If You Are Trying To Rebuild Your Credit Or Are Just Starting Out And Have No Credit History Whatsoever, Getting Approved For Your First Credit Card Can Seem Like An Insurmountable Task

Category: Finance, Credit.

If you are trying to rebuild your credit or are just starting out and have no credit history whatsoever, getting approved for your first credit card can seem like an insurmountable task. A change in strategy will put plastic in your wallet before you know it.

If you have applied for several credit cards and keep getting turned down, do not worry. One of the most common mistakes that people make when applying for credit cards is applying for the wrong card. Finance cards, on the other hand, are much easier to get. Major credit cards such as Visa, Discover and American, Master Card Express are very difficult for the first- time card holder to get. Finance cards are credit cards that are issued through a store or franchise and can only be used at that business. Granted, finance credit cards do not carry as much weight on your credit report as major credit cards, but they are a great way to start out.

Finance cards include cards issued by Target, Wal- Mart or Best Buy, etc. If you find it difficult to get a finance credit card, a secured credit card might be your best bet. Secured Cards. Secured credit cards are especially helpful if you have bad credit. A secured credit card is a card that is issued to you in exchange for a deposit in the amount of all or part of the credit limit. Why? It may sound ridiculous to pay$ 500 to get a$ 500 credit card, but a secured credit card can be a major boost to your credit standing.

If you get the right card, a secured credit card can have as much impact on your credit report as a major credit card. Getting a card that reports the credit limit is very important. When you apply for a secured credit card, you should be sure of two things: that the card will report your credit limit no matter how low it is and that the card will not show up as a secured credit card on your credit report. This is due to the way that credit scores are calculated. This means that a card with a$ 1000 credit limit should carry a balance of$ 250 or less. In order to score well, your debt ratio on revolving accounts should be less than 25% .

If your secured card does not report the credit limit, credit reporting agencies will use the total amount charged as the credit limit. It is also extremely important to make sure that your card will look like any other major credit card on your credit report and not look like a secured credit card. This will make it seem like your debt ratio is 100% . If your credit card company reports your card as secured, your credit score will be negatively impacted. If you go about it the right way and apply for the right types of cards, you will be approved before you know it. Getting your first credit card can seem impossible, but it is not.