If you have bad credit, then you are probably wondering what kind of credit card you can and should get. Although they may not always be easy to find, credit cards for bad credit are available. And contrary to popular belief, even those with poor credit and no credit have options when it comes to credit cards. This article will explore those options so that you can get on to rebuilding your credit right away.
The first type of credit cards for bad credit are secured credit cards. These cards are available to almost anyone, even individuals with a record of bankruptcy or very bad credit. This is because these cards are of the prepay variety. When you are issued a secured credit card, you make your own deposit that becomes your credit line. And if you use your card wisely, you might be eligible for credit beyond your deposit.
The second type of credit cards for bad credit are high interest credit cards. These cards may not seem like a good idea, but for some people they can be. A high interest rate makes up for the fact that you are not trustworthy in the bank’s eyes. And if you carry a low balance on your card, you can start rebuilding or establishing credit without spending too much in interest.
Another option you have when it comes to credit cards for bad credit are low balance cards. These cards come with a low spending limit and are available from all the major card companies including visa and mastercard. Best of all, if you make your payments on time and don’t go over the spending limit, you may become eligible for a higher spending limit over time!
By: Sarah Freeland
Posts Tagged ‘Bankruptcy Credit’
Credit Repair Scheme Promises Fast Score Increases But May Be Illegal
December 20th, 2009
Establishing a good FICO credit score isn’t all that difficult; all you have to do is pay your bills on time. But if you have a bad credit score from a history of not paying your bills promptly, repairing your score and building it up to a level where you can get competitive loan rates can take time. It can take several years of paying your bills on time to build up your score and it can take seven years to wipe out a judgment or a bankruptcy from your credit report. Most consumers, understandably, would rather not wait that long and there is not shortage of companies that promise to repair credit quickly.
Several companies are offering dramatic increases in credit scores of up to 200 points in as little as 60 days using something known as “seasoned credit.” The concept is simple – if you are added to the credit account of someone with good credit as a cosigner, that good credit will add to your own credit score. What these companies do, for fees ranging up to $5000, is arrange to add your name as a cosigner to the accounts of willing participants who have good credit of their own.
Adding a cosigner to an account isn’t illegal; husbands and wives add each other to their own accounts all the time. What is illegal about this scheme is that it is a deliberate effort to manipulate credit reports and credit scores. If it is done for purposes of qualifying for a loan for which the borrower otherwise wouldn’t qualify, such as for a mortgage, it constitutes fraud.
In addition to the questionable legality of the practice, there are some other reasons why this sort of credit “repair” should not be attempted. The idea of having someone else’s credit rub off on you works both ways. Customers of these companies have no idea whose accounts their names are being attached to, and if those customers stop paying their bills, then their credit score will go down along with yours. None of this is under your control; you are stuck with whomever they stick you with. Since these companies advertise that once your score increases, you can become part of their “good credit network”, it only stands to reason that you may have your name attached to that of a person who only recently had a bad payment history, too.
Increasing your credit score by 200 or more points in 60 days’ time sounds like a great idea. But the risks of paying someone thousands of dollars to do it for you are great. It is better to build your credit the old fashioned way. Take your time.
By: Charles Essmeier
Avoiding Credit Repair Scams
December 10th, 2009
Credit repair can take time, especially if you have poor credit and don’t really have the time that you need to repair it. Unfortunately, many criminals and con artists know that credit repair is much needed and often time consuming and see this as an opportunity to make dishonest money by offering people what they want but that the con artist isn’t able to offer.
Even more unfortunate is the fact that large amounts of money are scammed in this manner each year, almost always from the people who are most severely in debt and can afford it the least. If you worry that you might fall victim to one of these credit repair scams, then the information below might help to give you a better idea of what to look out for so that you don’t end up losing money that you can’t afford to lose.
The Appeal of Something for Nothing
The reason that credit repair scams are so numerous is that people love the idea of being able to get something that they want with minimal investment of either time or money on their part. Desperation can add to this, especially in the case of someone who is severely in debt and it seems as though the only option that they have left is bankruptcy. Credit repair scammers generally offer a “quick fix” to an individual’s credit, and the price usually isn’t that bad… unfortunately, the service (if any) that they provide is illegal and by the time that a consumer finds that part out the scammer is gone.
Avoiding “Instant” Solutions
One of the biggest scams of this kind is that of “instant” credit repair, in which the scammer replaces an individual’s tax ID number with a new one in order for the individual to be able to establish new lines of credit without the burden of years of bad credit causing a denial.
This can be especially troublesome for the individual, since in most cases the scammer is operating within the law to create the new tax ID number which is actually a business tax ID. When the individual uses the new number, though, they are actually breaking the law and committing fraud… something that they often don’t discover until it’s too late and they’re facing legal problems.
In order to avoid these scams, just remember that anyone who offers instant results is just trying to take your money. All credit repair takes at least some time.
Other Consequences of Scams
In addition to losing your money to credit repair scams, it’s possible to face legal charges, heavy fines, and possibly even jail time if you use falsified tax ID information or get involved in certain types of scams. If you are found to be a scam victim, the charges will often be dropped… but not always. Then, of course, there is the fact that you are still in debt and have even less money with which to repay what you owe; credit repair scams can often push people seriously in debt over the edge into bankruptcy.
Without the Scam
In order to repair your credit without getting scammed, check into consumer credit repair or other certified credit repair services. Check references and make inquiries with local police and consumer groups to make sure that they are legitimate, and follow their suggestions to help you to attain a debt-free life without the worry of credit scams. It may take longer this way, but it will be worth it in the end.
By: Paul Rogers
