How To Get A Credit Card With A Bad Credit Rating?

One of the most useful sites I found online for getting information on how to repair my credit was in the ‘Money’ section of eHow.com. There’s a guy named Patrick Munro who is a financial advisor and he has put together a series of videos answering the biggest questions about how to fix your bad credit. One of the more relevant videos I found from Mr. Munro was the video about “How To Get A Credit Card With A Bad Credit Rating.” You can watch that video right here:

http://www.ehow.com/video_4790844_credit-card-bad-credit-rating.html

When I had bad credit… I didn’t think there was anyway I could ever get credit again… or at least for a long time. But I knew I had to some how re-establish credit… but the only way to do that would be to prove to the credit card companies that I can be responsible and pay my debts on time. So how was I suppose to do that if I could no longer get any credit?

Well… that’s when I discovered the pre-paid credit card. Basically… the way it works is that you are required to put up an up-front collateral. For me, it was $1,000 dollars. So by depositing $1,000 dollars as collateral… that now became my credit limit. I was able to get a pre-paid (or sometimes called ‘Secured’ credit card) and can begin to charge things on my card and pay it off in time every month. This helped me in the process or re-establishing good credit. And that’s how I was able to get a credit card even though I had bad credit.

For more info… I recommend you visit the eHow.com ‘Money’ section and watch some of the video that Patrick Munro has available about how to fix your bad credit.

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What can I do to raise my credit score?

Throughout my journey of trying to fix my credit… I’ve found that there are several different things you can do to raise your credit score.

Believe me… my credit score was in the pits. When I was starting all of these different businesses… I maxxed-out a ton of different credit cards that I simply could not pay back.

I tried to avoid the situation for the longest time… but finally I decided I needed to do something about it. So that’s when I decided to start researching the different things I can do to get back on track and improving my credit.

When people talk about credit scores… they’re usually referring to your FICO score which is just the initials of the company who created the system for rating your credit.

A lot of creditors will use your FICO score as a starting point to determine whether or not you are credit-worthy… but it’s not the only thing they look at. Some other factors lenders look at is how long you’ve lived at a particular address or… how long you’ve been working at your current job.

Lenders like to see consistency… because if you are consistent with where you live… and consistent with your job… then they feel you have good habits and can be trusted with paying back your loan.

However… if they see you’re constantly moving… constantly changing jobs… the erratic behavior may raise red flags that you are unreliable and that could affect how you deal with paying off the loan they may potentially be giving you.

So keep these things in mind.

When lenders look at your FICO score… you’ll have a rating between 300 and 850. Anything below the score of 700 may tell the lender that you may be a risky investment. The lower your score… the higher your interest rates will be. Likewise… the higher your score… the lower your interest rate will be.

That’s why one of the very first things I mentioned in a previous blog post is to get check your credit report to make sure everything is accurate. You can get one free credit report for the 3 different agencies that track your credit every year by going here:

http://www.AnnualCreditReport.com

Don’t pay for a credit report… you can get a copy for FREE by going to the site above.

When you get a copy of your credit report… make sure you review it carefully. If you see any errors… make sure you contact the credit agencies right away to remove the errors.

Also beware of how many accounts are opened and check your address. If you were a victim of identity theft… many times the thieves may have tried to open up various different accounts with your name and identity.

If you see this on your report… make sure you correct it as soon as possible.

Once you understand what is showing up on your credit report and you confirm that everything is accurate… next thing you need to do is begin to establish a good credit history.

Here are some things you need to start doing right away to begin building up your credit:

#1) Pay your bills on time. This is probably the number 1 thing that creditors put the most weight on when determining your credit score. Are you consistently paying your bills on time… or, you are always paying your bills late.

If you pay your bills on time… this will dramatically give you the single biggest boost in helping you improve your credit.

#2) The next thing creditors look at is how much you owe. If you’re like me and you maxxed out a dozen different credit cards… this will negatively affect your credit. So what you want to do is begin to put a plan into place to start paying down your debts one at at time starting with the highest interest rate debt first.

As you slowly begin to pay down your debts… this will help you improve your credit score.

#3) Lenders want to see your track record with credit. If you only have new established credit… this can hurt against you. If you have older credit cards that you established long time ago and have consistently paid down… that looks much better in the eyes of a creditor because it shows what you’re habits around credit are over a longer period of time… which gives them a better indication of what kind of credit habits you’ll have going into the future.

These are some simple tips you can begin applying to your financial habits right away… and if you stay consistent… all of these things can lead to helping you improve your credit score rating and help you fix your bad credit.

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Beware of Identity Theft…

About 2-years ago… I got hit with identity theft.

I can’t believe myself… I was late for a date and rushing to the place where I was suppose to meet… when I realized that I didn’t have any cash on hand.

