A Guide to Credit Cards for Bad Credit No deposit
In case you did not know, there are actually credit cards for bad credit with no deposit. With that being said, banks and other financial institutions such as lending companies give people a great deal by offering a chance to have a credit card despite the bad reputation.
The good thing is that it does not mean that you can no longer apply for a credit card and have your application approved.
Nevertheless, having a poor credit does not necessarily mean that you are not allowed for any financing options. You just have to keep an eye on your score which you can check for free. Banks, government agencies and other institutions dealing with finance routinely check credit scores for a variety of reasons.
The terms and conditions, as well as the rates and fees for these credit cards, differ from one another. You can expect higher rates and strict rules when it comes to monthly dues payments.
Now the question is how do you apply for the best credit cards for bad credit with no deposit? Read on to know more valuable information about it.
What is a Personal Credit Score?
A credit score also called as a FICO score is one of the types of credit score developed by the Fair Isaac Corporation. Borrowers take help from it to understand the credit risk of lending to their customers. The ultimate users are the credit lenders but nowadays even employers keep a check on their employee’s credit standing.
How to Determine your Credit Score’s Standing?
For you to be fully in charge of the state of your money matters, you have to get your credit report so you are aware where you stand. This is crucial because the first thing the auto financiers will want to look at is your score in a bid to avoid people with bad credit.
You can check your credit score with your credit card givers or have a credit counselor to discuss and explain your score to you.
Additionally, you can visit consumer credit reporting organizations and purchase your credit scores or even go to a website that calculates your score for free.
To be able to know where your credit score stands, you can get an access copy of it on the main credit reporting bureaus. Knowing your credit score is necessary whenever you wish to inquire about a loan application and you talked about your financial needs.
All your inquiries and details regarding your credit score stance will be answered. So if you have a bad credit car dealerships history, your car loan can still be approved with the help of various financial institutions and credit unions.
With that being said, check the list underneath to get an understanding of how some banks consider your credit score. However, some lenders are there who don’t prioritize to check your credit report.
- 720+ relatively good personal credit score
- 680+ good credit personal credit score
- 640+ average credit personal credit score
- 600+ slightly bad personal credit score
- 580+ poor personal credit score
- 525+ bad personal credit score
- 480+ the worst personal credit score
To sum this up, a relatively good personal credit score ranges from 300 to 850. Having your score 800+ is exceptional. 740 to 799 is a good score. 670 to 739 represents as an average credit score.
On the contrary, a personal credit score that ranges from 620 to 679 is considered to be the borderline score, 580 to 619 low credit score making 300 to 499 bad credit score. Thus, the ones falling in this category will have to improve their credit standing by following the given measures to improve their financial credibility.
Understanding the Implications of a Personal Bad Credit Score
Having a bad personal credit score has its implications and there are side effects that can really affect the financial aspect of your life. If you have poor credit standing, do not worry some of the mistakes can result into low credit score but it won’t affect you, as you can improve your credibility and be able to get more credit from institutions.
Contributing Factors of a Bad Credit Score
If you have poor credit standing, do not worry too much about it. Tell you what, some of the mistakes can result in a low credit score but it won’t affect you, as you can improve your credibility and be able to get more credit from institutions.
So before you even start applying for a credit card, it helps that you understand your current credit standing and the circumstances that surround it in order to make better financial choices in the future.
- One of the main problems of having a bad personal credit score is that loan applications and credit cards are much more expensive. Banks and other financial companies will usually charger higher interest rates and annual percentage rates (APRs). This is so as to keep their business funds running and to keep the company’s operations up and about.
- In terms of loan approval, there is a big chance that your loan or credit card application might be denied.
- It can be really difficult for you to apply for a mortgage or even renting an apartment in some countries.
- In some cases or countries, a poor personal credit score can affect your employment opportunities. How is that so? Well, remember that credit card unions and other financial companies have the power to file a case against you or sue you for the financial trouble you have caused to their company. Do not belittle this financial matter, the amount of debt that you owe from a certain company have something to do with the case that they have filed against you. The case may not be bailable, especially if you owe hundreds and thousands of money from the company. A non-bailable case means that you do not have the power to bail yourself (or any person in particular) out of jail. This means you are left with no choice but to serve and finish your sentence while you wait for the next court hearing no matter how long it is. In addition to that, a bailable case is something that you can bail yourself out of jail from. However, this does not mean that the case is closed, it is still pending and you will have a criminal record which will affect your employment and other career opportunities. If you fail to attend a court hearing, the court will release yet a new warrant of arrest and the authorities will look for you wherever you are, you cannot escape the law! If you do, you will be living in a hideout forever and your case will remain in your record.
