When bad credit scores are part of the equation, it can be very difficult to get approval on loans or credit cards. But while there may be great trouble in getting unsecured credit cards with bad credit, there are alternatives that should be considered that offer a greater chance of approval.The typical card approval process involves taking a careful look at the credit history of the applicant and then deciding whether to not to grant the credit card. But avoiding the negative influence of a bad credit score is important if approval is to be secured. This is where the search of alternative cards comes in.Thankfully, there are alternatives to unsecured credit cards available that are not only affordable but very attainable, even for those with terrible credit histories. In fact, with some, no credit checks are carried out making approval practically certain.What is Bad Credit?Bad credit relates to the credit history an individual has built up, with a calculated score used by lenders to decide on the risk factor involved in lending to that person. The lower the score, the higher risk, so someone seeking an unsecured credit card with bad credit is considered major risk.The score is calculated by the 3 major credit agencies – Experian, Equifax and TransUnion. These agencies track all the credit activity in a country, which means every time a loan repayment is late, missed or the loan is defaulted on, the agencies know it. As a standard part of the any card approval process, the issuer will want to know credit activities of the applicant in detail.Known as FICO scores, the credit ratings range from 300 to 800, with the higher score ensuring the best terms when applying for a loan, mortgage or unsecured credit card. Usually any score under 600 is considered a bad credit score, with most people scoring below it. A score of 300 would make it very difficult to get approval at all.Credit Card AlternativesThe chances of getting an unsecured credit card with bad credit is extremely low, though it does depend on how low the scores are. But the alternative cards on the market are designed to cater to the needs of exactly that niche of applicant. There are 3 principal options: prepaid, debit and secured cards.As the name suggests, secured cards are credit cards issued on the basis that an account is opened with funds sufficient to cover the cost of the card as collateral. This means that repayment is guaranteed, which practically ensures the card approval process ends happily.Debit and prepaid cards are not actually credit cards, since the former uses funds from a bank account and the later requires funds to be loaded directly into the card account. The good news is there are no credit checks, so approval is guaranteed, and the costs are much less than with unsecured credit cards.Advantages of the AlternativesThe alternatives listed above offer a lot of benefits to cardholders other than simply avoiding the disappointment when an application of an unsecured credit card with bad credit is rejected. The secured credit card, for example, offer a great opportunity to improve credit scores through regular repayments. As the scores improve, so too do the terms of future loans and card applications.Debit and prepaid cards are not credit based, so they have no direct effect over the credit score. However, they do offer a practical solution to money management issues. Even if these card approval processes are uncomplicated and approval is guaranteed, learning to use the cards responsibly is a key element in avoiding financial problems when unsecured credit cards are eventually secured again.
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ABOUT THE AUTHOR
Donna Hammond is the author of this article. For more information about Bad Credit Motorcycle Loans and Rv Loans for Poor Credit please visit her website at http://www.quickbadcreditloans.com/
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