So I saw a Bank of America on the side of the road… pulled-over, ran out to the ATM, grabbed a $100 bucks in cash… and then ran right back to my car and continued to drive to my destination.

Little did I know that I totally forgot to take out my ATM card out of the bank ATM machine. Yikes! (The thought just never hit me.)

It wasn’t until several days later when I went to check my online statement… I noticed that a bunch of money was missing from my account. I started to review the charges and I say almost 11 different charges on my credit card statement that I had no clue where they came from.

* 2 Different Wal-Mart charges
* 4 Different Gas Station charges
* 7-Eleven Charges

All the charges were under $200 bucks.

I guess if you go to gas stations, or convenient stores, or Wal-Mart and you don’t spend more than $200 dollars… they don’t even check your I.D. when you’re purchasing!

It was crazy… more than $1,000.00 dollars  was taken from my bank accounts as a result of me forgetting to take out my ATM card from the ATM machine when I pulled out money because I was in a rush to get to my date.

And all this happened in less than 3-days time!

That’s why you have to be careful with your ATM and Debit Cards. I immediately called the bank to have my cards cancelled and applied to get those transactions removed and returned to me.

It took the bank almost a month to do the investigations… but luckily… they confirmed that they were fraudulent purchases and they refunded that money back to my account.

The point is… whether it’s identity theft… or poor credit management… you MUST take responsibility when it comes to using credit cards or debit cards. Because if you’re careless… and you don’t pay close attention to what’s happening… things like identity theft can happen to you. You can develop poor credit ratings and have bad credit scores.

And the lasting affects of these poor decisions can effect your financial situation for many years into the future. Start now to develop more responsibility around your finances… and you will be rewarded with better credit, more financial stability, and a better peace of mind.

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Re-pay your debts… and establish good credit!

There are several things you can do to help you re-establish good credit.

The obvious course of action is to re-pay your debts. That’s a given. But at the same time… you should also be thinking about restructuring your lifestyle.

This was probably the hardest part for me because it was hard trying to change my habits. But I knew I had to do what it takes to help be get my good credit back. So I first started with setting a budget and sticking to it. Some of the things I included in my budget were:

a) Rent
b)  Utilities like Gas, Electric.
c) Some other things I heard that help is keeping your same residency and job
d) Maintaining a checking account and savings account

The other thing I did is I cut-out all of my eating out. I used to always eat out only because I didn’t like to cook. But I noticed that my biggest expense was paying for fast-food every day for lunch and dinner. It was EXPENSIVE!

So instead… I trained myself to go to the super market and by groceries in order to cook food at home. By doing that… I instantly cut my expenses down by more than half!

Can you believe that? It’s true… that’s how much I was spending on buying food everyday instead of just cooking at home.

After you re-pay all your debts… then the next step is to get a new credit card and begin to build a good credit history. For me, it was still hard for me to get a credit card. So instead… what I did was go to my local bank and applied for a ‘Secured Credit Card’.

You can find more about getting a secured credit card here:

http://www.bankrate.com/finance/credit-cards/10-questions-before-getting-a-secured-credit-card-1.aspx

Essentially… what I had to do is put up some collateral to get my card. So in my case… I gave the bank $300 dollars up from for a credit card that had a $300 dollar limit. Then, I made sure to use the credit card to only pay for bare essentials like gas for my car and also groceries from the market.

Then… I made sure to pay off my credit card each and every month just to help me build some better credit. When you use your card responsibly like this… and you don’t go overboard… and you pay off the balance each month… this will help you credit over time.

Again… there are no quick fixes. You can’t fix or repair your credit overnight. It takes time, patience, discipline, and consistency. But if you stick to the plan I’ve laid out for you here… you’ll be on your way to moving closer to establishing good credit.

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Tips on How to Fix Bad Credit…

You gotta love the internet.

As I began to search online for tips to help me fix my bad credit situation… I came across several different articles that were very helpful to me. One of the best articles I found was at this site right here:

http://www.ehow.com/how_117172_fix-credit.html

eHow has a whole entire section within their money and finances section dedicated to people like me who have bad credit and are looking for things they can do about it.

There was a point in my life where the debt just became over-bearing for. Not to mention that I just lost a major source of my income… so I was getting more and more stressed by the day.

I knew if I want to make a positive change… I would have to have a positive outlook and a positive attitude. Otherwise… I might have just gotten to a breaking point where I just wouldn’t even want to live anymore to deal with the constant struggles and pain.

Luckily… I told myself… let’s make the most of this situation and find the positive route to fix it. So that’s what I did when I found this powerful article right here.