To know more about the contributing factors of a poor credit score, but does not affect you as a credit card and/or loan applicant. Feel free to browse more of our informative blog posts here in Bridge Payday.
How to Improve Personal Credit Score?
You can start rebuilding and improving your personal credit score anytime. As long as you are committed to making the necessary changes and improvement, you can definitely do it. It simply starts with discipline and the commitment to pay in a timely manner.
In case you did not know, most credit card companies will deny your application. But you will still find some financial companies that offer credit cards specifically for people who have bad personal credit scores and poor credit reports.
The more your credit reports improve, the better the financing options, the more you will save on the interest rate. While it is easier said than done, all you have to do is use your credit card responsibly to have a good credit rating.
Request for a Copy of your Credit Report
What you need to do is to request for a certified true copy of your personal credit report from your credit union or credit bureau.
With that being said, the primary step is to get your credit checked. You can get your credit reports requested from Equifax. Look for the best financial institutions and get your report read to see if you are on the right or need to improve it in just 30 days.
Seek Help from Financial Advisors and Moneylenders
Feel free to also ask questions from financial advisors about what you need to do to improve your personal credit score apart from paying in a timely manner. These professionals or experts can also give you a variety of recommendations on how you can be debt-free and attain financial freedom and/or stability.
If you run your own business, you can hire a business analyst or approach them. Feel free to ask for advice and business-related questions so that your business will reach success and prevent potential bankruptcy.
Steps on to Rebuild your Personal Credit Score
To maintain a perfect or good personal credit score is not always viable. Your credit score can be poor due to various genuine factors. You might be in a financial distress due to an emergency or you might not be able to repay your previously acquired loan amount due to your career downfall.
There are several valid reasons for not paying the debt and thus resulting in a poor credit history. With that being said, there are simple ways for you to improve your personal credit score history without much trouble. Without further delay, here are the steps to improve your personal credit score:
Correction of Errors
Rectify the mistakes made by recording late payments or defaults. Pick up your phone and get them rectified. Back yourself up by writing a letter making the same request to the top credit bureaus and bring into their notice about the pending changes in your report. This will help you get a clear ground in the eyes of financial institutions who actually keep your financial reports on the basis of which FICO is calculated.
Authorization of a User
Having low consumer credit, you can have members of your family with good credit standing upfront to help you out as customers with a poor credit usually pay higher interest rates and heavy annual percentage rates than those with a good FICO score. Therefore, if you add names of such members in your account showing them to be authorized user you can have better financing options in the future maintaining your score.
Add to your Available Credit
Your credit history serves as a strong foundation when you plan to borrow. Knowing your available credit give a boost to lender and confidence to finance more. Your finance options can be raised with the help of various financial institutions and credit unions.
Avoid getting your statement blemished by default in your payments. Negotiate and pay partial amounts to get away with the bad impression on your statement. Discussion lead to favors creditor might on your goodwill forgive your few late payments which will help you for long-term by improving your FICO score within a month.
Rationalize your Debts
You should divide your loans in a ratio that a creditor does not get suspicious about unsecured loans you have or consumer can apply for debt consolidation loans to better manage and be better at financial footing.
Making your payments on time is the largest contribution to improving your score. In order to keep on improving set up reminders and do not miss out on dates as it will have a negative impact.
Cut Off Debts
The first thing to do is to stop using your credit card, check on your accounts as to what interest rate you are being charged on then frames your budget on actually paying those as early as possible. This will eliminate your debt burden and will prove better for your credit image.
Avoid Additional Expenditures
As difficult as it might be, try to minimize extraneous expenditure in the time before you apply for the loan. Make payments on time. Do not make any major purchases. Most importantly, do not apply for new credit cards.
Get A Pre-sanction
A pre-sanction from your bank or credit society will give you a figure from which you can work out other modalities. Contact the agency through which you have decided to get a loan and ask them for a pre-sanction letter. If they decline, your car dealer could help you get in touch with an agent who deals in such matters.
Pay your Bills on Time
Keep your statements clear from and keep your debts balanced these are the keys to a good personal credit score. You must do your best to maintain a good credit rating and a clean credit history to get the best of scores. After all, credit reports with no financial discrepancies will no longer need to do the following steps above. With that being, said it is feasible to maintain your score.
Given the following pointers above, the only way to prove you can improve your free FICO credit score is by changing the way you handle your finances. You should pay your bills on time, keep your credit card balance low and avoid taking big loans and avoid credit cards.
