If you have a low credit score, then getting a credit card will be very difficult. This is because most credit card issuers don’t want to take the risk of loaning a credit card they might not get paid for. But if you are facing the harsh reality of bad credit, you are not completely hopeless. You can get a credit card even with your bad credit rating, though it can be very hard.
Interestingly, if you have bad credit and secure a credit card, you can use the new credit card to establish better debt management skills and, most importantly, repair your damaged credit rating. Would you like to repair your credit card history by applying for a new credit card, even with your bad rating? Then follow these steps to achieve that goal.
How to Apply for a Credit Card with Bad Credit
Table of Content
1. Reshape your financial life
Though the idea of getting a new credit card and start repairing your credit rating might be tempting, don’t rush at it, or else you can end up adding more insult to injury. Before applying for a new card, you must ensure that you are in full control of your finances and that other areas of your financial life are in shape. This entails keeping an open checking account in good standing. If possible, you should maintain a saving account to improve your credit appearance.
If you have been cut off your previous credits due to late payment, you need to take some time to make amends by paying your bills on time. In addition, you must avoid any situation that will reflect negatively upon you and your credit situation, including repossessions and foreclosures. Before applying for a new credit card, ensure that you can pay off any outstanding loan payments to keep repossession off your record.
2. Check your debts
You will find it difficult getting a new credit card if you have outstanding debts. Even if you owe a small debt at a hospital or other service provider, this will harm your chances of getting approved for a credit card. So, keep track of all your debts and pay them off. And confirm that you don’t have any other accounts that have been turned over to a collections agency.
In addition, you must review all the sections on each of your three credit reports. If there are any inaccuracies, you should file a dispute with the credit bureau. If the information is truly inaccurate, it will be removed from your credit report.
3. Keep your job
When you are in financial mess, leaving your present day job for a better paying offer might seem intuitive; but this can come between you and getting a new credit card. Banks and other credit card issuing companies like to see that you have a consistent form of income before they risk their credit on you. The longer you have remained in a single job position, the brighter your chances of having your credit card application granted.
4. Apply for a secured credit card
Traditional credit cards are unsecured ones, which means you don’t have to attach a collateral to the credit. The issuing company only banks on your income and credit history. But there are also secured credit cards, which require collateral to set them up. Collaterals are required for secured credit cards because they are usually issued to people with bad credit.
If you are battling the problem of bad credit, you won’t be able to get an unsecured credit card, which leaves you with the sole option of applying for a secured credit card. After getting the card, keep the account in good standing by making regular, on-time payments. This should help improve your credit.
When applying for your new credit card, portray yourself in the best light. Despite that the company doesn’t need to consider your credit history before issuing an unsecured card, they still reserve the right to deny your application–and they really can—due to the state if your credit history. So, if your credit troubles were due to a job loss, illness, or death in the family, new child support obligation, recent divorce, or other issue, be sure to mention this in your application.
Additional tips for applying a credit card with bad credit
- Don’t waste your time applying for credit cards meant for people with high credit scores “just to see” if you can get approved. You won’t. And additional applications can cause further damage to your credit score.
- Beware of subprime or fee harvester credit cards that charge high upfront fees, which will end up taking up most of your credit limit.