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Research: Why is Bad credit history a serious problem? -

A bad credit history can haunt you for a number of years if you do not take steps to set your record straight. It can be very detrimental for all your future endeavors. Your history is the basis on which banks and other financial institutions will take decisions to lend you money or other instruments. If they feel that you are not responsible with your earnings and savings, they will decline or at times give you the loan at a very high interest rate. This can be a very harsh reality to face given that taking loans is one of the primary ways of getting over financial predicaments these days.

But it is not the end of the world if you do not have a good credit score. You can always shop around for a cheap credit account. Try not to look for frills such as credit card rewards or bonus points and other freebie`s. Just go for a basic account with the least interest rate and maximum credit limit. There will surely be some smaller companies that would be willing to give you such an account if you show sufficient documentation to prove that you have the asset base to support your credit account.

If you prove that you are turning around your financial fortunes, then you can convince the bankers to give you a credit account with a respectable credit limit and reduced interest rates. It is a good thing to show that you have got a new higher paying job or started a business that is profit making. At times those bankers might ask you to open a regular account in order to have a hedge fund in case you default on your payment.

If you still do not manage to convince the bankers to give you a crediting account, try to get a relative or a friend to co-sign on your account. In such a case, you are conceding to the bank that the said relative or friend will pay your dues in a scenario where you fail to pay up in time. That is they are taking responsibility on your behalf. But remember; only someone with a good credit history can stand as a guarantor on your behalf.

Every body deserves a second chance. All you have to do is put forth your case with the bank and tell them that you are serious about turning around your fortunes. And if you have been with them for a sufficient period of time, they will not have a problem with helping you out in a time where you are in need. And once you do get the credit account, make sure that you do not spend more than thirty percent of the credit limit and also ensure that you pay back the dues on time every time. This will convince the bankers and the crediting bureau that you are not a compulsive borrower and that you use the credit card for convenience and not as a necessity.