In this economy, many people have found themselves in credit trouble. Having poor credit can hinder your everyday life in many ways. Renting cars, getting hotels, getting certain jobs, getting a cell phone and rebuilding your credit score are a few things that may seem extremely difficult. Low credit scores can also have someone end up paying hundreds or thousands more in interest because they are considered a high risk to lenders. However there are a few solutions that can help people obtain a credit cards and begin rebuilding credit. It is important to remember that all goals can be achieved with proper focus.
Poor credit may be the result of many factors like medical bills, defaults on payments, or even a death in the family. Bad credit often seems like a rainy cloud has been placed over your head and there is nowhere to hide. The decision to begin working on your credit issues is the first step to improving your credit situation. While doing so, there are some things someone should be aware of while trying to build credit.
If a credit card is needed but you can seem to get approved anywhere, there are a few solutions for you. Since a poor credit score is high risk for creditors, you can obtain a secured line of credit. This is basically a line of credit, usually as low as $300 that you are borrowing from yourself. A secured line of credit is a great option. Virtually everyone is approved because this is your money backing the credit card in case defaults occur. This protects the credit issuer and allows you to begin rebuilding your credit worthiness. Obtaining two to four small lines of secured credit can have a dramatic effect on your credit score starting to turn around. It is important that you keep those lines of credit in good standing. If you can afford to get that many lines of secured credit at one time, you can apply for one at a time until you have a few.
Another temporary solution to credit issues are pre-paid debit cards. These allow people to load money on to cards and use them just as you would credit cards, debit cards, and ATM cards. Some places like hotels or car rental companies may not accept these. However, with pre-paid cards you will be allowed to shop online or in stores with a debit card, even if you don't have a checking account. May pre-paid cards also have direct deposit programs, which allows easy deposit from your employer. The only downside is that most pre-paid cards don't build credit. They are usually just a temporary solution for not having a credit card or checking account. There are a few pre-paid cards that will build credit and are less expensive than secured lines of credit. That may be another avenue to help score improve. (Charde Moore)