If you are trying to improve your credit after it's taken a hit, consider getting a credit card. By using a credit card to make small purchases and paying the credit card account in full each month, you can start to build up positive credit history. But it's not always easy to get a credit card if your current credit file is weak. Here's how to get a credit card when you've had bad credit in the past.
Often, getting a new credit card is not the best way to begin your quest to improve credit. Before you start searching for a credit card, explore other things you can do to improve your credit. To learn how, see the articles on Rebuilding Credit Without Getting New Credit. Only get a credit card when you are truly ready.
It’s often easiest to get a credit card from a department store or gasoline company. These companies usually open your account with a very low credit line. If you start with one credit card, charge items, and pay the bill on time, other companies will be more likely to issue a card to you.
When you use department store and gasoline cards, don’t carry a balance from one month to the next. There are several reasons why carrying a balance is not a good idea:
After you have successfully used a store or gasoline credit card for several months to a year, then you may be able to apply for a regular credit card from a credit union or bank, such as a Visa, MasterCard, or Discover card. (To get the best deal, see Shopping for Credit Cards.)
Depending on how bad your credit history is, you may be eligible only for a low credit line or a card with a high interest rate. If you use the card and make your payments, after a year or so you can apply to increase your line of credit or reduce the interest rate.
The following tips will help increase your likelihood of being approved for a new credit card or an increased credit limit:
If you can't get a credit card, you can try to get a secured credit card. Secured cards are easier to get, although often end up being more expensive. To learn more, see Getting a Secured Credit Card.
To learn more about credit reports and rebuilding credit, visit our Credit Repair area.
This is an excerpt from Credit Repair, by Margaret Reiter and Robin Leonard (Nolo).