admission to get back in the game. Again, having no credit or reported positive trade lines does nothing to improve your score and only hinders the credit recovery process.

What if your credit score is below 550?

It’s very difficult to get anyone to help you here. I am aware of only one credit card, New Millennium Bank who will open you a secured account without even performing a credit check.. I think this may be your only resource when your score gets this low. However, they do report to all 3 bureaus. You will pay a higher premium and additional fees to even receive the card. When everyone else says "No," they still say "Yes." Their credit offer may be the only chance to get bureau-reported credit for some consumers.

Credit Cards For Very Bad Credit

Tips on Getting Credit Cards for Very Bad Credit

A lot of things in today’s world are pegged on your credit score. The three companies—Equifax, TransUnion and Experian come up with every individual’s credit ratings consistently, and these are taken as a parameter by the credit card companies when they have to issue a credit card to an applicant. In other words, if you have a good credit rating, your chances of getting a credit card improve. However, do you get a credit card if you have bad credit? It might be an uphill task, but it is not entirely impossible.

The first thing you have to remember here is that if your credit rating is low, you will have to end up paying a higher rate of interest on your credit card even if you get one. That fact is etched in stone. There is nothing like a low APR credit card for someone whose credit rating is bad. So, each month you will be making a significantly higher payment on your credit card than other people who have a good credit reputation. It might seem ironical, but that is the way it is.

Now, you may find some credit cards for people with bad credit rating online. Some of the new companies that have sprung up also offer instant credit cards for bad credit. You might want to check those out. Some of them might need some kind of security, like you might have to submit your professional details, etc. But, if you look harder, you might also find unsecured credit cards for bad credit quite easily. The best thing about these is instant approval. With this instant approval, you come to know within just a few minutes if you are eligible, and then you can decide whether you want to make a formal application.

One more way to go about it is to choose prepaid credit cards, also known as debit cards in some countries. Banks will willingly offer you prepaid credit cards, because here they have a great degree of security. You first deposit some money into your account and whenever you use the card for any transaction, the money is used from that account. You cannot go higher than the amount of money you have put into the account; so, that is a limitation with these cards. But, they are a nice way to improve your credit rating.

Speaking about improving your credit rating, that is actually what you should be striving for. Even if you get a credit card, you should ensure that you manage them well, make their payments in a timely manner, because that improves your standing. Six months down the line, you will find that you are in a better financial position and that your credit rating has improved than when you started out.

When your credit rating improves, you might plan on switching over to another card, with a bigger limit and a lower interest rate, and transfer your balances to it. Since your chances of getting better credit cards will have improved now, this becomes a possibility. Just keep in mind to choose a card that has a low balance transfer rate so that you are not much affected when you are transferring your balance to your new card.

So, finding a credit card for bad credit rating is possible. It is all about proper management, and in about a year, your situation will have considerably improved than what it is today.

Credit card tip from www.credit-card-application.org.uk :

"Always read the terms & conditions carefully before you apply for any credit card. Applying for multiply credit cards at the same time may negatively affect your credit rating."