So . . . you can't get credit?

By
Real Estate Mortgage Broker with National Credit Fixers - Matt Listro

You practically can't get by these days without a credit card in your wallet - you can't book a flight, rent a car or get a decent hotel room without the presence of plastic.  The problem that people with poor credit scores have is that it can be difficult to get approved for a good credit card with a low credit score or without a solid credit history.  This doesn't necessarily leave those with low scores out in the cold, but many of the options available have some less than favorable associations that you may have to deal with.

If your only desire is to be able to make online purchases or book a flight and you don't have a whole lot of concern for improving your credit score, you could opt for a pre-paid credit card.  A pre-paid credit card will work in the same fashion as a traditional credit card, but you only have access to the funds that you have put on it - it won't to anything do establish your credit history or work to raise your credit score.

A secured credit card is similar to a pre-paid in the fact that you need to put money on the card prior to using it, but it will give you a bit more in the way of freedom than a regular pre-paid card.  A secured card will often report to the major credit bureaus so you can actually start building new or rebuilding damaged credit.  A secured card is a great option for someone just starting out building their credit history or for someone with poor credit who has the initial minimum to lay down to secure the card and who doesn't want to deal with excessive interest rates.

There are credit cards specifically designed for people with low credit scores and these "bad credit" credit card can actually be a blessing for people who want to slowly rebuild their credit and have a little bit more freedom than they would with a pre-paid.  The pitfall of "bad credit" credit cards is that they often have low limits and exceedingly high interest rates - the low initial limit may not be a big deal for most, but if you don't plan on keeping up with your payments and paying off the balance every month, the high interest rates can be a tough pill to swallow.  If you charge more than you should or fall behind on your payments, a credit card with a high interest rate can result in you paying hundreds or even thousands of dollars more for an item or service over the course of time it takes for you to pay it off.

If you want to obtain credit and you currently have a low score or little history, you need to weigh the pros and cons carefully prior to deciding which option is best for you.  Credit is available to even those who have made mistakes in the past, but choosing the wrong option can have you in an even worse situation than you were before if you aren't careful.

Matt

Toll Free: 888-NCFIXER (623-4937)
Toll Free Fax: 888-FAX-4020 (329-4020)
Local: 860-282-6181
330 Roberts Street 4th Floor
East Hartford, CT 06108

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Topic:
Real Estate Sales and Marketing
Location:
Connecticut Litchfield County Harwinton
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Cosmic Cow Pie...The Rome Way
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