| Bad Credit OK |
| By Credit Federal |
Published
09/28/2009
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Financial Tips
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Bad Credit OK for Unsecured Credit Cards and Secured Cards
Bad credit is OK for now, but what if the federal government shuts down bad credit lending? Read these free tips to improve credit with a secured or an unsecured credit card.
The credit industry; per the economy and federal regulation, typically offers either an easy approval environment with affordable interest rates, or credit that is mostly approved for better credit people or issued to bad credit people but at very high interest rates.
Apply for a bad credit card - click here
In a bad economy, credit card issuers are more selective with approvals, especially in regards to high credit limit cards. People with a bad credit report history of late payments, chargedoffs or collection agency actions, may not qualify for an unsecured credit card with more than a few hundred dollars limit.
Some people think they can simply payoff a credit card balance on an account which had late payments, and then cancel the account and all the bad credit report entries (late payment comments) would go away. Not true. They will; however, fall off the credit report upon the 7 year statute of limitations. Good news is, the 7 years is from the date of the last delinquency, not from the date the credit card was paidoff or closed out. More good news, is that as the late payment notices age over time, they become less damaging in regards to your score. Fresh, recent negative entries are more powerful than old ones.
But don't just focus on getting bad credit entries removed from your credit reports (and fix credit report errors), also work on getting new, positive entries added. Pay all your current credit obligations on time. Eventually the positive entries will outweigh the negative ones, and your credit score improves as well as your credit approval chances. By taking these actions you can improve credit and prove to creditors that you are now a responsible borrower.
As we mentioned before, credit cards for bad credit people will come at a high cost and with low lines of credit. Meanwhile; until you rebuild bad credit scores, if you don't want to pay the high interest rates of an unsecured credit card, consider a secured card.
Think twice before you opt for a high interest unsecured credit card versus a secured card... don't forget to calculate the interest rate into your monthly payments if you plan to carry a balance. We suggest you calculate the interest in two ways:
1) Calculate the total interest cost. Find out how much extra money you'll pay; in interest, to make a charge. With our credit card interest calculator, you can easily estimate the total interest of; for example, a $1,000 charge at 18% interest, with an expected repayment time of 6 months.
2) Calculate how long it will take you to payoff the charge. Use our credit card payment calculator to find out how long it will take you to payoff a charge, by sending in a certain payment amount each month.
Things look a lot different; and clearer, when written down on paper.
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