(Franklin Debt Relief is not a credit repair organization and the
following is for informational purposes only).
If you are a consumer suffering from bad credit, then you already
know that obtaining new credit cards can be a very difficult task.
Or, you may be a consumer who has just completed a
program and need to get back on the right track. For one, the
majority of lenders shy away from granting credit cards to consumers
who are in debt and have demonstrated that making their payments
hasn’t been an easy accomplishment in the past. In addition, for
consumers with a bad credit history, battling outrageously high APR
rates can be a daunting task in itself. For consumers who fall under
theses circumstances, as well as consumers who have no checking or
savings account and are struggling to open up new lines of credit,
there is still a means to do so.
The first step is to understand how to start improving your credit
so you are deemed reliable in the eyes of the lenders. How do you do
that? Open up new lines of credit and make your payments. While you
may be struggling to find lenders who will grant you credit cards,
it is not an impossible task. Department store cards and gas cards
are a good way to get your foot back in the door and start
rebuilding your credit. Typically, consumers with bad credit or no
bank account find it is easier to open up these types of accounts
with a lender. It is important to remember that your new credit
lines and types of credit used account for 20% of your credit score.
Simply making your payments on time and having a new variety of
credit cards will inevitably improve your credit score on some level
over time. In addition, the length of your credit history makes up
an additional 15% of your credit score. Making your payments as time
goes along will benefit you in the long run due to that factor. But
you must remain responsible with these new credit cards and not fall
back into debt. Furthermore, department store and gas cards aren’t
your only option.
Pre-loaded credit cards are accessible for consumers with no bank
account or consumers who are suffering from bad credit history. A
pre-loaded credit card is a credit card whose maximum limit is set
at the time you are granted the card. This is a great way to control
how much you spend while having a chance to start rebuilding a
positive line of credit. The consumer can set the limit of the card
and make a pre-payment to the lender to insure that the limit is
fixed. While there are some exceptions, pre-loaded credit cards
offer you similar benefits and rewards as traditional credit cards
and usually allow you to access the money from an ATM account. In a
base case scenario, apply for a pre-loaded credit card with low APR
rates and no annual fees.