Credit Cards For Bad Credit
As many as one in four people suffer with what is known as an adverse or poor credit rating and this can prove to be a stumbling block when it comes to being accepted for a credit card.
There are numerous ways by which you can end up saddled with a poor credit rating. This includes county court judgments (CCJs), defaults, mortgage rent arrears, bankruptcy, individual voluntary agreements (IVAs), previous repossession or late / missed payments on credit cards or loans.
However, a poor credit history can creep up on anyone not just those who regularly miss payments or people who can't hold down a job. Redundancy, bereavement or divorce can upset years of steady financial arrangements.
When you apply for a credit card, the card company checks the records held by consumer credit information agencies such as Experian and Equifax. These organisations know when we miss credit card payments, what county court judgments (CCJs) we have against us for non-payment of goods, and whether we have been declared bankrupt. Late payment of bills remains on your file for three years; CCJs and bankruptcies are recorded for six.
Arrears refer to the amount the borrower is behind in a mortgage repayment schedule.
Bankrupt - a legal entity (corporation, firm or individual) that is relieved by court proceedings from paying all debts. Normally the bankrupt’s assets must be surrendered to a third party appointed by the court.
County Court Judgments (CCJ) - an adverse ruling by a County Court (recorded against a persons credit history) when the person has not satisfied their debt payments with their creditors. CCJ will appear on an individual’s credit record every time a credit search is done for the next six years.
Default - usually refers to failure to make payments on a mortgage or loan at the correct time.
Get a credit card even with a bad credit score!
Even if you have an adverse credit history, many lenders will still consider extending credit to you, though at the cost of a higher rate of interest. As long as you make your repayments on time each month, you should be able to rebuild a healthy credit history, and pay less interest in future.
Capital One's Classic Mastercard is aimed at those who want to strengthen their credit history. The card offers credit with no annual fee. The initial annual percentage rate (APR) is high but could be reduced once you build up a steady payment record.
If you use you're card wisely it won't take too long before your credit rating improves and you'll be able to apply for a card with a much better rate of interest. Initially it is all about rebuilding your credit score.
Compare and find the right card for you
United Kingdom: www.creditsearcher.co.uk
United States of America: www.cardratings.com