Never, Ever Commit These Mistakes when Getting Nonprime Credit Cards

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It is astonishing how one tiny, shiny piece of plastic can give us the power to purchase almost everything we want. One quick swipe is all it takes. That’s the potential credit cards provide.

Imagine the many possibilities!

For many Americans, credit cards extend their purchasing power. More than being able to buy goods and services, it can also help build an individual’s credit history. However, it can be credit-damaging if misused.

An American has 2.6 credit cards on average. This data includes the 29 percent who do not have a single one. 33 percent own 1 to two cards. Those having as many as 7 or more take up about 7 percent.

For individuals who have less than stellar credit records, a non-prime credit card can be of great use. It can help repair bad credit. It can also be a way to pay other debts that if left unpaid, will be more damaging to a person’s financial records.

If you think that getting one may help you better your circumstances, go for it! But before you do, make sure you avoid these common mistakes when getting nonprime credit cards

Not Reviewing Your Credit Report

Whether you are applying for a credit card, a mortgage loan or car financing, you should never miss out on this step. Always review your credit report on a regular basis. By doing so, you are doing yourself a big favor.

An error can affect your credit score, which in turn affects how lenders will rate your risk level. If you will not be mindful of the recording mistakes, it won’t be corrected. You will work your hardest trying everything you can to improve your credit when all you had to do after all was to get rid of the errors.

Most people only take a look at their credit report once a year. When they do, they are all too focused on the credit score alone. They fail to realize that errors can be very crucial.

Sweeping out errors on your credit report will improve your credit rating. A better credit rating will help you get approved for non-prime credit cards.

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Canceling Old Accounts

You have a bunch of credit cards you haven’t used for years. The best way to deal with it is to have all canceled altogether. WRONG!

People who close or cancel their credit card accounts find it more difficult getting approved for a loan. Why? Because it affects your credit score.

The length of a person’s credit history accounts for 15 percent of your credit rating. That being said, it does more bad than good when you cancel aged accounts.

It is true that non-prime credit cards are designed for consumers having a credit score of 650 and below. However, that does not mean that every person who applies for it gets one.

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Apply for One Too Many

It is good to shop for credit card providers or loan lenders. However, overdoing it will also have a negative effect on your credit score.

How do you minimize, if not eliminate, the damage? Limit your inquiries to a brief number per month. Most credit card scoring models may impose penalties on individuals who have a high volume of credit card or loan applications. Nevertheless, these bureaus do not neglect the fact that you have to shop around to get the best rates.

By curbing the number of inquiries, they will view it as a healthy comparison shopping.

 

Aside from keeping these mistakes in mind and avoiding them, make sure you also do your research. Gathering information for lenders and other reliable sources will help you avoid pitfalls when getting nonprime credit cards. This will also aid you in comparing rates and terms, as well as reward programs.

 

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