Bad credit history and credit cards that help

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Credit Card Applications » Research » Guides » Building Credit History » Bad credit history and credit cards that help

Bad credit history and credit cards that help


Updated: December 26, 2012

The content is accurate at the time of publication and is subject to change.
Credit cards have many advantages when it comes to financial freedom. They have a readily available credit limit, and the advantage of spending the money in whichever part of the world. But credit cards are the most common reason for people to end up in debt, and get into the books of bad credit history. Credit history contains every single financial detail of the individual and the credit scores change depending on a number of details that the credit history contains. Credit scores depend on a number of things and can fluctuate from high to low, depending on the kind of financial activity. Some of the things that affect the credit scores are listed below:
  • Credit scores can suffer if the outstanding balance is not cleared off within the due dates, whether they are credit card bills, or installments of loans.
  • Credit scores can go to the lower end of the scale when the credit card user crosses the set credit limit. Even when the outstanding balance in more than 50% of the credit limit, credit scores may take a hit, if not cleared within the due date.
  • Credit scores are affected when the individual applies for more credit cards and the applications are denied. Credit card applications should be sent out only when the individual is sure to get approved.
  • Sometimes, irregularities in the credit history can lead to low credit scores. The individuals having credit history can review their histories at least once every year. This should be used as an opportunity to set right all the irregularities in the credit history entries.
There are many options for people in the bad credit history zone to improve their credit scores. Applying for new credit cards ironically is one of the methods to swing back to good credit history zone. But before applying for new credit cards, the old outstanding balance must be cleared off by some means. Balance transfer scheme can help in this regard, as the outstanding balance that has been transferred from the old card to the new card does not have interest rates charged. The outstanding balance can be cleared off gradually within a year, and a new credit card can be chosen to rebuild the credit history. Some credit cards that may help in strengthening the credit scores are listed below:
  • Secured credit cards: These cards are available in any bank, when the individual keeps a balance in the account as a security. The credit limit is set according to the balance that the individual keeps in the account.
  • Department store cards: There are some department store credit cards that are accounted for in the credit history. It helps to sign up for such cards, since they are free. They have high interest rates if there is a payment missed, so exercising caution when spending with those cards is necessary.
  • High interest credit cards: Some credit card companies offer high interest credit cards without credit checks. But it is easier to land in debt again with high interest cards if they are not used with care.

Disclaimer: This editorial content is not provided or commissioned by the credit card issuer(s). Opinions expressed here are the author's alone, not those of the credit card issuer(s), and have not been reviewed, approved or otherwise endorsed by the credit card issuer(s). Reasonable efforts are made to present accurate information, however all information is presented without warranty. Consult a card's issuing bank for the terms & conditions.
All rates and fees, and other terms and conditions of the products mentioned in this article/post are actual as of the last update date but are subject to change. See the current products' Terms & Conditions on the issuing banks' websites.
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