One of the things you have to realize is that sometimes what is showing on your credit report isn’t always complete accurate. So it’s important that you request a free credit report from one of the biggest credit bureaus to double check that you’re not getting whacked for something that is not accurate in the first place.

You can go here to get your free credit report once a year:

https://www.annualcreditreport.com/cra/index.jsp

If you find that you have any outstanding debts on your credit report… come up with a plan to re-pay them as soon as possible. (I recommend you start with the highest interest debts first… then take that amount and go to the next one. If you stay consistent… you’ll begin to see your debts rapidly decline rather quickly.)

During my search… I found several organization that will help you communicate with your creditors of debt collectors to help you come up with a settlement plan. What they don’t tell you is that if you settle… the remaining balance that you don’t have to pay anymore is now reported to the government as income. And because it’s consider income… you may probably have to pay taxes on that money.

Some people will tell you to consolidate your debts. I didn’t do that. But if you decide to go that route… you suggest you contact a non-profit credit counseling organization to help you. They’ll help you put a plan together to help you lower your payments and get you debt back under some control.

Credit repair companies are interesting. I don’t know how much I trust them. They want you to pay them up-front to help you for work you pretty much can do yourself. They make some really bold promises that sounds almost too good to be true. But just beware… because sometimes they can just make you go further into debt.

The final step I’m going to leave with you today is this:

If you can have the discipline to do it… I recommend you close all your credit card accounts and cut up your cards. You’ll have to change your lifestyle and develop new habits which include only spending money that is truly necessary like food and gas. Then use the rest of your money to pay down your debts.

This isn’t easy for most people. We come accustomed to a particular type of lifestyle… and to have to change what is already an everyday ordinary way of life for you is hard. Trust me… I’ve been there and done that. I’ve gone through it. But out of necessity for survival… I had to change and make some significant alterations to my life.

If you want to get your finances back in order… you really don’t have a choice. It’s a MUST. That’s it for now.

I’ll give you more tips on how to fix your bad credit in my next blog post.

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First Steps to Fixing Bad Credit…

When I finally came to the realization that my credit was shot… that’s when I finally told myself… I need to do something about this and find out what my options are.

A lot of people deny the fact that they are in hot water. They ignore letters from creditors. They avoid picking up the phone from collection agencies. They just don’t want to deal with hoping that if they ignore it long enough… all of will just go away.

That’s wishful thinking. Believe me… I’ve been there and done that before.

At some point… you just gotta gather up the courage and just see what you can do about it. And so that’s when I turned to the internet.

I went to Google and did a search for “How To Fix My Bad Credit”. I found a very helpful article over at:

http://www.ftc.gov/bcp/edu/pubs/consumer/credit/cre13.shtm

Here… the FTC is telling us that there are a lot of credit repair scams out there that we have to be aware of. If it sounds too good to be true… it almost always is. So beware when you see cliams like:

* Eliminate all your bad credit… 100% guaranteed!
* Credit problems? No problem!
* Remove all bankruptcies,  liens, judgments, and bad credit from your file forever!

When you see these kinds of problems… chances are, many of them are scams. What they usually want you to do is pay them a fee up-front for a service. And what the FTC is telling us is that many of these services are not legit.

So what happens is you ending up paying these companies a bunch of money… and in the end… you still have the same bad credit.

You can repair you bad credit over time… but there are no quick fixes like some of these companies want you to believe. So do yourself a favor and steer clear from falling for these claims the promise you the world… but yet, can’t deliver on what they promise.

In my next blog post… I’ll give you some practical tips and tricks to help you develop a sound plan to get your credit back in line the proper way.

Be on the look-out for it coming soon.

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My Personal Bad Credit Story…

Back in the early 2000′s (almost 10-years ago)… I made some very bad business decisions which led to my bad credit.

I was the entrepreneurial type.

I didn’t want to go to school and get a degree just like everyone else. Instead, I wanted to find a career where I controlled my destiny. I didn’t want to have to answer to anyone. And so that’s why I decided to go into business for myself.

The only problem was… I didn’t know how to put together a business plan, nor did I have the patience to learn how. I was always looking for short cuts. So instead of getting a small business loan from the bank to help me start up my new business… what I did instead was finance my business using personal credit cards.

Big mistake.

I tried business venture after business venture. And because I didn’t know what I was doing… I’d fail every single time. And with every failure… came more debt. I kept piling on the charges over 12-different credit cards. And ultimately, I just couldn’t keep up. That’s what led to my bad credit.

When I could no longer afford to pay my credit card bills… that’s when I knew my credit was shot. So what this blog is all about is my journey of many different things I’ve researched and tried to repair my bad credit.

If you’re in the same boat just like I was… and you can relate to my story… follow along and subscribe to my blog as I share with you the do’s and don’ts of how to fix your bad credit.

Stay tuned.

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