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What to do when low credit rating affects credit card applications

So you’re in a financial rut because of a low credit rating affecting credit card lines. There is something you can do about it to restore a healthy financial situation and improve credit worthiness. One thing you should not do is to apply for multiple credit lines in the hope that you will be eventually approved. We take a look at ways where you can improve your financial outlook without paying exorbitant amounts of money.

Options

One of the first things to do when you get a low credit rating affecting credit card application is to verify that your credit report is accurate. You can opt for a paying (Experian, National Hunter, Equifax) or non-paying (Noddle/CallCredit) service to obtain your personal credit report. Once you have your personal credit history, check for accuracy or discrepancies. When there are errors, these can easily be rectified by calling the agency which produced the report. Be sure to have the proper documentation on hand to verify your claim. If you really have a low credit rating, the next step is to look at your options.

  • Compare credit card offerings and other financial instruments

The key here is to look at offers from financial companies offering a line of credit. Since you pose a risk for them because of your poor credit rating, it is not unusual to get an offer with higher interest, repayment rate and low credit limit. However, there are companies which offer feasible schemes in terms of lower APRs and interest rates. Take a look at comparison sites such as Money Supermarket, TotallyMoney or Money to see available offers. Inquire by email or arrange a meeting with a representative to discuss their offers. You can also do a spreadsheet to decide which ones are affordable given your poor credit rating.

  • Use a credit card to improve rating

Once you are approved, use credit wisely and responsibly. Stay within limits and pay off balances on time so you can slowly but surely restore your good credit rating. However, don’t make the mistake of falling in the same trap which is why you have a bad credit report in the first place. Try to pay off more than the minimum monthly payments and tackle the debt itself rather than just paying interest rates.

  • Consolidate credit lines

Keep the number of credit lines to the minimum for easy management. Take advantage of transfer balances offers and use companies which offer this service to pay off debts without the prohibitive costs. When consolidating balances, be sure to close transactions with the previous provider.

Better access

Having a low credit rating affects credit card applications, but it does not mean that this is the end for people in such a situation. Shop around for the best offers and check what you can afford realistically. Once you have your line of credit approved, use it responsibly for a healthy financial situation and access to other types of loans.

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