Negotiating For Better Credit Card Terms
04/29/09
People with a poor credit standing have already seen for themselves just how hard it is to secure a credit card with good terms. If you regularly miss making payments on your credit card or worse, fail to pay them off entirely, you will likely be given a low rating by credit bureaus, which will in turn result in you having a poor credit history. No matter what your reason is for failing to make good on your credit card obligations, whether it is because of pure neglect or simply not having enough money, your resulting low credit score will make it harder for you to get a credit card.
So how do you get a credit card if you have a bad credit standing? The obvious solution would be to raise your credit score to a more favorable level. Credit card companies tend to give better terms on credit cards to people with higher credit scores. In addition, having a high credit rating will also make you eligible for lower interest payments on your mortgage and car loans.
Some of the ways by which you can increase your credit score are outlined below.
Check for any errors in your credit report and correct them. Since a mistake on your credit report can result in a lower credit rating, it is important to check these reports thoroughly before you apply for a credit card. This should be done well in advance, since correcting a mistake can take anywhere from one to three months and possibly even longer.
Pay your bills on time. One of the things that credit card companies look into when determining how eligible you are for a credit card with good terms is your payment history. Even a single missed payment can cause your credit rating to decrease considerably. Paying your bills on time is the single best thing you can do to raise your credit rating.
Pay off the balance on your credit card One other factor that will have an effect on your eligibility for a credit card with better terms is the amount of your balance compared to your credit limit. If you are interested in raising your credit score, keeping your balance below 25 percent of your credit limit is a good way to do just that.
Keep old accounts open People have traditionally opted to close their old accounts that were unused. The change in the way that credit ratings are calculated however has made it more feasible to keep older accounts open, thereby increasing your credit score. Closing your old accounts will not only shorten your credit history and decrease the amount of credit that you can have, but will also make your existing balance seem bigger when your credit score is calculated. Closing old accounts will also result in a only a slight lowering of your credit score, while retaining them may just improve your chances of getting a good credit card.
More Reading