More Opportunities Arrive For Borrowers With Poor Credit
If you have previously filed for bankruptcy or have a substantial bad credit rating, filing for a loan or mortgage, applying for a regular credit card or even a mobile phone hookup can be very frustrating. Your credit score hugely affects your every lending transaction. The lower the credit score, the lower the loan limit and the higher the interest rates on credit cards, mortgages, car loans and other lending transactions. In credit card applications, people with bad credit ratings may find utmost difficulty in acquiring approval. Though people obtain bad credit ratings for many different reasons, the truth remains the same: most banks and credit card companies simply do not have the confidence to bestow on someone who has a record of instability when it comes to paying for debts or loans. Difficult as it may sound, bad credit ratings do not qualify one for some of the very best credit card varieties there is in the market. You may lose low rates, high limits and other desirable benefits but the fact remains the same, it is still possible for you to get your hands on a credit card which can help you re-build your ideal credit mark.
Education is the Key
Before diving into anything drastic, one must learn first what a credit score is and how it can build up future credit references. Usually, a credit score is a three-digit number ranging from 300 to 850 directly resulting from the analysis of your credit report. The factors affecting your score is payment history, debts owed, credit history length, new credit and the utilization of certain types of credit. A routine “soft inquiry” on your credit score standing can prove to be very helpful. These routine checks may sound unbecoming especially when you do not have any outstanding debts at hand or any plans of taking a loan whatsoever. However, when you have bad credit history, making quarterly checks on your credit standing can amicably give you ample of opportunities to identify and dispute whatever inaccuracies you may come across. And this can be a positive way to counteract your bad credit standing from further deterioration.
Unsecured vs. Secured vs. Prepaid
There are three types of credit cards—unsecured, secured and prepaid. For people who are known to have bad credit marks, unsecured credit card lines are simply hard to come by as these requires credit scores of 650 or higher. The reason for this is because this type of credit card does not require a deposit for you to qualify. For secured credit cards, however, substantial deposit is required to serve as collateral or guarantee. This collateral is held by the bank or the issuing credit card company until such time that you close your account in good standing. Prepaid credit cards are making waves nowadays in the free market. People, whether in good credit standing or not, can qualify for this type of charge cards. By transferring or loading money from your account to your prepaid credit card, you can conveniently use it to your heart’s content. Normally works like any regular credit cards, prepaid variety ensures that you get to control your expenditures in such a way that you cannot overspend beyond your reloaded limit.
The Right Actions
Positively counteract upon bad credit rating with good credit standing. Using of prepaid credit cards duly credited by credit bureaus can be your best shot in upgrading your credit score. Demonstrate and re-establish your expertise in handling your credit standing. The sooner your credit score improves, the greater your chances in snagging the credit card of your choice—the one that has all the ideal perks that you wish to enjoy.