The Frugal Creditnista

FB Q&A Friday: HELP! Trying to Rebuild Credit & Keep Getting Denied

Facebook Q & A Friday!!!

Q: I was told I need to rebuild my credit and credit cards are ‘the way' to do it initially. I've applied for 3 cards; got 3 hard inquiries and got denied. How can I build credit if no one will approve me?  This is super frustrating!

A: Hi, sorry you're frustrated! I have 2 pieces of advice.
Before applying for any form of credit read the terms and conditions/disclosures. If you don't meet them don't apply.
Another tip is to Google the average credit score of that particular card so that you can see if you fit in that category. (Here's a scope I did on credit card terms: https://katch.me/Frg…/v/09ca4631-34f0-3377-85e4-05b654d07fd1)

I would take a look at the denial letters as well, you'll see reason codes and explanations of why you were denied. It typically lists about 4 reasons, the top 2 are the main reasons you were denied credit. Read them and work on that.

When rebuilding you should focus on ‘rebuilding' type cards. Namely secured cards; ‘bad credit' cards and merchant accounts.

Secured cards come in 2 forms: credit check and no credit check. Credit check cards come from Cap One, your local bank or credit union. For a list of ‘No Credit Check' secured cards click here:  http://www.creditcardbroker.com/member-detail/?tid=5584

Bad credit cards interest rates suck, but they don't require a deposit. My go to ‘bad credit' card is Credit One; I only use them if my clients don't have the extra $$$ to get a secured card and they don't qualify for Cap One using their ‘prequalifier' feature.

I have used First Premier but sparingly those fees and interest rates (36%) is THE WORST; but I have been successful in getting my clients out of that card in 3-4mths and on to better forms of credit. If you need help with this let me know.

Merchant cards are retail cards, gas cards and merchant accounts like Fingerhut Fresh Start program. I have 2 alternatives listed on my site that I use often: http://mnhcreditsolutions.com/credit-cards/

You can also focus on other forms of credit in the mean time:

1. Credit Builder Loan via a Credit Union (use this ALL the time)

2. Add rent to your reports Rent tracker or Rental Kharma ( reports to Transunion Only: www.rentalkharma.com/mnh-credit-solutions)

3. Becoming an Authorized User on a friend/family member's credit card. You don't have to get a card, but you will get their good credit. Make sure the account is over 5yrs or at the very least 3, no negatives for the entire life of the account, low balances, decent credit limit.

Hope this helps!
If you have any further Q's let me know!

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