With such restrictions in place, obtaining any credit becomes a daunting prospect, but if you look around carefully, you may be able to secure affordable credit.
Let’s explore your options and what you can do to secure credit even if your credit score is low:
1. Contact your financial institution — For consumers with active checking accounts, the first place to go for new credit is to that financial institution. You’ve already built up a track record with your bank or credit union and may receive special consideration to obtain fresh credit. If you have a steady job and have been paying your bills on time, then you have a much better chance of securing credit than the person whose work history is spotty.
2. Get a retailer card — Major credit card companies such as Visa, MasterCard, American Express and Discover may not be able to help you, but department stores such as Sears, Macy’s and J.C. Penney may be willing to extend a line of credit to you. These accounts have more relaxed credit requirements and are usually available to anyone with a steady source of income. Check out big box retailers too such at The Home Depot and Lowe’s.
3. Choose a secured credit card — Because credit cards are typically unsecured credit, lenders incur a higher level of risk with borrowers. You can reduce that risk of default by agreeing to a secured credit card, one that is tied in with your bank account. For example, if you have $800 in savings, then your credit line is offset by that money. Your savings will stay tied up until your credit improves, therefore only choose this option if your other options have been exhausted. This cards are similar to prepaid credit cards that are secured by money you deposit into your account.
4. Find a cosigner — When all of your other options are closed, you may still be able to secure credit by finding someone to cosign your account. The way this works is if you default on your payments, then the creditor can go after the cosigner for payment. That’s a big risk not too many people want to take. Besides, it does nothing to build up your credit score — you’ll have to open your own account to have it impact your score. By the way, with tighter credit standards in place, not all credit card issuers allow cosigners notes Bankrate.com.
If you manage to receive credit for a bad credit credit card, you should carefully use it and track your spending. This means you should use it only for purchases that you know you will pay off each month and on time. Maintain repayment discipline and you’ll soon see your credit score improve. With an improved credit score, your interest rates should drop and you’ll be able to apply for new credit and with more favorable terms sooner.
See Also — 7 Simple Credit Repair Tips
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- The device does not come with headphones or a SIM card. It does include a charger and charging cable that may be generic, in which case it will be UL...
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- Renewed products look and work like new. These Pre-Owned products have been inspected and tested by Amazon-qualified suppliers, which typically...
- Locked to the GSM network and only compatible with GSM carriers like AT&T, T-Mobile and Metro. Will not work with Sprint, Verizon, US Cellular or...
- The device does not come with headphones or a SIM card. It does include a charger and charging cable that may be generic, in which case it will be UL...
- Inspected and guaranteed to have minimal cosmetic damage, which is not noticeable when the device is held at arms length.
Last update on 2020-03-19 / Affiliate links / Images from Amazon Product Advertising API
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