Bad credit - Can I get a credit card?

Individuals with bad credit scores will find it challenging to get approved for an unsecured credit card. When applying for a credit card, banks will look into your financial history and current financial position to see if you qualify for a credit card from their institution.

Banks will keep detailed credit files on customers which include personal information such as credit card applications, card defaults, loan defaults and unpaid utility bills etc. Credit reporting agencies such as Veda advantage give you access to your credit files so you can view your credit score and history, as well as any errors that you can then request to be removed.

So how do these bad credit scores come about? If you have ever exceeded your credit card limit, had any valuables repossessed, or utilities cut off, this can all negatively affect your credit score.

If your credit score is preventing you from getting approved for an unsecured credit card, you may be able to get approval for a secured card or a partially secured card.

Secured cards work by only giving you a credit limit on the amount the deposit. If you deposit $200 you can only spend $200 on your credit card. It’s important to note secured cards are not debit cards as no money comes out of your account when you make a purchase.

Partially secured cards work in a similar way to secured cards. For example, If you have a partially secured card at 50% it would enable you to spend up to $600 when you make a deposit of $300.

Secured cards may not appear that attractive to consumers, but they do give individuals the opportunity to improve their credit score. An improved credit score may allow customers to successfully apply for unsecured credit cards in the future.

To avoid getting a bad credit score in the first place individuals should ensure that they pay all their bills on time and spend within their credit card limit. It is important to regularly review your credit score so that you can contest any errors or discrepancies that may negatively affect your credit rating. If you do find yourself in a situation where you’re unable to pay your credit card bills, it’s important that you contact your financial provider straight away. Your financial provider will talk to you about effectively managing your debt and prevent your credit score from dipping.

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