We live in the world of credit. Most banking institutions offer different forms of credit, from credit cards to signature loans.
Most people often find themselves in bad credit situations, such as court judgments, bankruptcy, repossession, foreclosure, and loan default, due to a lack of sufficient financial knowledge and discipline, which often makes it difficult for them to obtain credit in the future. So what exactly is credit?
Credit means you get a service or cash grant to rent for your own purpose. You are often bound by a contract or agreement to repay in the future as agreed with the lender or service provider. Credit exists in different forms, such as a loan, mortgage, signature loan, or credit card.
Each financial institution or loan agency will first check your credit history before considering giving you credit. If you have defaulted on a credit or loan before or have a bad credit history, it will be almost difficult to obtain credit every time you apply.
However, it is possible for you to improve your bad credit history or create a new good credit history by repairing your bad credit history, thus restoring your credit worthiness. This process is called credit repair. It is the process in which consumers with poor credit histories attempt to reestablish their credit worthiness.
Although there are many credit repair companies today that promise to repair your bad credit for you, but if you can follow a simple guide, it is very possible that you will do it yourself; after all, it is your credit.
Fixing your bad credit will make it easier for you to get low-interest credit, car or home loans. However, with a bad credit rating, you may not be able to get a loan or be subject to high interest rates and various other unnecessary conditions. That is why it is very important that you repair your credit if you have bad credit. You will get lots of tips on how to do this easily in this book.
Your Credit Score – How You Can Improve It.
Your credit score is very important in any financial transaction you make or intend to make in the future. Therefore, it is good that you know exactly what your score is, understand its meaning, and learn how you can improve it if you are not good enough.
“Many factors can contribute to a negative rating from credit reporting agencies. Many factors, such as missing a bill or late payments for an extended period, can contribute to someone getting a” bad credit rating. “or a bad rating. Whether the defaulting of an account is intentional or due to financial difficulties, the result can be the same, a negative rating … But there is hope of getting credit cards for people with bad credit, bad lower credit or credit score “
Credit report: its effect on your personal credit
The credit report is a compilation of your credit history, past financial transactions, and possible personal information. This report is generally compiled by accredited agencies known as a credit reporting agency.
Credit reporting agencies are organizations that help nationwide credit card companies, loan companies, banks, and department stores determine the creditworthiness of their potential customers.
Once they have detailed information from these sources, they give it to the organizations that need it when requested. Although they keep information about you and your credit on file, they do not make final judgments about your creditworthiness. The decision is up to the credit card companies or whatever lender you are dealing with.
Credit cards: – types and what you need to know about them.
Today, everyone wants to have at least one credit card. Wherever you go, you will see advertisements for various banks and other financial institutions offering you credit cards. However, before applying for a credit card, there are several factors to consider. Therefore, it is very important that you know more about the types of cards available and the one that best suits your needs.
Secured Credit Card: – A secured credit card for people with bad credit requires a security deposit as collateral before it can be approved. It is the type of card that best suits the needs of people with little or no credit who are trying to build their credit history. Your collateral must have a value equal to or greater than the amount of the credit you are requesting.
With a secured card, you deposit your own money (into a savings account at the bank where you are applying for the credit card) and that amount (or part of it) is your card’s line of credit. Put in $ 500 and you could have a credit line of up to $ 500. You can deposit between two hundred and two thousand dollars in an account, and that will be your spending limit.
This will give you the flexibility to use a credit card and because if you pay every statement, you are letting creditors know that you can handle credit (again) and your bank will soon begin to extend your line of credit beyond what you have entered. So you are on your way to returning to healthier credit, to a state where you will no longer need a secured card.
Commercial credit cards: these are the cards that are available to owners, directors and executives of companies. They come with various features like any traditional credit card. You should also consider the terms and conditions for these types of cards before applying.
Student credit cards are another type of credit card specifically for students. These types of cards are made for students due to their lack of credit history and, given the opportunity, they can build their credit history with such a card.
Prepaid credit cards: they are a set of cards that are acceptable as long as traditional credit cards are acceptable, but they are not credit cards. You will always have to transfer money to your card before you can use the card, and you may not be able to spend more than what you prepaid for the card.
Currently, this is almost the best card for people who want to avoid the interest and other fees charged on traditional credit cards and also for people with bad credit. However, other small charges like monthly fees, application; over the limit and ATM fees still apply, but offset if you pay your bills by money order
Whichever card you decide to choose, be sure to review the applicable terms very well to avoid submitting to financial bondage. In the second part of this article, we will continue to discuss other types of credit cards.
Balance credit cards are standard unsecured cards designed to allow consumers to save money on interest charges by transferring the balance from a higher interest credit card to a lower interest rate credit card.
Low interest credit cards are other types of standard unsecured credit cards. They offer a low introductory APR that changes to a higher rate after a certain period of time or a low fixed rate. You can take advantage of the low introductory APRs to make larger purchases for now and pay for them several months later. It will not be possible to get this credit card for people with bad credit.
Air Mile credit cards are cards that are good for people who travel frequently or plan to go on vacation. It is a form of reward card that gives you the opportunity to get a free airline ticket. You will need to earn specific airline miles before you are entitled to a free ticket. All mileage points earned will be based on the dollar amount of your credit card purchases over a period of time based on the predetermined point level.
Specialty credit cards are another set of standard, unsecured cards designed specifically for individual business users and students with unique and special needs.
Be sure to carefully study the terms of whichever card you choose to avoid putting your credit rating at risk. Also, when choosing any of the reward cards, be sure to study the forms and offers very carefully because credit card issuing companies offer different reward programs and their promotional offers change frequently. So be sure to carefully review the card terms and conditions for each specific card before applying.