How to Get a Credit Card If You Have Bad Credit

| Tedis Baboumian |

How to Get a Credit Card if You Have Bad Credit

There are many reasons people end up with bad credit —  from health problems, to job loss, to borrowing too much — which can lead to difficulties paying bills. Once your credit is considered bad, it can affect not only your ability to borrow money, but also your insurance rates and access to a cell phone plan. A common dilemma is how to get a credit card if you have bad credit.

What is Bad Credit?

Problems such as late payments, accounts in collections, bankruptcy, or foreclosure can have a big impact on your credit. Different lenders may have different policies on how low is too low to lend you money. Many may not lend you money if your credit score is below 630 and a score below 580 is almost always considered to be poor.

Credit Card Options for Bad Credit

While a low credit score may decrease your options for obtaining a credit card, there are still some credit card options for people who have bad credit. Cards that are geared to people trying to rebuild their credit history include:

  • Secured credit cards – One of the best ways to begin to rebuild bad credit is with a secured credit card. You’ll deposit money into an account, and your credit card account will be secured by your deposit. Typically, a secured card is a fairly small amount such as $300 to $500.
  • Subprime credit cards – This type of credit card is an option for people with credit problems. Since the lender is aware you’ve had past credit issues, they may be willing to extend a small credit line at a high-interest rate.

You may think creditors have to report to the credit bureau, but they aren’t required to do so. Before applying for one of these credit cards, find out if the creditor reports the account to the credit bureau. If they don’t, making the payments on time won’t help to rebuild your credit.

Another option is to apply for a card at a retail store, since retail store cards are usually easier to obtain than other unsecured cards. While these cards typically will only be accepted in a specific store, they can be used to build or rebuild credit.

On any card that’s geared to someone who has bad credit, the interest rate is likely to be high, and there may be an annual fee or other charges. Know what you’re agreeing to before applying for a new account.

Watch Your Credit Report

When you start working on improving bad credit, one of the things you should do is pay attention to your credit report and make sure the information on it is accurate. Errors in your credit report can impact your credit score and affect your ability to borrow.

Dovly is an AI credit engine that can help you dispute any errors you find on your credit report. Try it risk-free with our free membership tier. Get in touch with Dovly today.

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