How To Get A Credit Card When You Have Bad Credit
So you have a bad credit score and wonder whether you stand a chance of getting a credit card. Though this is not ideal, bad credit is by no means the end of the world. You can still apply and get approved for a credit card. That said, you certainly need to do your due diligence before asking the bank for a second chance. Read on to find out how to get a credit card even when you have bad credit.
1. Know Your Credit Score
Your credit score influences the credit card issuer’s decision with regards to your application.
Even though you know that you have bad credit, have you considered how bad it is?
Typically scores are classified as the followings:
- 300-629: Bad credit
- 630-689: Average credit
- 690-719: Good credit
- 720 and up: Excellent credit
Assume that you’re in the 300-629 range, but exactly where do you stand?
There are different credit scoring models, with FICO scores being the most commonly used by lenders when accessing applications. You can purchase your credit score directly from FICO or obtain free credit reports via Credit Karma or Quizzle.
2. Pay Off Your Debt
About one-third of your credit score relies on your repayment history or how many loans you already have.
The key is to show that you have consistently met the month repayments over a good period of time. In addition, you need to demonstrate that you’ve been making more than the minimum monthly repayment. Otherwise, it’ll be hard to convince the lenders that you can repay the debt.
There are different ways you can pay off your debt faster. Seek help from an expert if you’re not sure which repayment plan is right for you.
3. Get A Full-Time Job
This applies to individuals who are currently unemployed, working part-time, or contractors with unreliable, unstable sources of income.
So unless your annual income meets the minimum repayments for a card’s credit limit, you won’t stand a good chance of getting a credit card. You should wait instead of going all in and damaging your credit score even further.
If you earn some money besides your full-time job, include it on your application. That said, don’t overstate your income or give false information. This will only do you harm — you might even get charged with credit card fraud.
4. Start Saving Today
Saving tells lenders a few things about your spending habit. Any instances of overdraft or direct debits that have been rejected due to insufficient funds won’t look good to credit card providers.
Try to save a small amount of money each week. This demonstrates your financial capability to repay a credit card if your application is approved.
A Final Look at How to Get A Credit Card with Bad Credit
Being rejected for poor credit is certainly not in your best interest. But there’s no need to overly complicate and worry about the situation. Make sure you do your homework and have a thorough plan before you approach a credit card provider again.
What’s your take on this? Share your insights in the comments below.
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