How to Get Back on Track With Your Second Chance Credit Card
A second chance credit card is basically an account that a credit company will accept even though you might have bad credit records or low credit ratings. Some might even approve you on a second chance credit card once you have filed for bankruptcy. In this case, the issuing bank makes a deposit on your behalf when you open up the account. The money from the deposit then goes towards paying off your debts. You can also use this money to buy products and services.
Even if you have a bad credit score or if your financial history is filled with problems, there are still some possibilities for you. It takes a little longer to be approved for a second chance credit cards but it is possible. If your credit report has errors that need fixing and you have not been able to repay previous debts, then the first chance company can help you out. If you want to maintain a good credit score, then you should take quick action.
The first chance lender might be a bank or a lending company. They will offer you a second chance credit card that you can use to pay off your existing debts. To be eligible for this kind of account, you must prove that you have a genuine financial problem that prohibits you from paying your debts. This could be an illness, a divorce or loss of a job. You can also get a card even if you are trying to rebuild your personal finances.
To achieve eligibility for a second chance credit card, the lender will require that you prove that you have been able to pay at least six payments in full and that you have a realistic plan to pay your debts. Besides that, you must also show that you have a good credit utilization record. This refers to the percentage of credit utilized as opposed to total debt outstanding. It is important that you do not exceed 50% of your credit utilization. In addition, you must have a good history of timely payments.
The lender will also check whether you have sound money management habits. They will want to see that you know how to save and spend your money wisely to avoid getting into trouble again. That way, you will be able to get back on track and mend your money management habits. With the help of your second chance credit card, your bad money management habits can be changed and you will soon get back on track to improve your credit score.
A second chance credit card is perfect for borrowers who have a poor payment history and poor to average credit scores. These individuals may not have sufficient time to fix their poor payment history due to various responsibilities at work and also because of their busy daily schedules. If you want to apply for such a card, you need to show that you have a steady source of income such as employment. As long as you pay your monthly bill on time, this will go a long way in boosting your fico score