If you have a bankruptcy or other derogatory item on your credit report, it?s important to find ways to rebuild your credit. Credit cards can be a great way to do this, as long as you can make your monthly payments on time.
If you decide that obtaining a credit card is a good option for you to start rebuilding your credit, there are a few tips that you can follow to ensure that you go about it wisely and ensure that you get approved:
Secured credit cards are a good way for consumers with less than desirable credit to obtain a credit card because these cards require a deposit up front so applicants are more likely to get approved. The deposit can usually range anywhere from $95 to $300. The deposit on a secured card is usually refunded if you close your card with a $0 balance. Beware of credit card companies that require a deposit up front before you even get approved or those that don?t offer to refund your deposit once you?ve proven you?re capable of paying on the card.
Even though most of the mail offers you receive to obtain credit cards claim you are pre-approved, this doesn?t always mean that you?re going to get approved. However, if the card offer says that it?s for people with bad credit or no credit, it?s usually more likely that you will get approved for the card. So hang on to that ?junk? mail in these cases, then take a look at the terms, APR possibilities and check for any hidden fees. Then, select the one that sounds like the best option and apply.
An obvious way to obtain a credit card with poor credit is to run your credit yourself and try to clean up any blemishes that you can on your own. You are entitled to one free credit report per year from each of the three credit bureaus, which you can obtain at www.annualcreditreport.com. If you see items that you can realistically arrange to make payments on, making payment arrangements will help you improve your credit as long as you are on time with your payments.
Some credit card companies will offer for you to apply over the phone, which is a great idea if you want an opportunity to explain why your credit got so out of hand. Sometimes it?s a layoff from a job, high medical bills or other circumstances that are really beyond your control and in some cases, credit card companies will take these circumstances into consideration when reviewing your application.
Your banking institution is one of the most likely places to approve you for a credit card. They are aware of how much money goes in and out of your pocket each month and can typically tell if you pay your bills on time. They?re also more likely to consider you less of a risk since you bank with them.
If you?ve exhausted all of these options and still can?t get approved for a credit card, maybe now just isn?t the time. Work on cleaning up your credit a bit and then try, try again.
About the Author: Deborah is a full-time writer with a passion for personal finance, bankruptcy, credit repair, and more. She is also a regular contributor at CreditLoan.com.
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