Having less than stellar credit happens sometimes by unavoidable events and sometimes because the consequences are not understood what it can mean.
Once a person’s credit has been tarnished it can be difficult to restore it, but not impossible. Some people may believe a credit card is the last thing they need when their credit is damaged. The fact is easy approval credit cards can help restore good credit over time and a credit rating can affect more than the ability to get credit cards. Often renting an apartment or home and when buying a home credit plays a role and other things in life.
Different Choices for Credit Cards
There are some credit card options to help rebuild credit ratings since having damaged credit a regular credit card will not be approved. These credit cards fall into two options secured and, unsecured cards some companies provide both choices. The unsecured credit card generally has a low limit and is easy approval credit cards. The way to handle this situation includes:
- Checking your credit report and scores. Free copies can be obtained from the three main credit bureaus, Equifax, Experian and Transunion once per year under the Fair Credit Reporting Act.
- Look at the top credit cards for less than perfect credit. Read the terms and conditions carefully since this is where it will explain the amount of interest and processing fees charged to the card annually.
- These are the top easy approval credit cards offering quick approvals w/ bad credit, which means a card can be applied for on the company’s website and receive an answer of approval or denial quickly. If approved the credit card will be mailed within a short amount of time to the address you provided.
- If the credit reports show a recent bad credit history of late payments or a bankruptcy the choice may be limited to a secured credit card. This is a card that will work like a debit card requiring money to be deposited before the card is issued and to be reloaded when this amount is spent. These cards often have a monthly fee or may have a high-interest rate so it is important to read the fine print before selecting one. This type of card it is best to choose one offered by a company that also offers regular credit cards so over time while improving your credit rating the company may offer an unsecured card. This first offered card may still have a high rate of interest, but continued use and full payment of charges will continue to improve the credit rating until it is possible to get easy approval credit cards from the company with a low-interest rate.
Changing Credit Ratings
Obtaining credit cards w/ bad credit history can change a credit rating if the card is used regularly and the payments made for the full amount of the monthly statement or the full amount of the purchase. Doing this it is best to use the card to purchase regular monthly items that can be paid off immediately in full rather than a large purchase. This will help in two ways; the payment history will be reported regularly to the credit bureau reporting agencies. The second thing this will do is to keep the interest rate that is paid lower. Over time as the credit rating increases the same company the cards are issued from may offer a lower interest rate because of a prompt payment history. Issues to remember when fixing bad credit:
- Keep balances low on credit cards to avoid “revolving credit” this higher outstanding debt can affect credits scores.
- Do not close unused credit cards, because this will not raise the credit score.
- Do not open numerous credit cards, since this can lower the credit score. Instead, read the terms and conditions and choose one card to apply. In cases of bad credit, there are some cards offering quick approval.
- Reestablishing credit histories takes times, but can be done by responsibly paying credit card charges in full after each purchase.
- After getting credit cards w/bad credit, if the limit on the card is $1000 you should not go out and charge $800, instead it should be used for small purchases that can be paid in full every month. This way it shows the ability to pay on time and is not in an amount that may be difficult to pay off or carry the interest over from month to month.
Thinking that avoiding having a credit card will help raise credit scores does not actually help because over a number of years the bad credit may go away but then it changes to having no credit. That, in fact, is often worse than bad credit because companies issuing credit cards may not want to take the risk because the person applying has no payment history. Often they will need to use the same method as a person with a bad credit rating.