Banks are in the business of making money just like any other business you come across. A person who intends to interact with a bank needs to understand this so as not to get disappointed or frustrated when the bank makes some decisions because they perceive you as a bad credit card customer.
Some people often say that ‘life happens’. Well, this might lead you to default on the payment of your current credit card or loan. Unfortunately, all these personal financial details are recorded if you are living in Saskatchewan. Defaulting on your loan repayments and late payments gets recorded and this information is shared by all the lenders and credit card companies. This means that you will be rated as a risky debtor.
Credit card companies will evaluate each and every customer so as to ensure that their money is guaranteed to return. If your credit rating is positive, creditors will want to offer you credit card loans at low interest. On the other hand, if you have defaulted in your repayments, you might even find it impossible to access a standard credit card. However, there is some light at the end of the tunnel;
How to get a credit card with poor credit rating?
- Get a prepaid card – You may find that your applications getting rejected from every corner and yet you need to shop with a card. You can go around this problem by getting a prepaid card. Essentially, this means that you put some cash in your card account and get to shop with it. While technically this means you are using a debit card, you also get to enjoy some credit if you are a regular user. The approval of this card is fast and you also get a shot at improving your bad credit.
- Apply for ‘bad credit’ credit card – This is a card that you can access if your credit card application gets rejected by the mainstream lenders. At times, these cards are referred to as credit builder credit cards. You should regularly use this card and make timely payments. This way, your credit score will improve and it is even possible to see your rating go way up in just 6 months. With time, you will even be eligible to apply for a card with the mainstream lenders.
- Secured credit card – This type of card is used by people who have bad credit past or by those with low credit score. This card is backed by a savings account whereby the account is used as collateral and used to set the limit of the card. The credit card holder is supposed to deposit funds into the savings account hence giving the lender some security to hold on to in case they fail to make a repayment. Based on a borrower’s credit history and the amount in their savings account, the credit limit of the card varies.
Things that will make you get low credit score
People often get lost as to what can make them become not creditworthy. Besides, you defaulting on a number of loans or credit cards, you can also land in the category of customers not eligible to access a standard card if you have never borrowed money from a lending institution.
If your name does not appear in the national electoral register, and you happen not to have any past relationship with a registered lender, your credit score will be a bit low. In short, lenders are looking for a referee whenever you are applying for a loan or for a credit card. If there is no one to vouch for you as a good payer, then you automatically get a low credit rating.