When it comes to getting a credit card it is fair to say that consumers are awash with offers flowing from all places. The finance market provides stability for both consumers and businesses, but what makes a consumer a good choice for business and more importantly, less of a risk to a credit card business. Through fitting in a category of less risk, you will inevitably get a better deal as a customer and ultimately get to borrow money for less.
The uneasy paradox for most is that because they need to borrow money, they also find they are in a position where they cannot borrow as much as they need. If you are in a position where you need to borrow money and you cannot, then the chances are that you have had the wrong approach in the past. What do we mean by this? You have seen getting credit as a way to borrow money in the long term, where the chances are you have not seen this as a short term fix, or a burst of liquidity that you will be able to finance by either expecting an increase of money in the coming months, or expecting a decrease in expenditure.
As a result of this you may have found that, where as before you could borrow money easily, you are now in a position where you cannot gain credit. This may have become apparent when you tried to get a loan for a car, or maybe you tried to get finance from your bank or a retailer. The fact is that if you have a bad record of paying debts, businesses inevitably see you as more of a risk, and credit card companies are no different.
If you expect you have a poor credit rating, then what should you do? The first step is to contact a credit reference agency, who may charge a small fee for their services. They will be able to provide you with the same information that they provide to their customers (such as banks, retailers, financial services businesses). They will be able to tell you for sure if your credit rating is affecting businesses likelihood of contracting with you.
So you have a bad credit rating, what should you do? Having a bad credit rating is not the end of the world. But what it does mean is that you are likely to get worse deals, and ultimately pay more for borrowing money. Firstly understand that this means you have to realign your attitude to borrowing money, and understand that financial products do not make you any richer, they cost you money, but have the advantage of allowing you to have what you can afford, quicker.
The next step is to look for offers that you are applicable for, and then cost them to find out what is the cheapest. Once you have chosen a credit card that suits your needs, and the one that is most cost-effective for your spending habits, then follow these rules to improve your credit rating and reduce the cost of borrowing over time.
1. Ensure that you pay all debts off on time and that you do not use credit as a means of long term financing. This is what bank loans are for.
2. Make sure that you deal with reputable companies that operate on a large scale as they will sell positive data to credit checking agencies.
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