How does it feel to be able to purchase things without worrying about cash? Imagine yourself strolling inside the mall then suddenly a dress caught your eyes. You want to buy it but your pocket is empty. Perhaps, your only choice is to borrow and what can be done using your credit card. Your credit card can be used to pay for your purchases and other items. Isn’t it rewarding? You do not need cash on hand to settle your bill.
But what if you don’t have a credit card? Then you plan to obtain one. However, your bad credit hinders you from getting a credit card. So, what should you do? Are there credit cards for bad credit? To tell you exactly, you are not alone in this kind of dilemma. A lot of people are in the same shoes as you. Some of them were able to successfully get a credit card while some have been trying countless times.
People with bad credit especially those with a score below 580 are not prohibited to get a credit card. They do have ways to acquire one yet with the fewest options as possible. That’s because only a few card issuers want to take risk of raising the credit limit they may not get paid for. As Canadian credit conditions get tighter, the harder it becomes to secure a credit card when you have poor credit. Nevertheless, do not lose hope.
Regardless of how “poor” your credit was, still there are credit cards available for you. They come in two forms: secured and unsecured. The difference between the two is that there is no need for unsecured cards to have a deposit to open a line of credit, while secured cards do. The amount of the deposit may vary but it is usually equal to the amount of the credit issued.
How to get a credit card with bad credit?
Having bad credit makes it difficult for you to secure a credit card but it is not impossible. It’s just that the process to get one is a daunting task because most issuers are likely to deny the credit application. The lower your credit score, the harder the approval is but not completely hopeless. There are necessary steps to help people with bad credit. Here are a few:
Know Your Credit Score
When applying for a credit card, you must know exactly what your credit score it This is for you to see exactly where you stand. You may request a report of your credit from a credit reporting company such as Experian, Transunion or Equifax. Canada’s Federal Law obliges each of these companies to provide you a free credit report once every twelve months. But you need to ask for it. Once you know your credit score, you will have an idea of whether you are getting high chances of approval or not. Higher credit score means big chances to get approved. If you’ve got bad credit, then you can work on the credit card application aligned with your poor credit score.
Look for the Best Credit Cards for Bad Credit
It is important to look for the credit card best suitable for your bad credit. There are two forms of credit cards for bad credit: unsecured and secured. You may choose either of the two. Choose a credit card that helps you rebuild your credit score, lesser fees, and other favorable items for you.
Fill out an application
Once you’ve done the first two steps, you may now proceed with your credit card application. Fill out the form with your necessary details. You will be asked to choose the credit card you want. Select that card which you think is best for you. Submit your application after filling everything out.
Approval for a credit card application usually doesn’t take long. But for those with poor credit, it may take a while as issuers are stricter than those who have good credit. So wait for the results of your application. If you are denied, do not lose hope. There can be other ways you can do to get approved. The issuers will typically advise you what to do and you just need to comply with whatever those things are.
Can credit cards help to rebuild credit?
Credit cards are a useful tool to help rebuild your credit. As long as you do not make any late payments, and you can pay your other financial obligations, then you’re good. Missed or late payments contribute to your poor credit score. That’s why you must be responsible enough and use your credit card wisely. If you fail to responsibly use your credit card, you might get an accumulated amount of credit that you may not be able to pay. It will then result in a much lower credit score. So, avoid doing things that will have a bad impact on your credit.
Types of credit cards for bad credit
Credit cards for people with bad credit come in two forms: unsecured and secured. You may choose either of these two:
Unsecured credit cards
These cards do not require any security deposit to get approved or get an increased credit limit once approved. These cards are the most common type of credit cards as they are not secured by collateral. The lenders do not have direct hold to the property once the cardholder fails to pay.
The drawback here is that unsecured credit cards come with higher interest rates and fees. But if used wisely, it can help rebuild your credit score. Your credit history, financial strength and earning potential will be viewed by issuers to know whether you qualify for unsecured credit cards.
Secured credit cards
These cards require security deposit unlike with unsecured credit cards. On the other hand, since the deposit serves as collateral, the credit card issuer has direct hold to the deposit to cover any defaulted payments. Because the card applicant is considered a credit risk, the deposit was a necessity.
Getting a secured credit card also usually get faster approval than unsecured ones. The reason is that there is no risk from financial establishments. Only when the default happens, the lenders will not return the deposit. The issuers of secured credit cards report to the three major credit bureaus, so the responsible use of the credit card greatly helps in rebuilding and improving credit scores.
Where to find a trusted credit repair company in town?
There are numerous credit repair companies in Canada, especially in Toronto. But, if you want to fix your poor credit, you may choose to contact Credit Repair Now. We have a team of expert brokers who are willing to assist you with your credit concerns. We can also help you secure a credit card suitable for your current status. Just set an appointment with us so we can work on rebuilding your credit.
You may contact us through our contact number +1 647-373-9651 or send us an email at [email protected].