How to Get an Unsecured Line of Credit With Bad Credit
Credit card companies and banks provide unsecured lines of credit to customers in the form of credit cards. Even those with bad credit may qualify for a small unsecured line of credit that has the potential to grow if the customer pays the monthly minimum requirement or more on time each month. Rebuild your credit with an unsecured credit card by using the card responsibly. When your credit improves, you can apply for a larger credit limit or apply for credit cards with lower interest rates and fees.
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Instructions
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Instructions
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Obtain a copy of your credit report from all three credit reporting agencies; Equifax, TransUnion and Experian. Visit the Federal Trade Commission approved website at www.annualcreditreport.com to request one free copy of your credit report from these agencies. Review credit reports to make sure information such as credit history, current address and name are correct. Contact credit reporting agencies to correct any mistakes before applying for an unsecured line of credit.
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Compare unsecured lines of credit from at least three different credit card providers and banks. Compare maintenance and annual fees, interest rates, payment terms and credit line increase criteria. The Credit Card Accountability, Responsibility and Disclosure Act (CARD Act) of 2009 limits the amount of fees and other charges to no more than 25 percent of the total credit limit. Credit card providers are also required to list all charges and fees upfront so you can make an informed decision.
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Compare customer service ratings, automatic bill paying services and determine how often the credit card provider reports to credit reporting agencies. If rebuilding your credit, it is best to choose a provider that reports to each agency once a month. This helps increase your score and demonstrates that you pay your balance each month on time.
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Apply for an unsecured credit card by completing an application. Required information you may have to provide includes annual or monthly salary, whether you own or rent your home and other types of income you currently receive including child support and disability. Review the terms of the card before agreeing to accept the line of credit. The fees and charges listed in the terms will appear on your first statement.
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Tips & Warnings
Pay credit card balances off each month to qualify for higher credit limits and lower interest rates.
Failure to pay the minimum amount each month may result in suspension or termination of your line of credit, default notation on your credit report or a lawsuit by creditors or collection agencies.
References
Resources
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