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3 Ways to Get a Credit Card When You Have Bad Credit

If you’ve applied for credit cards, only to have them turned down time and time again, it’s likely bad credit that’s keeping you from getting approved. Perhaps he didn’t pay in the past when he lost his job or other circumstances caused a negative payment history. Whatever the reason, the good news is that credit can be repaired over time.

One way to improve your credit is to build a positive payment history. However, if you can’t get a credit card to start rebuilding your credit, that can be difficult. Fortunately, there are a few ways to get approved for a credit card even with bad credit.

What is bad credit?

Your credit may not be as bad as you think. On the other hand, bad credit could be the main reason why your credit card applications keep getting denied. So you have to figure out where you fall on the poor to excellent credit score range .

Here’s a rundown of credit score categories, according to the Fair Isaac Corporation (FICO). Many lenders use your FICO score to determine your creditworthiness.

  • Poor: less than 580.
  • Acceptable: 580 to 669.
  • Good: from 670 to 739.
  • Very good: from 740 to 799.
  • Excellent: 800+.

If you’re in the “poor” FICO score range, you don’t have much of a chance of getting approved for a traditional credit card, at least for now. But that doesn’t mean you have to resign yourself to living on cash alone.

There is more than one way to get a credit card so you can gradually increase your credit score.

One of these methods below might be just what you need to put a credit card in your wallet.

Apply for a secured credit card

You’re not the only one paying for past credit violations. Many people have a hard time getting credit because of their low credit scores. That’s why some banks and credit card companies offer consumers with bad credit what’s known as a secured credit card.

With a secured credit card, you pay the credit card issuer an amount of money that serves as a type of deposit on the card. The issuer then typically sets the card’s credit limit at that amount. This eliminates the risk for the credit card company. If you don’t make what you owe on the card, the credit card company can use that deposit to pay off the balance.

Obtaining a secured credit card can help you build a positive credit history, as long as you use the card responsibly and make payments on time. Start by loading less than $20 a month and paying off your card statement balance each month. This will help you build a positive payment history, which accounts for about 35% of your credit score.

Accounts with a negative payment history automatically disappear from your credit report after seven years. So a new positive payment history helps improve your credit score so you can ultimately get a better credit card with a better interest rate, rewards program, and higher credit limit.

Apply for a store credit card

Store credit cards typically have lower credit requirements than major credit cards. Even if you don’t get approved for a major credit card, you may be eligible for a business credit card. As with a secured credit card, be responsible with the amount you load onto it. Then pay the balance each month.

This will help you build a positive payment history so you can be approved for a better credit card later. Store credit cards tend to have much higher interest rates than credit cards from other merchants, so paying off the balance on your statement also means you won’t pay interest.

Become an authorized user

Becoming an authorized user of someone else’s credit card can help you improve your credit. When you are an authorized user on someone else’s card, that person is responsible for paying for the card. However, that doesn’t mean you don’t have to pay your balance each month. Make all payments on time, just as you would if you were the primary cardholder.

Before you become an authorized user, check to see if the credit card issuer reports to the major credit bureaus so that the account is merged with your own credit on your credit report. Also make sure that the primary cardholder is responsible, has good credit, and makes all payments on time. Otherwise, being an authorized user could negatively affect your credit.

How long does it take to build good credit?

With bad credit, it can take two to three years to improve your credit score to the good or excellent range. But that time will pass whether or not you build good credit, so be patient. Once you have a positive payment history, credit card issuers are much more likely to approve you credit cards on better terms.

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