Bad Credit

Money Talk News

Having bad credit can be overwhelming and it can feel impossible to get out. Don’t be discouraged, though. Though it’s difficult, you can rebuild your credit. All it takes is time, patience, and diligence.

One of the first steps is to establish better habits, which means obtaining a credit card to start showing on-time payments and low credit utilization. Contrary to what you may have heard, you can obtain a credit card despite a poor credit standing. But before starting your credit card approval journey, there are a few things that you should know.

What To Expect

Keep in mind that you have unfavorable credit, so you cannot just apply for any credit card. Cards aimed at people with good credit are probably not the best ones to apply for. You want to avoid being declined if you can help it.

Also, expect that cards that you have a better chance of getting approved for may require you to pay some out-of-pocket expenses. The card you get approved for may have an annual fee or it may require a deposit. Either way, you will need to be willing to pay those fees for the sake of getting your foot in the door.

Where To Start

Consider getting a secured card. A secured card will require a deposit, but will also report to the three major credit bureaus. After about a year of making on-time payments, the secured card can be converted to a regular credit card.

lso, look into applying for a store credit card. Limited purpose cards, or retail store credit cards, are easier to get for people with poor credit.

What To Avoid

You have to be cautious and well-disciplined. Getting a retail store card at your favorite store can give you temptation to overspend. It might be wise to apply for a retail store that you don’t go to often. Pay off the balance every month to show good payment history and to avoid interest.

Having bad credit isn’t the end of the world. Be patient and take the necessary steps to rebuild it. Before you know it, you’ll be able to apply for any credit card and get approved! Once you get your credit in a good place, be smart with it. You don’t want all of your hard work to go to waste.