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!
Posts Tagged ‘ Bankruptcy Credit ’
Building your credit ranking back up after bankruptcy proceedings have been discharged is often the most frustrating part of bankruptcy. There are few lenders who are willing to take a chance on someone who has demonstrated their willingness to turn their back on debtors that trusted them for payment. However, there is hope for people in this type of situation. Once your bankruptcy has been discharged, the fastest and easiest to obtain loan that can help you start rebuilding your credit file is a post-bankruptcy car loan.
Car loans are different than most other types of loans because the car stands good for the loan. Because of this, lenders often consider the car loan to be less risky on their part – which is good news for the newly bankrupt borrower. In this instance, the car or other vehicle that you wish to purchase is considered to be collateral against the loan. And while this goes a long way towards establishing security with the lender, you can also improve your chances of getting the car that you want (and the benefit of rebuilding your credit with a nicely-sized loan) by having some sort of down payment for the car. While having a down payment is not necessarily a requirement to receive funding, it does make you appear to be a borrower who is serious about paying for their purchase.
A down payment of around ten percent is usually sufficient, but the more that you can pay down on the vehicle purchase price, the better. Having a down payment also makes your total loan less, which can have the effect of reducing your interest rate and lowering your monthly payment amount – both of which are in your best interests. Saving for a down payment before the purchase is an ideal way to have an adequate amount to offer the lender when it comes time to make a deal.
Check Your Credit Before Applying
Another important measure to take before applying for your post-bankruptcy car loan is to check your credit report. Many times a person who has just had their debts discharged during bankruptcy is shocked to find out that the proper notations have not been made with the three major credit bureaus – Experian, Equifax and Trans Union. Pull your report with each of these bureaus and check to make sure that the accounts that were discharged during bankruptcy are duly noted. If not, contact the bureau in question and have the situation rectified as soon as possible.
When choosing the car or other vehicle that is right for you, be certain that you never agree to a payment amount that is not within your budget. Although you will have few debts coming out of bankruptcy (depending upon which chapter you file), you must strive to maintain a reasonable budget in order to ensure that you will have enough money to meet your bills and start rebuilding your credit. If you have difficulty determining the best budget for your income, consultation with a financial counselor may be in order.
Online Post-Bankruptcy Car Loans
Online lenders provide a great source of post-bankruptcy car loans. Working with an online lender can actually be the fastest route to putting yourself behind the wheel of your new car, and these lenders offer very competitive rates on this type of loan.