Looking for ways to get a credit card despite having a bad credit score to escape financial troubles? If so, this article is for you.
Read this article from A to Z to know how to escape obstacles as a result of a bad credit score. Ready?
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To successfully apply for a credit card with a poor FICO score:
- Understand What a Bad Credit Score Is
- Check Your Credit Reports
- Fix Errors on Your Credit Reports (if Any)
- Know Credit Card Options for Borrowers With Bad Credit
- See if Your Bank or Credit Union Issues Credit Cards for Bad Credit
- Choose the Most Suitable Credit Card for You
- Know What to Do If Issuers Deny Your Credit Card Applications
- Know What to Do If Issuers Approve Your Credit Card Applications
- Establish a Plan to Continually Improve Your Credit Score
1. Understand What a Bad Credit Score Is
To obtain a credit card with a bad credit score, understand what bad credit is. Your credit score is bad if you have a bad payment history. You may not pay your payments on time or owe too much debt.
Other factors responsible for bad credit are identity theft, hard Inquiries, and too many new lines of credit accounts. Know that your credit score reflects as low if the score range is under 580.
2. Check Your Credit Reports
To secure a credit card with a bad credit score, check your credit report.
Your credit report determines your credit score and financial institutions use your credit score to assess your credit risk. Check your report from all three major credit bureaus (Experian, Equifax, and TransUnion).
You have the right to access your credit report once every 12 months.
3. Fix Errors on Your Credit Reports (if Any)
To acquire a new credit card with a bad credit score, fix the errors on your credit report if any. Examine your credit report for mistakes. Ensure your address is up to date and pay your bills on time.
In case you run joint accounts, break financial links with anyone who has a poor credit score. Stop multiple applications for the loan within a short period. Also, dispute any information you feel is incorrect on your credit report with the furnisher that provides it or with your credit reporting agency.
4. Know Credit Card Options for Borrowers With Bad Credit
To easily gain a credit card with a bad credit score, know credit card options for borrowers with bad credit.
Despite your bad credit score, do you know there are still a good number of ways you can get a good credit card for yourself? If you don’t, consider the following steps:
- Consider a secured credit card. Secured credit card can also serve as your credit line but requires you to pay upfront cash which can be up to $200. In addition to providing a credit card for you, a secured card can help you to build your credit history.
- Use an unsecured credit card for bad credit.
- Use subprime credit.
- Utilize store credit cards. Unlike secured credit cards, store credit cards don’t require initial payment which serves as an advantage for you. However, you can only use store cards in certain stores.
- Become an authorized user on someone else’s credit card. Get someone with a good credit score to add you as an authorized user on one of his/her credit cards.
5. See if Your Bank or Credit Union Issues Credit Cards for Bad Credit
To have a credit card despite having a bad credit score, see if your bank or credit union Issues a credit card for bad credit. Most banks or credit unions typically provide their customers with complimentary credit cards.
Your primary bank has access to the whole of your credit history, so it can quickly decide your creditworthiness. Despite having a low credit score, primary banks are one of the easiest places where you can secure a credit card.
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6. Choose the Most Suitable Credit Card for Yourself
To get a “good” credit card with bad credit, choose the most suitable credit card for yourself. While looking for a suitable card, think about the cards you are most likely to be eligible for. Many card Issuers designate credit cards according to your credit score range. If your credit score falls within a bad credit range, don’t waste your time looking for cards in places where you can’t get one. To see a suitable credit card for yourself, read point no. 4 above (Know Credit Card Options for Borrowers With Bad Credit).
7. Know What to Do If Issuers Deny Your Credit Card Applications
To find a credit card with bad credit, know what to do if issuers deny your credit card applications. Ask the card issuer to reconsider. Add all eligible sources of income like government benefits, retirement savings, child support, and alimony.
Pay down some of your credit line balances to reduce credit utilization. Wait for hard Inquiries to fall off your report if you have many of them. You may have to wait up to 24 months before hard inquiries fall off your credit report. Apply for a more suitable credit card and develop good credit habits.
8. Know What to Do If Issuers Approve Your Credit Card Applications
To secure a credit card with bad credit, know what to do if issuers approve your credit card applications. Create a repayment strategy. You can set an automatic repayment method to avoid a late payment or missed payment. In addition, study the card’s terms and conditions.
>>>GET SMARTER: How to Properly Use Credit Cards
9. Establish a Plan to Continually Improve Your Credit Score
To maintain stability in your credit score, establish a plan to continually improve your credit score. Keep your credit utilization below 30%.
You may ask for a higher credit limit to maintain your credit balances. Also, pay your bills on time and preferably, use a secured card. The upfront cash in a secured card serves as your credit limit.
Conclusion
To properly apply for a credit card with a bad credit score, understand what a low credit score is. Check your credit report to correct mistakes if any and also to know your creditworthiness. Then research the financial institutions that have options for bad credit cards.
Also, check to see whether your bank or credit union offers credit cards for those with bad credit. Then choose a suitable credit card for yourself. In addition, understand your options if issuers accept or reject your credit card applications.
In conclusion, create a plan to constantly improve your credit score.
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