Even though credit seems to be all around us these days, many people still have a difficult time getting their hands on some. Whether you have bad credit, no credit history, or can’t get credit for any other reason, the following tips will help you work the system so you can get the fast loan or credit card you need.
Tactical credit applications
The more times you apply for credit and don’t receive it, the harder it will be to get it at all. This is a downward spiral of credit application, and you can avoid it by using your best judgement about your chances of getting acceptance before you apply. If you know you’re not a good candidate for credit, go for the higher interest loans and credit cards right off the bat to prevent your situation from getting worse.
Ask for quotes
If you’re shopping around for credit, ask companies to give you a quote before making a formal application so that it’s not recorded on your credit record. It’s more effort, but your chances of getting a decent loan are far better.
Mail-out credit offers
Stop looking at those mail-out credit card offers as “junk” mail, and start looking at them as opportunities. Based on their marketing strategy, they clearly need people to sign up for their credit card and they may just take on a first-timer or someone with less-than-perfect credit. You could use this card to slowly establish better credit and apply for one with better terms later.
Go to your existing bank
If you already have an account with a bank, they are your best chance of credit approval. They are already aware of how much money goes in and out of your pocket each month and can tell if you pay your bills on time. They may consider you less of a risk because they already know you.
Go to a credit union
If you don’t already have a bank account, go straight to a credit union. They are generally more flexible than big, national banks, and may be what you need to get your foot in the door.
Get a cosigner
If you’re under 18 and don’t have a job, you will need a cosigner to get credit. This is someone who will assume responsibility for your bills if you can’t pay them. This is a good option for short-term loans and starter credit cards, as they generally have a small limit.
Become an authorised credit card user
If you’re a young person trying to get your first credit card, you can become an authorised user on a parent’s credit card. This means you’ll be tied to their account, and you will get an instant credit history.
Ensure accuracy of your credit record
Check your credit record regularly to ensure it’s accurate and up to date. In doing so, you will also notice if you have been a victim of fraud, or if your bad history is based on a mistake or misunderstanding.
Update joint accounts
People you have a joint account with affect your credit record. If you still have an open joint account with an ex-partner who has a spending problem, this could be hurting your credit rating.
Improve your credit
It may seem obvious, but surprisingly few people do it before they go looking for more credit. Cleaning up your credit record could be as easy as paying down debts such as student loans and lines of credit, or at least making solid payment arrangements and sticking to them.