You can get a credit card with bad credit, but you will pay higher interest
rates and fees. You can qualify for a home loan with bad credit, but you will
pay hundreds of dollars more per month than someone with good credit. The reason
is that lenders are allowed to charge different interest rates to different
They are not allowed to discriminate because of race or sex, but they are
allowed to discriminate because of past credit history. This is why many people
are interested in repairing bad credit. These people know that they many be able
to get credit, but they will pay more.
Some companies actually target persons with bad credit. They know that
sometimes a person who has negative credit history, and has not tried repairing
a bad credit history, will work hard to make their payments on time. They know
that these people are sometimes desperate for credit and therefore unconcerned
about interest rates.
If you have ever declared bankruptcy, you may have received an offer for an
unsecured credit card shortly after the bankruptcy was finalized. You may have
found that the fees and interest rates were exorbitant and hard to pay off.
Accepting offers like these may not help you in your efforts at repairing a bad
credit history. If you charge up to your limit and/or are unable to make your
payments on time, then accepting a credit card with bad credit will make it even
Repairing a bad credit history includes many factors; correcting
information on your credit report, removing negative items from your credit
report, negotiating with creditors to remove negative items, having excessive
inquiries removed and building good credit.
One way to build good credit is to obtain a secured credit card which reports
payment history to the credit bureaus. You can get a secured credit card with
bad credit. You should shop between the different banks that offer these cards
since interest rates and fees vary. A secured credit card is secured by a
deposit into a savings account.
Initially your credit limit is the same as the balance in the savings
account. If you use the card occasionally, make monthly payments on time and do
not charge up to the limit, then you will improve your credit score.