Credit Card Applications For Poor Credit
Posted by admin on December 15th, 2008 at 12:00am
Question:
Would having credit card applications for poor credit approved improve my credit score?
I currently have a pretty poor credit score, due to my own stupidity as a kid, and this has sadly stuck with me.
On the other hand, I was told that there are a few companies out there that would approve credit card applications for poor credit, such as Vanquis or Capital One.
So a few days ago, i sent an application to Vanquis and have been qualified for a credit card (albeit for a small limit on the card), but I’m just glad I was approved, but what i would love to know, is by just being accepted, would this have increased my credit score? If so, by how many points?
I’ve talked this over with friends and the ideal way to keep my credit score increasing, and they’ve suggested, having the money to buy stuff and then charging the credit card and then paying it back immediately. According to the people I’ve talked to, this will cause my credit scoring to increase tenfold in only a matter of months.
Is anybody else able to help me as to the ideal way to keep improving my credit rating through the use of the credit card?
Answers:
I see quite a few incorrect responses as to how credit works.
First of all, your credit score has been decreased a little because of the hard inquiry put there via the credit card company. It will be placed on your credit report for 24 months. It is going to have less effect as time passes.
Too many denied credit card applications for poor credit can decrease your score dramatically.
Next the urban legend about paying back the balance in full each month is just that, it does not necessarily mean your credit score will go up any faster. Credit card companies will report your money owed at the point the statement was compiled and that you paid on schedule or not. The credit report is still going to reveal a balance owed. I am going to quote what FICO has to say regarding this: “The amount owed on all accounts. Even if you pay off your credit cards in full every month, your credit report may show a balance on those cards. The total balance on your last statement is generally the amount that will show in your credit report.”