It can be a stressful time applying for a new line of credit. Many consumers get upset when applying for a new charge card when they find out their FICO score is low, and they have poor credit.

A lower credit score can impact the amount of money that financial institutions will lend you. It can also impact on the rate of interest at which you borrow. In some cases, the difference between having an excellent credit rating and a poor one could be getting a 0% deal on your charge card, and paying an interest rate that touches 30%. Sometimes financial institutions won?t even lend you a dime, based on a low FICO score.

A variety of factors can impact on your FICO score. Generally speaking, lenders love stability more than anything else. Paying amounts owed on time is but one of many variables. It could be that you? I’ve lived in more than one address over the preceding three years; or having borrowings with a variety of institutions. It could even be down to the fact that you?ve got too much credit already at your disposal.

But just what goes into your FICO score? A report by the analytics experts Fair Issac recently broke credit scoring down into five categories and assessed their importance on the final rating.

Most important was how you had paid you bills in the past with the most emphasis on recent activity. Naturally, paying all your bills on time is good; paying them consistently late is bad. Having accounts that were sent to collection agencies is even worse, though nowhere near as bad as declaring bankruptcy. Paying your bills in a timely and consistent manner contributed to 35 percent of the score.

Next most important was the amount of cash you owe and the amount of available credit at your disposal. The assessment of outstanding debt fell into several categories, and included charge card accounts, car loans, mortgages, home equity lines, and so on. Also given consideration was the total amount of credit available. If a customer has 10 charge card accounts that each have $10,000 credit limits, that totals $100,000 of available credit. Generally speaking, consumers who have a lot of credit available tend to use it. This makes them a less attractive credit risk. This amounts to 30 per cent of the total credit rating.

Also impacting on credit ratings is the length of credit history (15 percent). The longer a customer has had credit ? particularly if it’s with the same financial institution ? the more points they get.

The mix of credit contributes 10 percent to the FICO rating. Customers with the best scores have a mix of both revolving credit, such as charge card accounts, and installment credit, such as mortgages and car loans. Statistically, consumers with a richer variety of experiences are better credit risks. As far as banks and credit card account companies are concerned, they know how to handle cash.

The last important factor taken into consideration is new credit applications (10 percent). If you?ve applied for several lines of credit in the past few months this will negatively impact your FICO rating.

The antidotes to this are simple. Pay your bills in a timely manner, particularly in the months leading up to an application. Close unused retail store cards, credit cards and old bank accounts with overdraft facilities. Maintain long-standing and healthy arrangements with banks and other lenders. Don?t apply for a stack of credit cards, loans and so on, unless you?re absolutely sure it?s the right product for you. It goes without saying that you shouldn’t apply for a credit line unless you use it.

There?s a sixth factor that can contribute enormously to a negative credit rating. In 2001 it became possible for customers to get their own FICO score in exchange for a small fee. In the past, prospective lenders were able to keep this score hidden, and many unscrupulous institutions used this knowledge to charge a higher annual percentage rate on credit. By being aware of your credit rating lenders can’t lie and say your score was low and charge higher annual percentage rate on your credit card.

More importantly, it?s vital that you get rid of black marks on your credit rating. Errors unfortunately happen all the time, and erroneous reports of missed payments, referrals to debt collectors and even bankruptcies can scupper your chances of getting a low rate of interest and even a charge card altogether. Query everything and haggle with credit reference agencies so that only the information that is listed on your credit history that should be there, is there.

You can find out your credit history by applying to one of several companies. Many offer an online service and can furnish you with the information both quickly and cheaply. Equifax, Truecredit and Consumerinfo are some of the best such providers.

Patience is the key to getting a great credit rating ? and the best credit deals. You?re never going to make the jump from having a credit score of 500 to one of 700 overnight, but by implementing easy to follow and practical strategies, you can quite easily leverage your credit score to a rating that is respected by all concerned.

This article is brought to you by www.JemCreditCards.com – Not Just Credit Cards, We Create Financial Stability! Compare the best charge cards including Discover cards, Chase credit cards and much more! Also, enjoy our free open to community blog where you are free to read and write articles in our database!

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Reasons for Providing Credit Cards

The approval for a secured credit card is not based on the applicant’s credit history but in the capability to submit the required security deposit. Hence, even with a low credit rating or even if you have yet to build credit history you can easily obtain a secured charge card.

