Having a low credit score makes it hard to get approved for a credit card from a major bank. Fortunately, you still have some options even with poor credit.
People with bad credit—usually have the fewest options for credit cards. That is because few credit card issuers want to take the risk of extending a credit limit they may not get paid for.
The lower your credit score, the harder it will be to get approved for a credit card—but it is not completely hopeless. There are options out there for those with bad credit.
Credit cards often have high interest rates and extremely high fees that make credit unaffordable. A lot of people find themselves right back in debt with damaged credit after trying to rebuild with one of these types of credit card
To build new credit, you must replace your credit-damaging spending habits with some new, better ones. Otherwise, you will end up back where you have worked so hard to get away from.
Don’t apply for too many credit cards at once. Each application affects your credit score, making it harder to get approved for another account.
You should also avoid prepaid credit cards as a means to rebuild bad credit. While you can get a prepaid credit card regardless of your credit history, they don’t report to credit bureau — because they are not credit cards. No matter how responsible you are, using a prepaid card won’t help your credit.
If bad credit has left you except any credit cards, you will have to get at least one new account. Many people swear off credit cards after awful credit, fearing that new credit cards will only get them into hassle again.
However, heading off credit score card makes it extra hard to rebuild your credit. Using a credit card the right way will assist you establish a positive payment history and put you on path to building a higher credit score. according to www.thebalance.com.
Getting rid of the negative credit report information and catching up on past due bills is the best way to start rebuilding bad credit. To increase your score to a level high enough to get approved for credit card and loans and qualify for better interest rates, you will have to go beyond these initial steps.
You will have to prove to new creditors and lenders that you can handle credit responsibly and won’t default on new applications if you are approved. Getting started rebuilding your credit might be difficult, but once you build momentum, you will be coasting your way to a good credit score.
How to Build better credit habit
Improving your credit score is a good goal to have, especially if you’re planning to apply for a loan to make a major purchase. follow the below steps to build a better credit score.
1. Remember, your old bad habits led to bad credit. Improve your spending habits and you will improve your credit score.
2. Live below your credit limit and paying your credit card bills on time, preferably in full.
3. Replace bad credit with good credit
If practice really does make you perfect, the next step is to put your good credit habits into practice. Your bad credit won’t improve until you show your creditors that you have what it takes to build a good score.
That means charging only what you can afford and paying your bill on time each month. During this rebuilding period, don’t take on too many credit cards because it can get hard to manage your balances and payments. One or two credit cards,are plenty to get you started.
4. Pay everything on time
Payment history is the most important factor for rebuilding your credit. Even if a payment is not regularly listed on your credit report, it can eventually wind up there if you fall behind on payments. Avoid delinquencies on any accounts.
5. Know your credit score
You probably know you have bad credit because you have previously applied for a credit card, loan, or other credit-based service and have been denied.
It is advisable to use Credit Monitoring to Track Your credit score
Avoid applying for credit cards aimed for people with high credit scores just to see if you can get approved. You are very likely to be denied and the additional applications can damage your credit score even more.
Beware of subprime credit cards, that charge high upfront fees that take up most of your credit limit.