If you have bad credit, it is hard to get accepted for a credit card or even a bank account. This situation usually only occurs if you have been missing payments for a long time on your credit products or stayed over your credit limit or arranged overdraft. In this case lenders do have the right to freeze or close your accounts, and as it is in your terms and conditions, there is normally nothing you can do about it.
The problem with not having any credit products or bank account is that you will be unable to rebuild your credit rating, and will not get out of the bad credit situation in a reasonable time. So in a way this is a catch -22. Although many banks and credit companies have recently realized that more and more people will need help getting out of bad debt gradually, and did come up with a very good solution.
Even if you are bankrupt or have been managing your credit badly, have an awfully low credit score, you can apply for a second chance account. This is usually a bad credit current account that requires no credit check, therefore you are guaranteed to get accepted for it. Having a bad credit bank account is very useful as it will help you manage your finances much easier, set up direct debits and get your wages paid into it. Also you will have less chances to build up bad credit as you are less likely to miss any payments.
If you have been refused a bank account or overdraft, you can still apply for a bad credit current account without having to go through credit checks, and these products will help you rebuild your credit rating step by step. You have to know that every default or bankruptcy will still remain on your credit file for 6 years, but you have to plan for the future, once you got burnt by bad credit, you would like to stay away from it for good.
So what do you have to do to fix your bad credit rating?
First of all you do have to stay away from credit for a while. Many people get into trouble with credit companies because they either cannot manage their finances effectively or just simply over-commit themselves. In the current financial downturn it is very important that you plan your finances ahead and also that you budget carefully. You can have a second chance with a bad credit current account and get your finances back into shape in a few months, if you follow this advice. Once you have proved the bank that yo are able to manage credit, you have to start gradually using and repaying your overdraft to better your credit score.
Once you have done the above and opened a credit repair bank account, you will see that there is a way out of bad credit, possibly in a year’s time you will forget that you ever had financial difficulties.