So you are thinking about applying for a credit card or two. Well before you do that it is important that you know how credit works and the different types of cards that are out there. Having good credit can change your life because you can get approved for things you never thought you could get approved for and you can have a good interest rate as well. You can also buy homes, cars, and many other things with credit. Just make sure that you make payments on time and that you keep a good balance to avoid getting a high-interest rate.
The thing that most people do not understand is that having bad credit can cause you to be denied credit. This is because the credit bureaus have to go by certain rules and regulations. There are three major credit bureaus that are in charge of helping people get credit. Here is how you get approved with each one.
First, you need to be prepared with all the information that they want to know. This includes personal background information and any assets you might own as well as employment history. You need to make sure that everything is true so that they can approve your application. Another key factor is to have a steady job that you can show your potential lender that you can maintain. If you have been fired from a job in the past six months, then you will definitely want to wait until at least a year has passed since you were employed before you try to apply for a line of credit. Your lender is only willing to give you credit if you have been able to keep your job.
Second, you will want to make sure that you have good credit because you will be applying for credit that is only available to people with good credit. It is not as easy to get a credit card with bad credit, as it is to get one that is made for people with great credit. Even though you may have bad credit, there are lenders who still give out credit cards to people who have been turned down elsewhere. There are even some credit card companies out there who are willing to cater specifically to people with bad credit.
Last, you should know that how good credit can change your life depends on how much money you are able to put towards your credit card debt. If you have enough money to pay off your debt within the time frame given to you, then you can use a credit card. If not, then you may want to look into getting a loan that can help you pay off your bills and then start repairing your credit as soon as possible. A loan or a secured credit card is often your best option because it will not report negatively to the credit bureaus.
These are just a few tips to know about credit cards for those with bad credit. Remember that even if they might not be an ideal option at this point in time, they definitely can later. How good credit can change your life depends on how bad your credit is and how fast you are able to turn it around. If you are thinking about getting a credit card, ask yourself how badly you need one and how badly you would like it. It’s a lot better to apply for a credit card that doesn’t make you pay a ton of money than one that requires a ton of payment each month.
This post was written by Kristian D’An, owner of Lux Credit LLC and CCA board certified credit repair specialist. Lux Credit offers credit repair services for those looking to improve their credit!