What effect will having bad credit have on my ability to get a credit card?
The truth is, if you have bad credit, you probably aren’t going to get approved for a credit card. If you are, it may not be a good credit card. When you are applying for things like personal loans with your local bank, you are able to speak to them in person and show them what you are doing to strengthen your credit standing. If you have dealt with them before and made payments to them on time, that is also helpful. However, when you are applying for a credit card, you do not have these factors there to help you.
All the company is going to look at is your credit file and make their decision to either extend a line of credit to you or deny your application.
However if you need a credit card for things like purchases over the internet then there are two possibilities for you; i) you may be able to obtain a prepaid credit card, which is simply where you put in an amount of credit from your savings account or ii) or 'debit' credit card where it directly links to your bank account.
If you have ever been late with payments or had judgments or collections against you, all of this is going to show on the credit file. Also, if you have been applying for many credit cards, those are going to show up as well. All of these things look bad to a company, and anyone who looks like they might be irresponsible with their money or the credit they currently have, isn’t going to get a card.
The best possible scenario is one in which you dedicate several months to bringing your score up by making sure that all payments are made on time, and that you do not apply for any credit during this period. However, this is real life and many times people need money immediately. In those situations, there are credit companies out there that will extend credit to you.
But you must realize that you will not have a very high credit limit and you can expect to see very high interest rates. If you do not exceed the predetermined limit, and you pay your bills on time each month, you will see credit offers coming in through the mail. That is a way to tell that your credit score is coming up, and that better companies would give you credit. While this is a great thing to see, it is wise not to respond to any of those offers until you are ready to stop using the smaller card with higher rates and move on to just one better card.
This is the tricky part because it is at this point where people start getting credit cards left and right and really get in over their heads.
The best thing you can do is start working on strengthening your credit score before you need to ask for credit. If you can do this, you will see higher limits, and much lower interest rates.
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