Qualifying for a credit card when your credit score is bad means no late insurance and rent payments and no more additional debts. Taking these steps will help you rebuild your credit before you set out to take a car loan and make you more marketable to auto loan givers.
Should you get a credit card?
Many people may think that getting a credit card will only cause problems such as drowning deep in debt. This will only be a problem if you allow mismanagement of finances to happen. Even for people with poor credit, it is recommended that they apply for a credit card.
Contrary to that, some credit card companies do offer a 2nd chance to clients with poor credit. The higher interest rates mean that these loans with bad credit are profitable. Having said that, make sure that you shop around for the best loan term to improve the FICO score (credit score that is computed by the Fair Isaac Corporation).
There is Hope for You
Just because you have poor or low credit score does not mean that you will be rejected right away. There are companies that specialize in providing credit cards for people with bad credit.
If you can use a credit card wisely, you can use this opportunity to start repairing your credit and building your confidence once again. It may take some time and strong discipline on your part. But it is definitely not impossible. That is why once you have a credit card, you need to make sure that you use it the right way.
Unsecured vs Secured Credit Cards
Even if you have bad credit scores, it does not automatically disqualify you from getting a credit card. In fact, you can have a choice between getting an unsecured or a secured credit card. How do these two cards differ?
Secured Credit Cards
First off, a secured card means that you need to have a cash deposit before you can use the car. Most banks make use of the deposit as a credit line which you can use for your purchases.
In order for you to increase your credit limit, you can actually add more deposit. Many people might ask, how is this different from a prepaid MasterCard or Visa card? This type of card is different in the sense that the bank or the company that offers this card actually reports to the major credit bureaus.
Unsecured Credit Cards
The other type of card is known as the unsecured credit card. It is different from a secured card because it does not require the client to get a collateral, also known as a co-signer, co-guarantor, or co-maker.
This only means that you don’t need to pay any deposit and the credit limit that you can get is basically upon the assessment of the lender. They usually look at your payment records, credit score, and credit reports.
The question now is, which one would you choose – an unsecured credit card or a secured credit card? It actually depends. If you have a credit limit and if you qualify for at least a manageable amount as your credit limit.
With that being said, we highly recommend you to choose an unsecured credit card. For this type of credit card generally have more affordable fees and they can give you a higher credit limit.
Top 7 Best Credit Cards for People with Bad Credit – No Deposit Required!
Most financial companies offering secured credit card also have perks that you don’t really find with unsecured cards. Without further ado, listed below are some of the best credit cards when you have bad credit with no deposit:
Journey Student Rewards FROM CAPITAL ONE
This card is a good choice for students who want to start building their credit. The card is readily available to almost anyone. Even if you are not a student, you can still apply for the credit card. This card offers the following features:
- You can earn 1% cash for your purchases. In addition, when you pay on time, it can go up to 1.25%.
- The card is designed for students with limited credit.
- When you made 5 consecutive payments on time, you can have e better credit line.
- There is no annual fee.
- There are no foreign transaction fees.
- They offer an annual percentage rate of 26.99%.
Credit One Bank Platinum Visa
Dubbed as one of the top choices that you can use to rebuild your credit, the Credit One Bank Platinum Visa is an unsecured credit card that allows pre-qualification process without affecting your credit score. In getting this card, you can expect to have the following:
- The application process is not that difficult. They allow you to have pre-qualification without negatively affecting your credit score.
- This credit card enables you to start rebuilding your credit as they report to credit bureaus on a monthly basis.
- When you pay on time, your credit line can actually increase in the long run. On top of that, you can also receive one percent cash back for specific purchases.
- They also have features that allow you to make easy bill payments.
Fingerhut Credit Card
The Fingerhut company was established 60 years ago and over the years, they have been specializing in retail. Eventually, the company has ventured into stored credit cards. They have an unsecured card that allows you to track your credit and at the same time to use it to purchase certain items. In getting this type of card, you can actually have the following:
- The application process is not too strict. You will know if your application gets an approval within the day.
- The company reports to the three major credit bureaus, so if you are paying your dues on time, you can actually use the card to start rebuilding your credit.
- With the Fingerhut Credit Account, you can use this line of credit to purchase items from brands like Sam so, Dewalt, KitchenAid and a whole lot more.
- The only downside of this card is that it is not an access card.
First Access Solid Black Visa
Another good option is the first access solid black Visa credit card. This card has been getting good reviews from people who have already used it. To get an approval, you don’t need to have a perfect credit score.
