How to Get an Unsecured Credit Card with Bad Credit History?
Credit cards are beneficial in many ways if used judiciously. However, circumstances might have pushed you to default on your credit card bills and loan repayments.
Though you may have missed 2 to 3 payments on your loans and credit card bills, it will reflect on your credit report, resulting in bad credit. You may now look for a credit card to manage your daily needs.
In such a scenario, getting a secured credit card might not be difficult, but an unsecured credit card may look next to impossible. However, there are ways using which you can get a credit card. CreditMantri has put together its view points on obtaining an unsecured credit card with bad credit.
What Is a Bad Credit?
A bad credit history or poor credit score is a result of your past mistakes in managing your credit accounts namely loans and credit cards. To be precise, you get bad credit due to the following reasons.
Late payments on your loans and credit cards
If you have missed your payments on your loans and credit cards
Written off or settled account
Too many hard enquiries
A bad credit puts you in the bad book of the creditors and any future loan application is turned down due to the above reasons.
Securing an Unsecured Credit Card with Bad Credit
All the banks check your creditworthiness before approving your credit card application. While a steady income and employment can easily get you a credit card, a bad credit may deter your chances very much.
A bad credit could be the result of defaulting on your existing loans and hence your priority should be in getting this bad credit history corrected. One of the options is to get a fixed deposit on your savings account can get you a secured credit card easily.
What is a Secure Credit Card?
For those who do not know, a secure credit card is something you can obtain from banks by providing collateral in the form of a fixed deposit, your fixed deposit considerably reduces the risk for the lender and is one of the trusted options that you should consider when you have a bad credit history.
What if you run out of all the options?
Meticulous planning will help you at this point of time. There are NBFCs that offer credit, based on your monthly income. You can use the amount to fuel your bank savings. Having done that, you can leverage your bank account to get a secured credit card.
The credit limit on the secured credit card is up to the amount you have on your fixed deposit. Use your credit card responsibly to build a positive credit score.
The usage of credit card has become indispensable for many to manage the credit problems. With a bad credit, getting hold of a credit card invites additional responsibility. Any mismanagement from your side will further worsen your credit situation. Be a responsible borrower to enjoy the benefits of your secured credit card and build your credit score.