Rating your credit potential
With the "Credit Crunch" really starting to bite, you may well wonder what is going to happen to low rate credit cards. The worry is that the credit card companies offering these cards are going to decide that they are no longer viable, and that low rate cards are going to go the way of 100% mortgages. If you are worried about low rate cards and concerned about what may happen to them, there are things you can do to maximise your chances of getting accepted.
If so many credit card applications are being denied, then how can you get accepted for a low rate card? There are some things that you can do to improve your chances. All of these concern what is known as your credit rating. A credit 'rating' is not a score - it is a file listing your credit history. Your credit file contains details of repayments you have made or missed, agreed spending limits and so on. It is this file that is examined by financial service providers when you apply for credit of any sort. Previously rejected applications are recorded as well, and can affect whether you may be accepted for future credit. Too many rejections are not a good sign to financial companies.
When you apply for a credit card the bank offering the card will take a good look at your credit history, more commonly known as your credit 'rating'. The word rating is misleading because it implies a score of some type. Your credit history is a lot more than just a number. Your credit rating is held by three main credit-referencing agencies, specialising in monitoring people's financial 'character'. This report provides information on repayments that you made or missed, your credit limits, when you applied for cards and other relevant information. The decision to issue you with a credit card will depend on the report the credit card company receives from the referencing agencies.
With the current economic downturn, the number of people being approved for low rate credit cards is falling. Whereas in the past credit card companies would overlook minor flaws in a person's credit rating, nowadays they are much less willing to be so forgiving. This means that if you missed a few payments last year you may find yourself being declined, whereas six months ago you may have been accepted. The first thing that you will need to do if you want to apply for a low rate credit card is find out what your credit rating actually is. This is a simple matter of contacting one of the credit reference agencies and asking for a credit report. There is a small fee for this service. When you get your report check it thoroughly, as the referencing agencies are not infallible and mistakes can be made.
If you find that your credit history is less than glowing then don't panic - there are a number of things that you can do to improve it. As credit reference agencies monitor the way you handle credit, the best way to improve it is to deal successfully with other types of credit. For example you can apply for a store card and use it frequently, paying the balance off in full each month. Or you could take out a small loan. You have to prove yourself to be a model customer. As a result, you are more likely to be accepted for other cards in future.
Low rate credit cards are on the decline but they haven't disappeared completely. If you want one of these cards then you are going to need to work hard to improve your credit rating. If you work on your rating for a while and then apply for a card you may well find yourself being accepted. However, if you are rejected, do not apply for a card with a different provider immediately, as being declined is also recorded and can harm your credit rating. Work on your credit rating some more and apply again in three months time, when you have a better chance of being accepted.
If so many credit card applications are being denied, then how can you get accepted for a low rate card? There are some things that you can do to improve your chances. All of these concern what is known as your credit rating. A credit 'rating' is not a score - it is a file listing your credit history. Your credit file contains details of repayments you have made or missed, agreed spending limits and so on. It is this file that is examined by financial service providers when you apply for credit of any sort. Previously rejected applications are recorded as well, and can affect whether you may be accepted for future credit. Too many rejections are not a good sign to financial companies.
When you apply for a credit card the bank offering the card will take a good look at your credit history, more commonly known as your credit 'rating'. The word rating is misleading because it implies a score of some type. Your credit history is a lot more than just a number. Your credit rating is held by three main credit-referencing agencies, specialising in monitoring people's financial 'character'. This report provides information on repayments that you made or missed, your credit limits, when you applied for cards and other relevant information. The decision to issue you with a credit card will depend on the report the credit card company receives from the referencing agencies.
With the current economic downturn, the number of people being approved for low rate credit cards is falling. Whereas in the past credit card companies would overlook minor flaws in a person's credit rating, nowadays they are much less willing to be so forgiving. This means that if you missed a few payments last year you may find yourself being declined, whereas six months ago you may have been accepted. The first thing that you will need to do if you want to apply for a low rate credit card is find out what your credit rating actually is. This is a simple matter of contacting one of the credit reference agencies and asking for a credit report. There is a small fee for this service. When you get your report check it thoroughly, as the referencing agencies are not infallible and mistakes can be made.
If you find that your credit history is less than glowing then don't panic - there are a number of things that you can do to improve it. As credit reference agencies monitor the way you handle credit, the best way to improve it is to deal successfully with other types of credit. For example you can apply for a store card and use it frequently, paying the balance off in full each month. Or you could take out a small loan. You have to prove yourself to be a model customer. As a result, you are more likely to be accepted for other cards in future.
Low rate credit cards are on the decline but they haven't disappeared completely. If you want one of these cards then you are going to need to work hard to improve your credit rating. If you work on your rating for a while and then apply for a card you may well find yourself being accepted. However, if you are rejected, do not apply for a card with a different provider immediately, as being declined is also recorded and can harm your credit rating. Work on your credit rating some more and apply again in three months time, when you have a better chance of being accepted.
About the Author:
Sophie Wright has been researching credit cards and the UK Card offers and is keen to create awareness about the offers availble to consumers by using compare credit card sites.
posted by Debt Consolidation Loan at
3:36 AM
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