Getting Credit Cards - What Is A Bad Rating?

Your bad credit rating may affect your ability to obtain a credit card at a good interest rate, and it may prevent you from getting a card at all. The bank or credit card company will look at a limited profile of your financial health to determine your limits and interest rate. The factors they will likely use are:

• Credit score: You should have a score of 700 or higher to get the best rates. 650 is an acceptable score, but lower scores will have difficulty opening a card.
• How much credit you have: You should have other credit lines or credit cards open to show you are capable of obtaining and managing credit.
• How much credit you are using: You should maintain less than 10% of your total available credit as debt.
• What type of credit do you have: You should aim for a mix of installment loans, such as auto loans or mortgages, and revolving loans, such as credit cards.
• How long have you had credit: Having years of credit reporting is a good sign. If this is your first entree into the credit markets, your rates will increase.

These are just some of the factors that will influence your new credit line. If you have bad credit or no credit, try going to the bank that holds your checking accounts first. They should be able to verify your income and extend you at least a small line of credit to start getting your score established.