Posts Tagged bad credit

For most folks with bad credit scores, getting an unsecured credit card will usually be out of reach.  While it doesn’t hurt to try, realize that more inquiries into your credit ratings will just serve to bring it down even further.  If you really want to try getting an unsecured card even at your present credit standing, just apply to one.  If it doesn’t work fine, just get a secured card, in the meantime.

Of course, you can use the secured credit card to start building up your credit ratings.  Just follow the typical guidelines for responsible credit card use - keep low balances (or zero, if you can manage it), always pay on time and never go over your credit limit.

According to most financial experts, people usually need at least three revolving credit accounts in order to maximize your credit score.  As such, it is highly recommended that you try to get two more cards after you’ve been using the secured one for a while.

Wait at least 3 to 6 months before trying to get a second credit card.  Similarly, go for a sub-prime card, as well, for your second account - it’s going to be far easier as your score is unlikely to have gained massive improvements yet.  After using both credit accounts for at least four months more, you can then apply for an unsecured credit card and actually have a good shot at getting approved.

Patience is key but the rewards should be worth the wait.

Want to fix up your tarnished credit record quickly?  Do these three things:

1. Challenge your credit report

You can challenge pretty much anything on your credit report.  In fact, when you sign up with one of those credit repair services, that’s exactly what they’ll do.

Doing it by yourself isn’t all that hard either.  Choose the negative items that look the easiest to be removed and challenge three or four of them at a time.   This process will take time, especially since all three credit bureaus will have to update your reports, although once they do, you can expect major changes in your score within 30 days.

2.  Pay down your existing debt

Keeping high balances on your revolving credit, especially when you’re over 50% of your limit for each, pulls down your credit score in a significant way.  Settling your bills on time and paying them down to below 15% of your total credit limit should help ease your credit record woes over time.

3. Avoid Unsecured Credit Cards For People With Bad Credit And Opt For A Secured Card Instead

Sub-prime credit cards generally aren’t great options when you’re trying to raise your credit score.  Furthermore, they’ll often have severely low limits, constricting fees and unusually high interest rates.

A better option will be to apply for a secured credit card instead, where your limit will be equivalent to whatever amount you deposit.  Using one, you can enjoy a higher credit limit than what an unsecured card should get you, which will help with your overall credit score.

If you have bad credit and are looking for a credit card, Orchard Bank has some of the best offers you can get. We’ve previously written about the Secured MasterCard from Orchard Bank which is what you can expect to be approved for if your credit really is at the bottom of the ratings. Depending on the company’s assessments of your risk factors, though, it’s possible to get approved for an even better card than the secured unit.

What credit cards can you hope to get approved for from Orchard Bank?

1. Orchard Bank Secured MasterCard

Read our review of Orchard’s secured MasterCard here.

2. Orchard Bank Gold MasterCard

If your credit is bad but not terrible and your credit risk factors don’t appear too unseemly either, you can get approved for an unsecured credit card. Credit limit won’t be too high but the terms will be pretty reasonable. You’ll be required to pay an account set-up fee of $19 and an annual fee between $39 and $96. You can get an APR between 8.9% to 18.9% (most likely you’ll get slotted into the higher end though).

3. Orchard Bank Platinum MasterCard

Another option you can get approved for is the Platinum MasterCard which, unlike the two previous choices, won’t require you to pay to have the account set up. You can also get the extra benefit of no annual fees - although most will likely get between $50 and $72. APR ranges from 8.9% to 18.9%.

4. Orchard Bank Prime MasterCard

If your credit rating is actually better than you expected, Orchard Bank will approve you for the Prime MasterCard. The card has no annual fee and APR is a fixed 15.99%. It carries a few extra benefits, including 0% introductory APR for the first six months.

If you have bad credit scores, getting a credit card can prove an exercise in futility. You can fill out all the card applications you want - getting approved isn’t likely to happen unless the fates suddenly align in your favor.

In case you really need a credit card, though, for whatever purpose, your best bet is a sub-prime credit card. Laden with less attractive features than regular credit cards, they might be able to serve your purpose - albeit not at the best conditions.

When you’re trying to build up your credit score back to respectable levels, a sub-prime card with low credit limit can help you in your quest. To ensure you get that benefit, make sure that the credit card issuer reports back to the three credit unions (Equifax, TransUnion and Experia) before applying to one.

Fees And Charges

Credit cards for people with bad credit are usually laden with fees considerably higher than normal. Similarly, other terms are likely not as good as what’s on tap elsewhere. Keep that in mind before signing up for one - the cost of maintaining a card like this will be high.

Most credit cards in this category will extort charge you a one-time non-refundable fee the moment you send in an application. It’s not cheap either with some cards charging as high as $150. Remember that it’s non-refundable, which means that money’s gone even if you are eventually disapproved.

Annual membership fees will be high, as expected, with little options in getting it waived. Even worse, most sub-prime credit cards charge a monthly maintenance fee that can add up (around $60 to $80 a month).

If you’ve got bad credit and can’t get approved for any credit card application you file, it might be time to hold off from applying to regular credit cards at the moment. Most likely, you’ll need to bring your credit rating back up before qualifying for some of those credit cards with awesome deals.

While most of the cards available to people in your boat will be incredibly high-interest with a generous serving of fees, there’s at least one that will treat you a little better than the rest. Sure, it’s a sub-prime card, but not a terrible one.

The Orchard Bank Classic Secured MasterCard is a great credit card for people who don’t have a good credit score. Keep in mind that HSBC owns and operates Orchard Bank so this sub-prime card, unlike many offerings in its class, has the backing of a large and reputable institution behind it. Unlike other “bad credit” options, Orchard Bank can actually give you one of four different cards - the less unsavory your credit looks like, the better deal you will get.

If your credit rating is really terrible, non-existent or you’ve just recently filed bankruptcy, the secured MasterCard will be the best you can get. Don’t think you’re settling for the short string though. This is one of the best secured credit cards you can find on offer today.

Annual fee is very reasonable ranging from $0 to $48 depending on their assessment of your credit risk. There’s also no application fee, a common feature on most sub-prime cards. You can get a credit limit equal to whatever amount you deposit - anywhere from $200 to $15,000. APR is a reasonable 8.9 % to 14.9 %, pretty good considering the circumstances. Even better, the Orchard Bank Classic MasterCard is a great card to have once you’re starting to build your credit back up.