It’s important to know your credit score nowadays. If your score has been affected due to an error, you’ll want to get it fixed right away. So what if you don’t find any errors, but just have bad credit?
It happens, maybe something has affected you personally to not be able to pay and it can easily affect your credit score.
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Table of Contents
How to Get Credit Card with Bad Credit
- Make sure to catch up on payments– Know that many credit cards for bad credit won’t be approving any new applicants with recent delinquencies.
- Start comparing credit card fees – Make sure that you make low-cost improvement your top priority when you’re looking. One way to do it is looking for a card with low or no annual fees, monthly fees and one-time fees. Plus another way is to always pay your bill in full to avoid interest charges.
- Focus on secured cards with high approval and low fees – Most secure credit cards offer good chance of approval since they require you to place a security deposit that’s like your credit line. This deposit also prevents the need to charge fees so it makes secured cards the cheapest way to help rebuild your credit.
- Secured doesn’t always mean guaranteed approval – Although a secured card is the closest thing you can get for a guaranteed approval, most will still perform a credit check on you.
Secured Cards Help with Bad Credit
If you have bad or nonexistent credit, you can apply for a secured credit card. Secured cards requires you to make a separate account since your deposit needs to secure the credit risk that the bank or credit union takes by issuing you a credit card.
Most secured cards come with annual fees and high APRs, so make sure you pay your bill in full each month. When you’re looking for a secured card, it’s important to make sure that the company that issues your card will report your payment to the credit bureaus.
So after you consistently use your credit card and making a history, you should be able to get a regular credit card. Whichever bank that issued your credit, they usually will offer you a regular credit card and you’ll get the money of your initial deposit back.
Please note that a secured credit card is no the same as a prepaid card. A secured card helps you build a credit history when a prepaid card does not, so make sure you know what kind of card you’re opening.
Also note that secured cards limit your credit line to the amount of your deposit while other give you a credit line that’s higher than the cash you’ve put down. So whatever you credit line, make sure you do your best to use only 30% of that credit each month.
How to Improve Bad Credit
The amount of credit you use is divided by the amount of credit available to you is called a credit utilization ratio. Using that ratio below 30%, will let the credit bureau know that you’re capable of exercising restraint when it comes to credit. You’re less likely to max out your card and rack up debt and not make your payments.
If you have an average credit score, you may be able to get an unsecured card, so you won’t be required to make a deposit. But be aware that imperfect credit score are generally offered higher APRs.
So whatever the interest rate you have on your card, make sure to pay that bill on time. Take your time to build up a good credit history and once your score is up you can upgrade to a card that can offer you more.
Also applying for too many cards one after another and getting your application rejected can impact your credit score, so don’t be to hasty!
Now that you have learned how to get a credit card with a bad credit, you’ll realize that rebuilding a credit can be a laborious process. It’s worth the process because when your credit score is high, you can get access on great rates on personal loans or mortgages.
You can check out how to find your credit score for free here! While you’re here on HMB, you can check out the latest credit card bonuses you can take advantage of! Don’t know what kind of credit card fits your needs? Read through our credit card reviews.
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