The security deposit may start from $200 to $500 depending on the issuer. Most secured charge card account issuers provide a credit line that is equal to the amount of security submitted. On the other hand, there are also issuers who may provide a credit line that is lower or higher than the amount of security deposit.

The deposit will be used to pay for the charges, in case the cardholder fails to submit payment on time. Some issuers will immediately tap into the security deposit if you fail to submit your payment for the month by your due date. Sometimes, the issuer may wait until there are two consecutive misses before using the security deposit to pay off the past due charges.

By requiring a security deposit, the issuer of the credit card can be confident that funds will be readily available, should the cardholder defaults from payments.

Benefit from a Credit Card for Bad Credit

Acquiring a bad credit credit card account gives you the opportunity to prove that you can manage debt and repayment. As you regularly utilize your credit card account and submit your payments on time, you are also making an improvement in your personal FICO rating.

After at least 12 months of regular use and payment, you should be able to enjoy an upgrade to an unsecured charge card account to enjoy lower interest rate and to eliminate the need for a security cash deposit.

Sometimes, a credit card advertised as a bad credit charge card account may not offer credit reporting provision. Hence, no matter how consistent you are with your payments, you will not be making any progress with your credit at all. This is why it’s important to choose a secured charge card account that will report your monthly payments to the three major credit reporting agencies.

This article is brought to you by www.JemCreditCards.com – Not Just Charge Card Accounts, We Create Financial Stability! Compare the best charge cards including American Express cards, chase back cards, and much more! Also, give and receive free financial information at our open to community blog!

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The official “bankrupt” statusis partially ignored by most credit driven businesses after a period of 7 years duration which should see your credit rating improve one day. Although the status of “bankrupt” will not completely destroy your life, it will sometimes make living it that little bit harder. Le me tell you how…

Events like Christmas have been harder to deal with in recent years, as purchasing gifts on credit from catalogues was no longer an option in the wake of being credit blacklisted with seven children at home, this had become the standard way of dealing with the children’s Christmas lists (explains a lot, huh?) Purchasing goods or paying bills online became extremely difficult task as my mother’s bank refused to let her have an account with even a debit card attached, let alone an actual credit card.

Usefully, my mother was able to get a Vanquis bad credit credit card during her (nearly over) period of bankruptcy, so her ability to buy on the WWW was not hindered too much.

A week ago, my mother decided to apply for a mobile phone contract with a popular network provider in order to get her hands on a 3G phone. Her application was refused after the network had completed a credit history check on her though, so she will be continuing to use her beaten up Nokia 5110 for the time being.

Mother has vowed to never again borrow on credit the best decision she could make considering the increased rates of interest for the previously bankrupt!

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What is a secured credit card? A secured credit card is secured by a monetary instrument such as a savings account. The quantity of credit that you are extended is determined by the amount of cash in the savings account. You can discover secured credit cards for as low as a few hundred dollars and higher limits as well, depending on the credit card firm.

As you are staking your own funds to secure the credit card, be prepared to shell out interest rates and other costs in association with the card. This is how the credit card business makes their cash. Since you would have to pay interest and fees with an unsecured credit card, this is really reasonable to expect.

What must I look for in a secured credit card?

Initially, you want to be sure that the credit card corporation reports to all three of the credit reporting businesses so that you will rebuild credit in the process. You should shop around for interest rates, service rates, and examine the card agreement terms prior to signing up for the card.

Where could I uncover one of these credit cards to rebuild credit?

Most major banking institutions and monetary institutions provide secured credit cards such as B of A, Wells Fargo and Chase bank, but they provide no customer benefits or perks that companies specializing in secured credit cards do. In fact, they only offer you secured credit cards in their portfolios mainly because they have to. If you are looking for added customer advantages, such as points, miles, and merchandise credits, you need to opt for a credit card from somewhere OTHER than a main bank. There are an endless amount of secured credit cards to choose from.

There are also secured credit cards that transform to unsecured credit cards after a certain amount of time. When this takes place, your savings account is no longer required to secure your line of credit. By this time, your credit rating is high enough that you can commence shopping around for better interest rates and agreement conditions. As long as you continue to pay your credit card as predetermined and retain your personal finances in check, then your credit score will continue to rise.

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