The fundamentals of bad credit history you need to know

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The fundamentals of bad credit history you need to know


Updated: December 26, 2012

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If acquiring a credit card has been playing up on your mind for long, you would have probably already heard of credit score. Getting a credit card is by far dependent on your credit rating. A good credit score can help you grab some of the best deals available while it’s just the opposite with a bad credit history. Having poor credit history will cause a number of creditors including banks to rethink their decision of giving you a credit card.

What happens when you’re score is high is that the financial institution assumes you to be very low risk. Having bad scores will directly see you as a higher risk in the case of borrowing money on the credit card. You will have to supply a warranty while the interest rates on the various deals proffered will also be high. What’s more, you could be given a very low credit limit and may not be able to enjoy all the advantages generally available to a person with a good credit record.

Applying for a secured credit card is one of the best options for those having bad credit card history. You must be upfront about notifying the issuer for any custody on the credit amount. Generally, the credit limit delivered to a user is by ascertaining the balance of the users’ funds in the savings and current account. A few issuers may fix the amount limit to something less than the balance in the individual’s account. Depending on the creditor, the terms and conditions for this factor may vary.

A joint account is also a good way people can deal with a bad credit history. Though this should typically be seen as the last option and you must preferably share the account with a family member having a better credit. With this option in hand, you should be able to avail of credit card rates below normal interest, provided you pay the money on a monthly basis. In many cases, lenders may have you shell out a considerably small amount as a fee while others may charge on an annual basis for a secured card.

If you have a history of bad credit, you must be a tad bit extra careful before jumping into any credit card deal. While reading all the information carefully, you must scan through the market to gain the best offer.

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