As a Minnesota consumer with bad credit, you may assume that getting approved for a secured credit card is a sure thing. It isn’t.

As a Minnesota consumer with no credit or bad credit, you may assume that getting approved for a secured credit card is a sure thing. Why wouldn’t it be? After all, you have to put up a deposit to serve as collateral. So there’s little risk to the credit card issuer. How could you possibly be turned down? It turns out that most secured credit card providers vet applicants quite thoroughly. They do this because they don’t want their cardholders to fail. This means that most creditors that offer secured card programs look carefully at factors like income, obligations, assets, and, yes, even credit scores. So, if you are a Minnesota resident looking for a secured card to build or rebuild credit, you’ll want to be sure that you’re fully prepared for the application process.

How Minnesotans with Bad Credit or No Credit can Improve their Chances at Getting Approved for a Secured Credit Card

A lot of Minnesotans with low credit scores or no credit history apply for secured credit cards as a “last resort” option, but less than half of them are typically approved. If these odds weren’t what you were expecting, you should find out what you’re up against before filling out any applications. Knowing the requirements ahead of time will give you a better chance at secured credit card approval. So here are some important questions to keep in mind while looking over your options.

How is your debt to income ratio?

Your debt to income (DTI) ratio represents how much of your monthly income goes toward recurring bills. For example, if you bring in about $2,000 a month and pay $1,100 a month for rent, your car payment, and other obligations, your DTI ratio is 55%. This number is too high for some credit card issuers. In fact, it isn’t unheard of for some creditors to deny cards to applicants whose DTI ratios exceed 40%-50%.

Before applying for a secured credit card, find out about the DTI ratio requirements. If you’re close to hitting the mark, you may want to look at your monthly bills. Do you have a nearly paid off personal loan? Paying off the balance and getting that bill off your plate should help your DTI ratio. Otherwise, if you know there’s no way you’ll meet a certain secured credit card’s DTI requirements, don’t apply for that card. Instead, look for an option with looser stipulations.

How much are you willing to put up as collateral?

Many consumers think that a secured credit card deposit is always equal to the card’s spending limit. This isn’t always true. For those with only slightly dinged credit, certain issuers offer secured cards with smaller deposit requirements. For instance, Capital One has a secured Mastercard with a $200 credit limit and a deposit requirement of $49 or $99, depending on your credit score.

Of course, if you are willing to put a substantial amount of money up as a deposit, you will increase your chances at approval. Bigger deposits mean less risk for the creditor. So if you have truly bad credit or other factors working against you, prepare to offer up a substantial sum.

Is your credit an issue?

Again, some secured credit card issuers check credit scores and some don’t. Typically, those who don’t look at credit scores require larger deposits. So, if you want a secured credit card right now and don’t have time to improve your credit score, you should go with a more expensive card.

If, however, you do have time to boost your credit score, first make sure that you are up to date with all of your bills. Late payments on any obligation can bring your score down, which is the opposite of what you’re trying to do. Next, check your credit reports for errors. About 80% of consumer credit reports contain errors of some time, and these mistakes can bring down your credit score.

Here’s some good news for Minnesota residents. If you find inaccuracies on your credit reports, you can get a FREE credit repair lawyer to remove them. Yes, you can do this yourself, but why would you when you can get a professional to do the work at no cost to you?

The Free and Legal way to Get Better Credit

Don’t let errors on your credit reports bring your credit score down. At Minnesota Credit Repair Lawyers, we’ve been cleaning up credit reports for consumers since 2008 for free. How do we do it? The law allows us to collect our fees and costs from the defendants in any successful action.  This is why our clients pay nothing for the work we do.

Let’s start the conversation about what we can do for your credit. Set up your free consultation today by calling Attorney Gary Nitzkin at (888)293-2882 or sending him a message through our contact page.