May 20, 2012

Credit Card for People with Bad Credit

The current credit crunch has triggered a lot of would be credit issuers to tighten up their approvals for consumer applicants with bad credit.  Even those that are relatively new to credit are being squeezed out before they get a chance to screw up their credit scores.
Many have legitimate reasons for establishing or re-establishing credit.  One of the issues for those that are trying to establish or re-establish credit is that they likely have a good reason to do so.  A lot of the major credit issuers now require the consumer to have established credit, that it remains in good standing for a period of time, and they have ability to repay.  It’s a catch 22, (a problem that cannot be solved because the requisite for solving would require a fact of the problem to be untrue).  You can’t get credit unless you have credit.  This, from an industry that until 2007 gave out credit cards like they were concert fliers.
However, there are a handful of companies that are helping people establish credit or reestablish credit.  Companies like Horizon, and Orchard Bank continue to help people reestablish their credit scores.  These cards have a typically low credit limit, $250 – $1,500.  However, after a few months of paying on time, your limit can be increased.  Plus, you’ll likely be eligible for other lenders’ cards.
So, if you’re having a tough time getting a credit card from a traditional Wells Fargo, or Chase type bank, (tier one lenders), you should consider applying for an Orchard Bank Visa or Mastercard.  Establishing your credit with a lower tier lender is a good idea.  You can can then build up your credit and quickly establish yourself as a credit-worthy, low-risk consumer.  If you do that, credit issuers will be breaking down your mailbox to give you money.

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