If you have very poor credit or no credit history, a credit card with no credit checks is the perfect solution. Approval is 100% guaranteed because the issuer is not assessing how you have managed your credit obligations in the past. Finance for bad credit is available from specialist lenders on a secured, unsecured or prepaid basis.
Why are bad credit rating credit cards necessary?
If you have failed to comply with your credit agreements during the last seven years, this will have been reported to credit reference agencies. The use of a credit scoring system means that your application is likely to be declined by the issuer. No credit check credit cards offer you guaranteed approval, regardless of any missed or late payments.
You can get a MasterCard or VISA credit card, albeit on revised lending terms. Many people use credit-building credit cards as part of an overall strategy to improve their credit rating. Provided that you make the repayments punctually, you can qualify for a regular card in just 12 months. Don't borrow more than you can afford and always make the repayments within the specified grace period.
Types of no credit check credit cards
There are three main types of no credit history credit card where credit approval is guaranteed. Your new card could be secured, unsecured or prepaid. Adverse credit won't affect the outcome of your application, but the type of VISA or MasterCard card that you apply for will affect the rate of interest that you pay. The cost of borrowing is based upon an assessment of the risk.
Before you decide to apply, check your free credit report and score to see if you are eligible for a mainstream card. Unsecured no credit check credit cards work on a similar basis to the sort of cards that you used to own, but they have a much lower credit limit. They are categorised by a spending limit of just $250 and very high charges. Prepaid cards
This variety of guaranteed credit card involves loading your own cash via bank transfer. You will pay a small commission, but there are cards that don't charge an annual management fee. Once the money arrives, it works in the same way as a standard card. Unless it displays the credit builder symbol, issuers won't report to credit reference agencies. Secured cards
The secured credit card rate is more favorable than it is on an unsecured card because all of the risk is covered by the provision of a cash deposit. You will typically deposit a minimum of $200 in a holding account and this will be used to secure the debt. Your credit limit will match the amount of cash that you have deposited with the issuer.