Unsecured Credit Cards for Fair Credit

When you say fair credit, it means neither very good not very bad credit score. A fair credit score in the past was that of around 700, but that was before recession. Today, banks and financial institutions have made the approval process for a credit card more stringent. There are several factors which banks take into consideration while going through your application. Banks have their own internal credit scoring model and they take a look at that besides going through your credit ratings. Say a person has a credit score of 695 now, but, 5 years back he has filed for bankruptcy. The criteria that banks would apply for this person is different compared to another person who has very little to show in terms of credit history and has a similar score. The following paragraphs would help you get an idea of what you can expect while you are applying for unsecured credit cards for fair credit.

Unsecured Credit Cards for People with Fair Credit

It's not that you won't be approved for a loan with a fair credit, but the rates of interest would be higher. So it's always better to improve your credit report to such an extent that you would be approved with a lower rate of interest, and what better than an unsecured credit card. No doubt, you will pay a higher rate of interest, but it's worth paying now and being approved for a higher amount of loan at a later date with lesser rate.

Of course, there are alternatives like getting a secured credit card, but for that, you will need to pay a security deposit amount initially, which you may not want to pay. So, unsecured credit cards would help you in your endeavor of getting into the good books of rating agencies.

While searching for an unsecured credit cards to rebuild credit, you may not be able to find a lender who is willing to approve you without an annual fee. There may be other fees as well, so you need to check out for that. One time application fee are charged by several financial institutions which can go to a few hundred dollars. In addition to that there may be a one time processing fee, so as to forward your application. On top of that there may also be a monthly processing fee which may range between US $5 to 15 or even more.

So you will have to take all these things into consideration and add all the charges just to be approved for the fair credit cards. You have no choice, in this case, and you have to pay all these charges. Your aim should be to rebuild your credit and pay your bills on time. Once you have been regular in your payments for a sufficiently long time, you can get a card with no annual fee.

While searching for unsecured credit cards, you need to search for the best deal available. Ask for quotations from as many credit card companies as possible so that you have a list of all the offers available, and then choose the one which suits you. Moreover, check the past record of the issuing company, what people have to say about the service of that particular company. Check whether your payments are reported to all the three credit bureaus, because your aim is to rebuild your credit. And if the bank does not report to all three of them, then there is no use. In future you don't want higher fees to be associated with your card, so it's important that the agencies come to know of your payment history.