Getting approved for a credit card can be difficult without a positive credit history working in your favor. It’s a Catch-22: To obtain a credit card, you need a good credit history. But to have a good credit history, you need to establish good credit!
This no-win cycle can keep people with a non-existent, limited or negative credit history from getting approved for a credit card. But it doesn’t have to if you understand the type of credit cards available and how to build a good credit history.
When it comes to credit cards, the type of card you apply for will depend on your situation. If you’re a student, you’ll, naturally, sign up for a student card. But if you’re a non-student with a non-existent or bad credit history, a card that is secured or obtained with a co-signer may be your best option. With co-signed credit cards, the co-signer guarantees and is responsible for the debt. This means that the co-signing person is responsible for paying the full amount of the debt if the card holder doesn’t pay. In fact, when co-signed debt goes into default, three out of four times co-signers are normally asked to repay what is owed, according to the Federal Trade Commission.
Furthermore, the issuing bank can attempt to settle the debt without first trying to collect from the card holder. The bank can also use the same collection methods against the co-signing individual, including suing and garnishing wages. If the debt is not paid, it can leave a negative mark on the credit history of the co-signer, as well as the card holder.
Despite the risks, a co-signed credit card can be great tool for helping a friend or relative build their credit history so they can one day obtain a card on their own. Secured, co-signed and pre-paid credit cards offer viable options. But you should start building a strong credit history, so you can obtain a regular credit card on your own in the future.
First, you need to understand how credit card issuers determine credit worthiness. The approval criteria varies from among issuing banks, but generally relates to what’s often called the three C’s of credit: capacity, character and collateral. Capacity refers to your ability to pay based on your income and existing debt. Collateral refers to any assets you have that can secure payment, such as bank accounts or home ownership. Character refers to factors like your payment history, length of employment, etc.
To get a good idea about how your application will fare with credit card companies, check your credit history with one of the major credit reporting agencies: Experian (www.experian.com), Equifax (www.equifax.com) and TransUnion (www.tuc.com). These agencies access your payment information directly from the companies you have credit with, as well as from government agencies such as the legal court system.
Credit reporting agencies use the information in your credit history to determine your credit rating or credit score. Credit scores, also known as FICA or Beacon scores depending on the CRA, generally range from 350 to 850. Most banks will approve you for credit if your score is at least 620. If your rating is 720 or higher, banks will offer you their lowest interest rate.
Generally, y our credit score is determined by your payment history for the last two years. T echnically, CRAs calculate your score using a closely-guarded formula. TransUnion, for example, determines credit scores using a variety of factors, including: how you pay your accounts, how much you owe and how often you’ve applied for credit.
www.credit-cards-rates.co.cchttp://www.credit-cards-rates.co.cc/
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Apply for a credit card with bad credit by getting a friend or relative to add you as an authorized user, fill out a co-borrower application or get a secured credit card account. Reestablish credit and get a credit card with bad credit usingtips from the vice president of a bank in this free video on credit counseling. Expert: Stephen Fawehinmi Bio: Stephen Fawehinmi is the vice president of business banking at the Bank of Nashville in Nashville, Tenn. He has been a lender for more than 10 …
Help answer the question
How do I get a Business credit card with bad credit?
I am trying to consolidate my bills and get my credit clear so I can start a business.I have very,very bad credit and I am tryiing to start a business. How would I get a credit card for my business with extremly bad credit. And who will except me?
bad credit card
It will be removed seven years from the date that it occurred. If you check your credit report then it will tell you the month and year that it will be removed. Oh, by the way, you are in titled to one free credit report from each credit agency every year. Here is the link below to do this. Also, it is a good idea to monitor your credit reports. If you find anything suspicious report it immediately.
http://www.ftc.gov/bcp/conline/pubs/credit/freereports.htm
It's all tied to your social security number. Business doesn't matter.
Before you do ANYTHING listen to this. Scroll down and click "Listen to Dave". JUST LISTEN.
http://www.daveramsey.com/tdrs/index.cfm/2007/9/17/Getting-rich
This one audio clip of his CHANGED MY LIFE when I heard it.
Listen to this man for free, on the radio or online. This is like getting financial wisdom from Bill Gates except this guy has a national radio show.
Wow, I am blown away at the lack of real information out on the web. The authorized users method has been dead for years. The reporting agencies are not rating them anymore. Stop the lies, I help people free everyday. My husband and I were in the collection business for 15 yrs before getting into the mortgage business. We see bad credit everyday. We can look at your report and educate you on the things you need to do to better your score. Most times it may cost $200-$300 (not to us) to start.
I am an authorized user on my wifes credit card that she added me to after having it several years, the creditor has been reporting on me ever since I was added.
I can understand why you'd what an unsecured credit card. The title itself implies you don't have to put down any of your money. This of course is very misleading.
Stay away from unsecured credit cards for bad credit. It's true; in most cases you don't have to put down a dime..but when you get your 1st bill…you'll most likely see a very large annual fee. I've seen "unsecured" credit cards with an $150 annual fee.
I just think a secured credit card is better. At least if you ever close it, you'll get your deposit back. With the unsecured credit card for bad credit, your annual fee just goes to the bank.
I do agree with a previous author. The Orchard Bank secured credit cards are pretty good ones. You may also want to try First Premier Bank. For people with bad credit, they have reasonable annual fees and pretty low interest rates.
