If you’ve had a serious financial setback, it can really hurt your credit score… even to the point that you may not be able to get a conventional credit card. And if that’s the case, it can be very difficult to get your credit back on track.
First and foremost, you’ll want to try and clear up the worst of the mess you’ve made of your credit score. Pay off as many of your delinquent accounts as possible, dispute any errors that you find on your credit report, and start trying to rebuild your credit as soon as you can. But, how can you rebuild your credit if no one will give you an actual credit card?
Actually, there are a couple of good, solid options when you can’t get a conventional credit card –
Apply for a catalog shopping card, such as a Fingerhut Credit Account issued by WebBank . Catalog cards, and Fingerhut in particular, make it their business to work with customers who may not be able to get credit anywhere else. And even if you aren’t approved for a regular Fingerhut account, you may still qualify for their “fresh start” credit program, which would require you to put down a small deposit with your first order. Either way, with Fingerhut, you’ll be able to shop from among hundreds of thousands of reasonably priced, name brand products, with competitive pricing, and an interest rate that is inline with other catalog shopping sites. Plus, Fingerhut reports your responsible purchase and payment history to the major credit bureaus, so you can improve your credit score and still have the purchasing power you need. From personal experience, I’ve seen what opening a Fingerhut credit account can do to help you improve your credit score, and I highly recommend this option.
Get a secured credit card. Getting a secured credit card is the guaranteed way to have a credit card, even though it’s not exactly a conventional credit card. With a secured credit card, you’ll have to deposit money up front, and then the credit card provider will issue you a credit card with a credit limit that is typically equal to the amount of your security deposit. You’ll then use the credit card just like a conventional card, making payments towards any purchases you make, and they, in turn, will report your responsible use and good payment history to the major credit bureaus. Most secured cards have a very reasonable interest rate and many even convert to a conventional credit card after a certain period of time.
Either way that you choose to go, or perhaps both ways if you have the ability to do so, you will see the improvement that you need to see in your credit score as long as you demonstrate responsible usage of the credit that you get. Just remember, it takes time and determination to get back on track once you’ve had financial problems, but it can and it must be done!