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Published on May 25th, 2013 | by Pete

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Rebuilding Your Credit – How To Do It

Being rejected when applying for a credit card can be tough to take. When this happens, the first thing for you to do is to step back, take stock, and assess exactly why you have been knocked back. Using ‘bad’ credit cards to help you rebuild your credit is important, but only if you do things right. Failing to do so can leave you in a worse financial situation, so you need to be willing to play by the rules, and gradually rebuild your credit in the right way.

First, you need to question why you are being rejected. The financial crisis and the recession that followed in its wake saw huge changes in the way banks lend . Now, they are far more careful, and use convoluted credit scoring processes to determine who is eligible for their credit cards, and at what rates.

If you are being rejected, the chances are that your credit score is poor, or that you have a weak credit history. In such circumstances, it makes sense to check that your credit file is correct. If it is, it may be sensible to get a ‘poor credit’ report. When you have a clearer picture of your own credit profile, you can begin to focus your search on lenders that will offer you the credit cards for building credit you need.

If you struggle to get a card with a good APR, it will be important to begin rebuilding your credit score by getting the right sort of credit card. By getting the right credit card, and by making sure you use it properly (i.e. staying in your limits, never missing any payments, paying the balance in full each month if you can), you can either rebuild your tarnished credit score, or can build a good one from scratch.

The first thing to do, therefore, is to search for lenders that will be appropriate for you. That is, lenders who specialise in providing credit cards to those with bad credit ratings and credit histories. One option here is to go with aquacard, a lender who offer several cards to those with poor credit histories, those with no credit histories, and those who have defaults and CCJs against them.

When you apply for a credit card, you’ll learn quickly whether or not you have been accepted. Choosing lenders who deal with those with poor financial records will therefore give you the best chance of gaining approval.

The most important factor, however, will be to manage your account properly once you do get the green light. Remember, sensible use of your credit card is the only way to improve your credit rating in the long term and, while this can take time, it is essential that you do this to help you better your financial profile, and lower your risk in the eyes of financial lenders. If you have aspirations of getting a mortgage, for example, a good credit rating will be crucial in helping you get the best interest rates available.

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