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Obtaining A Credit Card - With A Less Than Perfect Credit History
By: Jeremy Zongker
If you have had difficulty keeping up with your bills, you can rest assured you
are not alone. Many people have run into trouble or a shortage of cash flow from
time to time that has resulted in the inability to make all of their payments in
full and on time. However, just because you don’t have a perfect credit history
does not necessarily mean that you will be unable to obtain a credit card. It’s
no surprise that a person with a low credit score will have more difficulty and
less options when trying to get a credit card in their name, but it is not
completely impossible because creditors do take more than just your credit score
into consideration when deciding whether or not to give you a credit card. The
important thing to remember is you do not want to apply for every credit card
out there- every time you apply for a credit card, you are further hurting your
credit rating. When you have a low credit score and a poor credit history, you
need to do your research before you start applying, and only apply to the
handful of credit cards that are designed for individuals with a less than
perfect credit history to make sure you limit the number of credit inquiries
that are placed on your credit report.
When a credit card provider is deciding whether or not to extend credit to an
individual, the lenders take several things into consideration. The credit score
is always a factor, as is your overall credit history of how many times you’ve
made late payments, and how much credit you currently have available to you, and
how much debt you currently owe. In addition to these issues, a credit card
company will also consider the length of time that the individual has been
employed at their current job, and will look favorably on people who have held a
steady job with a decent income for a long period of time. If your debt to
income ratio is manageable, meaning you make enough money to comfortably pay for
the amount of debt you currently owe, sometimes a lender can still extend you
credit even though you have made late payments in the past.
Chances are, if you’re working to improve your credit score for your future,
you’re sending as much money as possible to each of your creditors each month as
you are trying to pay down your overall debt. Because of this additional money
being sent out, there will be less money available to you on a regular basis,
and having a credit card can give you some security in the event of an
emergency. What happens when your car breaks down, or a health issue comes up
and you just don’t have the money to pay for it because you’ve been sending all
your extra money to each of your creditors? Having a credit card can be the
security you need for these emergency issues. Credit cards for individuals with
poor credit histories will almost always carry a higher interest rate than a
traditional credit card, but the benefits of having a credit card for
emergencies, or to use as a second form of identification, or even for renting
an apartment make having the credit card advantageous over not having the card
at all. Some landlords may require a credit card be on file in the event you are
late with your rent payment, so that they have the additional security of
knowing they can get their money by billing your credit card.
The most popular option for people with poor credit histories is to obtain a
secured credit card. A secured credit card allows the cardholder to make a cash
deposit on the card, and then whenever the card is used, it deducts the amount
from the amount of the deposit you made. It’s much like a bank debit card, but a
secured credit card deposit will earn interest, and help earn money when you
aren’t spending with the card. In addition, as you continue to make deposits to
the card to cover your purchases, you are helping to improve your overall credit
score.
About the Author:
This article has been provided courtesy of Creditor Web. Creditor Web offers
great credit card articles available for reprint and other tools to help you
search and compare credit card offers.
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