- The company reports on a monthly basis to the three major credit bureaus, which means you can use this card to improve your credit score.
- Depending on your record, the application process is not that difficult. It is very fast. You can also apply online.
- Once your credit card application gets an approval, you need to pay for a processing fee for you to have the $300.00 credit limit.
- This is a VISA credit card that you can use for online shopping.
This credit card also gets good reviews. The only thing is that if you want to get a Total VISA credit card, you must have an active checking account.
- Although this credit card requires you to have a checking account, you are likely to get an approval anyway
- This is a legit credit card which you can use to make online purchases.
- When your credit card application gets an approval, you just need to pay for the processing fee.
- The company reports to the monthly to credit bureaus so you can use this to increase your credit score and start rebuilding your credit.
Net First Platinum
This credit card is specifically for people with the poorest personal credit score. By getting a Net First Platinum card, you can have a $500 credit line. The annual percentage rate is 0%. Other features of this card include the following:
- The approval process is quite fast. There is also no need for employment/credit check.
- The company reports to major credit bureaus so you can use this credit card to start rebuilding your credit score.
- You can also submit your application online.
- Use the credit card to purchase items from merchants online.
With the Milestone Mastercard, even if you have poor credit, you can still apply for a credit card. The annual percentage rate for this card is 23.9% and you need to pay for the annual fee amounting to $35. Other details about this credit card include:
- They offer a pre-qualification process so you know if your application gets an approval or not. With pre-qualification, it will not affect your credit score.
- For people with bad credit, they can still apply for this credit card.
- You get to have a mobile account that enables you to access your account information any time.
- You have fraud protection feature for the stolen card.
- The automatic report which updates your credit history to the credit unions and bureaus, this feature makes it easier for you start rebuilding your credit score.
Other Options for People with bad credit Scores
Should you consider a secured credit card? In cases where you are really having a hard time getting an unsecured credit card, you might want to try to apply for a secured credit card. You just need to pay for the deposit.
But the good thing is that the deposit that you put down is actually your credit limit. Looking at it, getting a secured credit card is not bad after all. Here are some other credit card options that you can consider:
Capital OnE MASTERCARD
This credit card is a good choice if you are looking for an unsecured credit card for bad credit as it does not have an annual fee. You can also have the following features.
- It is not a prepaid card since you can use this card to build your credit. If you know how to use the card the right way, you can use it to increase your credit score as Capital One reports to the major credit bureaus.
- There is no annual fee so you never have to worry about any additional costs.
- When you make an initial security deposit, you get to have a line of credit amounting of $200. However, it is important to note that the amount that you get will depend on creditworthiness.
- You can easily manage your online account 24/7.
- Any automated teller machine that accepts Mastercard honors this credit card
- After 5 months of continuous on-time payments, you can have a bigger credit line.
- The annual percentage rate is 24.99%.
First Progress Platinum Elite MasterCard Secured Debit Card
- The application process is easy.
- You can use your tax refund to fund your credit card.
- With their expedited processing option, getting your card is quite fast.
- The company does not require a minimum personal credit score upon applying
- They report to major credit bureaus.
- You can have 24/7 access to your account online.
Applying for a Better Credit Card with no deposit
You will notice that in most companies, you will have the opportunity to increase your credit limit. Some may also allow you to change your credit card and get that card where you can enjoy certain perks and rewards. However, your goal is to have a better credit card that will not require you to pay higher fees.
How Long Does it Take to Improve a Credit Score?
The time it will take for you increase your credit score depends on several factors. As such, there is also no specific number of days where you can be sure that your credit score will improve. Again, it is about how often you use your credit card and the how you deal with the transactions. If you are using your credit card all the time and also make on-time payments, then it will take a few months for you to see big changes.
After a year, if you are consistent with your payments, you can definitely see major changes. From here, you can start applying for other credit cards that may offer you better terms, deals and even reward programs.
Having your own credit card is still a very useful tool. When used responsibly, you never have to worry about your mode of payment. On top of that, you can also monitor your expenses and establish your credit. In the end, it is just a matter of being financially responsible in how you handle your finances.
A poor credit score puts you in a difficult position simply because you don’t have access to various credit options that will give you affordable fees and the best terms that you could possibly get.
That is why it is essential that you are able to get either a secured or unsecured credit card. You need to manage your finances well.
These give you the opportunity to start rebuilding your credit score so that in the long run you are in a better financial position.
With good credit standing, you have access to several credit options and never have to worry about really expensive interest rates.