The fact that you have a bad credit history doesn’t necessarily mean that you can’t get a credit card.
In actual fact, there is a class of credit cards known as bad credit cards, which are exactly meant for people in that circumstance, and through which you actually get a chance to improve your credit rating.
These bad credit cards come in two main varieties, namely secured and unsecured bad credit cards.
The difference between the two is in the down payment requirements, in that to get a secured bad credit card you have to part with a down payment (deposit) whereas to get the unsecured variety you are not required to part with such a deposit.
Obviously, the unsecured bad credit cards are riskier to the issuers – and are consequently charged a higher interest rate than the secured bad credit cards, which are in turn charged a higher interest rate than the ‘good’ credit cards.
Of course, to qualify for the ‘good’ credit cards, you would need to improve your credit ratings – and wise use of the bad credit cards available to you is one of the best strategies you can use to improve your credit ratings.
By submitting your bad credit card payments on time and maintaining low balances on the card, you can use the bad credit card you have to improve your overall credit rating.
Timely submission of credit card payments and maintenance of low credit card balances both show that you are a creditworthy borrower.
For instance, in addition to saving you from the penalty of late fees, submitting your credit card payments on time shows that you have a tendency to pay your debts as they fall due, which is one of the hallmarks of creditworthiness, and which can give your credit rating a big boost.
Maintaining low balances on your credit cards on the other hand shows that you can use credit responsibly, that is, you don’t abuse the credit facilities extended to you. This can be another big boost to your overall credit rating.
And while working to improve your credit ratings, you should minimize your credit inquiries (which are made to the credit bureaus by the potential lenders you approach).
Minimizing credit inquiries further demonstrates responsible use of credit (that is, you don’t just go for credit because it is available) and raises your creditworthiness even higher, which is reflected in your credit rating.…