by T. M. Robertson

Created on: September 04, 2010

When a person has bad credit, they will often times find it difficult to have new lines of credit extended to them. While it may be more difficult, it is not impossible. There are several different options for people with less than perfect credit.

1. Check and Verify Your Credit Report

First things first, get a copy of your credit report from all three credit bureaus and verify that the information reported is correct. If there are any discrepancies, dispute them and get them removed. By removing some of this negative information, you may be able to raise your credit score by a few points, and every point will count when applying for new lines of credit. You can check your credit report for free once per year for each of the three credit bureaus at

www.annualcreditreport.com.

2. Try to Get a Co-Signer

Because interest rates are determined by credit risk, a person with bad credit can typically receive a better interest rate and better terms if they can apply for the card with a co-signor who has a good to excellent credit ranking. Therefore, if it’s possible for you to get a co-signor, this may be your best option at getting a decent credit card.

3. Apply for Cards Catering to People with Poor Credit

If you don’t have the ability to secure a co-signor, your next best option would be to apply for credit cards that cater specifically to people with bad credit. A couple of banks that issue these types of credit cards are First Premier Bank and HSBC, and they both have several different cards to choose from. However, keep in mind that these types of cards often have high interest rates and various different fees associated with them.  

4. Try for In-Store Credit Cards

Another option is to try applying for in-store or department store credit cards. These store cards often have lower approval criteria than the major credit cards do. Target seems to have a card that is fairly easy to qualify for, and so does Best Buy. The best part about these cards is that they don’t carry any annual fees and usually come with other perks and reward programs for using them.

5. Rebuild Your Credit with a Secured Credit Card

If all else fails, you can always start rebuilding your credit with a secured credit card. These pre-paid credit cards are usually guaranteed because your initial credit line is equal to that of your security deposit. This makes these cards extremely easy to get. Another great thing is you’ll still be rebuilding your credit by making on time payments because these cards do still report to all three of the major credit bureaus. Also, depending on the card you choose, many will offer a program where over time, your credit line will become unsecured and you’ll get your initial security deposit back.

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