Credit Cards for Bad Credit

How do I know if I have bad credit? There are both qualitative and quantitative criteria that may help you determine if you have bad credit. From a quantitative perspective, a FICO score in the 300-619 range is considered “bad.” If you do not know your credit score and want an interactive way in which to approximate it, try our Free Credit Check. Alternatively, if any of these are applicable, you have bad credit:

1. You are late on a credit card, loan or medical bill or payment
2. The balances on your credit cards are near your limits
3. You have declared bankruptcy in the last three years
4. You have been more than 60 days late on a medical bill, credit card or loan payment in the last nine months.

It is important to note that mistakes on your credit history can misrepresent you as having bad credit. Since you are legally entitled to free copies of your credit reports from the three major credit reporting agencies—Equifax, TransUnion and Experian—every 12 months, you should make sure to check them for mistakes yearly. To do so, visit AnnualCreditReport.com, and report any discrepancies. It is important to check the report from each agency thoroughly and file any necessary credit report disputes because inaccuracies can significantly damage your credit score and the information from each source may differ (all three reports can be accessed at annualcreditreport.com).

How do I improve bad credit? Simply put, get a credit card for bad credit and use it responsibly. In order to improve bad credit, you must begin infusing positive information into your credit report that will negate past negatives such as bankruptcies, defaults and late payments, and a credit card for bad credit is the easiest tool for developing a pattern of positive credit usage. It represents the easiest option because people with bad credit have better chances of getting approved for a credit card than any other type of loan or line of credit. As a matter of fact, secured credit cards (the most widely used type of bad credit credit card) offer guaranteed approval, which means you can benefit no matter how bad your credit may be.

No matter what type of bad credit credit card you wind up getting, it will report information about your use to the major credit bureaus every month. As long this information reflects on-time payments and low credit utilization, your credit score will benefit. Additionally, it is important to note that you don’t need to make purchases with a credit card in order to benefit. Simply maintaining a credit card at zero balance and in good standing adds positive information to your three major credit reports each month.

How to get a credit card with bad credit A lot of people with bad credit routinely apply for credit cards and get rejected, causing them to wonder if a credit card is even attainable with bad credit. If this describes your situation, simply go for a secured credit card. All you must do to get such a card is provide a valid Social Security Number, declare that you have enough income to afford the monthly minimum payment (usually 3% of your balance) and most importantly be prepared to put down a refundable deposit of at least $200. In the very rare event that you get declined for a secured card, try applying for one from a different bank until you get approved. While we typically discourage multiple credit card applications in a short time frame because of the damage they can do to your credit, when you have bad credit, the benefit of getting a credit card ASAP outweighs any such damage. Besides, when you’re applying for secured cards, it’s only a matter of time before you find a bank that will approve you.