It's not the end of the world if you have bad credit or none at all. Many people think they just have to wait for things to get better. There are some things you can do to get your credit back in good shape.
Most people don't think much about credit until they really need it. When they try to get a credit card, they find that their bad credit keeps them from getting one or from getting one with a good rate. Most people want to be able to pay their bills and keep their credit in good shape. No one wants to be seen as a deadbeat by their credit card company, but they cannot get a credit card because they have had a few tight financial situations in the past. There is a way out of this situation.
There are a few companies out there that know what you're going through and want to help you improve your credit score. These companies offer credit cards that require a deposit. A secured credit card is one that you put a deposit on. The amount you put on the card determines how much credit you can use. You can use it like a credit card, but you can only buy things up to the amount you put on it (similar to a debit card). Before you apply for a secured credit card, you should make sure that it reports to the major credit reporting agencies. If they don't report, that card is just a debit card with a fancy name. When a secured credit card sends a report to one of the major credit reporting agencies, it shows that you are paying off your debts and are therefore less of a credit risk.
Here's a quick example of how these cards work in real life. At first glance, it seems to work like a debit card. Imagine that you put $200 on your secured credit card. Then, you go to the store and buy something for $20. Your account balance drops by $20 almost right away, to $180. The important thing about these cards is what happens when the credit card company sends your information to the major credit reporting agencies (the better secured card companies will report monthly). Simply put, the credit card company will tell the reporting agency that you used your credit card to buy something for $20 and paid for it. From the point of view of the reporting agency, you are living up to your charges. Someone who does this is a good borrower. Even if you have had credit problems in the past, the reporting agency sees that you are less likely to not pay back your loans now. This makes your credit score go up. After a while, other credit card companies will find you more appealing, and it will be easier for them to give you a traditional credit card.
Improving your credit score is not a simple or quick task. There are a lot of other things that can affect your credit score, but this is one thing you can do by yourself. A secured credit card might not fix really bad credit, but for many people it's a step in the right direction. It won't send your credit score soaring into the high 700s either. It will take some time, but it's better than doing nothing and hoping things will get better on their own.
Before you apply for a credit card, you should read and understand its "terms and conditions."