I used to have bad credit..and I had the Capital One Secured Card. It had a low max balance $300 but I always paid my bills and eventually, they sent me an application for the Cap One Platinum card. This had a $10K credit limit.
The moral of the story is get a secured credit card from a reputable bank. Pay your bills online..maybe one day they'll offer you a better credit card.
Go to your local credit union and make a deposit. Apply for a secured credit card in an amount = to your deposit. You will be able to use and make payments on the card like a normal card. Your funds will be on hold as collateral against the card. If necessary, you can pay the card off with the funds. It takes about 10 business days to get the plastic, so be aware this wait could intefere with your time-frame and plan accordingly.
i work for a major canadian bank in the credit deptartment, and haved worked in other financial institution before all in credit, first of all auth user are never reported to the credit bureau, there legal contract that binds them to the card says clearly that only the primary is liabal and he only will be reported to the credit bureau, co-ap theory is valid if you are the primary and someone is co signing to become co-ap with good credit to support your application, secured crdit is the best
It’s not about that, it’s about having good credit so you can maybe some day be issued a credit card or if you need a loan for a house. Not everyone has 50k laying around….
Have you tried contacting the company to try and get the derogatory taken off? If they can’t or won’t do it then you have to wait 7years or so from the time it was reported as a derogatory before it will be removed. The credit game sucks.
Try http://www.applyforcarloan.ca/apply_online_secured_credit_card_mastercard_canada.php
They offer what is called a secured credit card. Basically send them $500 or more, and they send you a Mastercard, with the same limit. 99% of people get approved for these types of secured credit cards. They still require you to make payments when you use it, but the great thing is it will build new credit, or rebuild bad credit!
Wow you are very informative rapmasterjim. I never thought about it that way thanks!
So You can get terrible credit and then in 7 years its back to neutral?
search the Internet for "secured credit cards", and then read up on them in consumer magazines like Consumers Union and Consumer Reports.
You put money in an account and replenish it as you use the money, they report you PAID AS AGREED.
You need three of them ($200-300 each is OK), and then get some major retailer and gas cards and build your way up from where you are,
Also negotiate with your derogatory accounts and try to get them to remove, or at least soften, the negative information you already have on your accounts.
Check out Capital One. I was approved four months out of chapter 7. The link will show you all that they have to offer, is set to "credit needs improvement", check the other tabs if you think you might qualify. If you are approved it will be no less than $300, and when you make your first 3 payments on time they bump it to $500. Has a fee of $19, billed at close of first monthly cycle, then yearly.
Those "load as you go" cards are secured cards, and you have to have absolutely horrible credit to go that route. If I had $300-$500 to set aside as a deposit and sit on it for a year, plus pay the fees associated with opening an account, just in hopes of getting a un-secured card for $300-$500 a year from now, I would go open a CD at the bank and let it build interest. The bank would be more apt to give you a loan in a month or two, especially if you pledge the CD, and let the lender know you are trying to build your credit – with their services.
From my understanding, yes. I had some derogatories and I expected them to be gone after paying them off, but then I found out about the 7 year rule. My derogs were from 1999-2001. They’re all gone now. It’s like they never existed. I marked the days on the calender to know when they were supposed to go away, the following month I checked my credit report, if it was still there I contacted the company to tell them to take it off. I also celebrated the day the dreogs were taken off. =)
Actually, it's a short story. No one else wants to stick their neck out (co-signing) to cover your debts after you have shown little ability to handle your own affairs. They will be 100% financially responsible if you default on your debts and they know it. Operating a business is like operating your own financial affairs on steriods.
Who in their right mind would start a business on credit card with up to 32% anual interest? That is a very large nut to crack on top of paying for employees,your wages, materials, rent,phone and lights…. then look for making a profit too???
Tell me what kind of business you are going into that has a 32% profit after all expenses and I will start one in a heartbeat (as long as it is legal to do so)
Maybe you had better sit down and work out a business financial plan… then work towards fulfilling it and obtaining the capital you need by working and saving the start-up funds… then someone might be willing to listen to your business idea. If you don't believe in yourself then others will not believe any differently. There is no shortcut to success. Those who cut corners are the first to fail.
Response to additional details:
The most probable way you will get a card is with that much money in their account. Your credit limit will match the amount of money in the savings account held by the credit card company. That way you can start building up a history of purchases and paying the bill on time. You have to re-establish a history of being reliable. After a couple of years of a spotless record, you may find someone who is willing to issue you limited credit and further build from that. I know you are looking for a fast way to do this…. sorry probably not going to happen.
I am not trying to beat up on you… I am trying to show you how others (creditors and co-signers) will look at this. Even if you have lost your job,any work is better than none… even fliping burgers. 10 G's is not an undoable amount but it might take you 1 year to get there working minimum wage. Hopefull you will do the numbers and see that if you are holding 10Grand worth of debt on a credit card, your whole business profit will go to support the debt and you are working for nothing.
If you were an engineer then you are used to solving problems with a systems approach and a thorough evaluation. It doesn't sound like you are using your formal education on this new problem. Please write up a plan and look at all the issues systematically. Form a feasable plan and go after your dreams.
Hope that helps
thanks for the info, i am from montreal do you know or have any contacts for credit in montreal?
Why dont you try getting a Visa Debit Card from your bank.
It's like a Visa card but you only spend what you have in your checking account.
You need to really build your credit back up so maybe get a secure credit card and work your way up to unsecured.
Below is a website that can give tips on how to fix your credit. Good Luck