Do you have bad credit? Are you concerned that you’ll never again be able to carry a credit card? Are you resigned to the fact that you have to find other ways to make purchases?
While bad credit limits your options, it doesn’t mean you’ll never again have access to a credit card. In fact, if you take the right steps, you may be able to move down this path sooner than you ever thought possible.
So, this leads to an important question: what’s the best way to obtain a credit card with bad credit?
While there is no definitive answer, here are some of the steps you can take:
1. Review Your Credit Report
It’s not good enough to know that you have bad credit (more on this below). You need to know why this is the case, and there’s no better place to start than your credit report.
What’s dragging your score down? Is there anything you can do about it now? How can you avoid similar circumstances in the future?
If you’ve yet to review your credit report, doing so will open your eyes. It may even give you guidance on how to recover.
2. Know Your Credit Score
Just because you have bad credit now doesn’t mean it’ll always be this way. But before you can fix it, you need to know exactly where you stand.
Request your credit score online and then get honest with yourself. Is it as bad as you thought? Are you closer than you thought to bumping up to the next level?
3. Opt for a Secured Credit Card
It’s not ideal for most consumers, but a secured credit card is a good place to start. With this, you make a deposit that acts as both your credit limit and collateral.
If you deposit $500, you can typically spend up to this limit. And if for any reason you default, the issuer has the legal right to keep the money.
Not only does a secured credit card teach you responsibility, but it also allows you to boost your score.
Tip: make sure the issuer reports all credit card activity to the three major credit bureaus. Without this, you’re not getting the benefits from a credit history and score perspective.
If you successfully use a secured credit card for an extended period of time, you’ll find it easier to eventually move to an unsecured offer.
Bad credit is frustrating as it can cause a variety of financial challenges. Even so, it doesn’t mean you have to live without a credit card.
By taking the steps above, you position yourself to better understand your situation and improve your score over time.
Soon enough, a little by little, your progress will position you to obtain the type of credit card you have always wanted.