Last Updated on November 14, 2024 by Daniele Lima
Obtaining credit is an essential step in managing your personal finances, whether to make purchases in installments, purchase a larger asset, or even for financial emergencies. However, many people encounter difficulties in this process, especially those who have a negative name. In this article, we will cover how to obtain credit, even with document ID restrictions, the ideal profile for each type of credit card, and how income can influence approval.
Table of Contents
1. How to Get Credit Even with a Negative Credit History
Having a negative name can make it difficult to access credit, but it doesn’t mean you don’t have options. Some types of credit, such as “secured” or guaranteed credit cards, offer a good alternative for those with a bad name.
Secured Credit Cards: These cards require a security deposit, which serves as a guarantee for the bank or financial institution in case you don’t pay the bill. The deposit amount is generally equal to the credit limit offered, which reduces the risk for the issuer and increases your chances of approval. In the case of cards such as the Discover it® Secured Credit Card or the Citi® Secured Mastercard®, the institution may approve your request even if the name is negative, as long as you have the money necessary for the security deposit.
Cards for People with Bad Credit: Some institutions, such as the Capital One Platinum Credit Card and the Chase Freedom® Student Credit Card, offer cards for people with a low or no credit history, making them a good option for those just starting out. build or rebuild credit.
Furthermore, some banks and fintechs (such as Nubank in Brazil) have a more flexible approval process, considering your recent financial behavior, such as bank transactions and paying bills on time, rather than analyzing your complete credit history.
2. Ideal Credit Card Profiles for Different Financial Situations
Each credit card has an ideal customer profile. Here are some examples:
Cards for Beginners/Negatives:
- Profile: People with little or no credit history, or with a negative name.
- Examples: Discover it® Secured Credit Card, Citi® Secured Mastercard®, Nubank (Brasil).
- Features: These cards are easier to obtain because they require fewer credit requirements, but they require the applicant to have a minimum income and a commitment to pay bills on time.
Cards for Students or Young Adults:
- Profile: College students or young adults just starting their financial journey.
- Example: Chase Freedom® Student Credit Card.
- Features: These cards are a great way to start building credit while taking advantage of cashback or shopping rewards benefits.
Cards for People with Regular Credit:
- Profile: People with a good credit history or who already have a card, but want to expand their credit options.
- Example: Capital One Platinum Credit Card.
- Features: These cards are ideal for those who already have some credit history, but do not yet have a high score. They offer good credit conditions and, over time, increase the limit automatically.
3. The Impact of Income on Credit Approval
Individual income is one of the main criteria for approval of your credit. It helps financial institutions determine their ability to pay installments and commitments made to the bank. Secured credit cards, can be a good option for those on a lower income, but it’s important to remember that the security deposit required will be based on your disposable income.
Minimum Income: Most credit cards require a minimum income for approval. For cards like the Chase Freedom® Student Credit Card, for example, the minimum income is not as high and may be suitable for students or young adults. For cards with no annual fee or with cashback rewards, the minimum income required may be a little higher.
The Importance of Being Realistic: If you can’t meet the minimum income requirement, you may need to start with an entry credit card or a secured card. Keeping your finances in order and proving that you can manage small limits can help increase your chances of approval in the future.
| Aspect | Description | Learn More |
|---|---|---|
| Income Requirement for Credit Approval | Income is a primary criterion for credit approval, as it helps lenders gauge your repayment capacity. Higher income often allows for better approval odds and higher credit limits. | Investopedia: How Income Impacts Creditworthiness |
| Secured Credit Cards for Low Income | Secured credit cards are a viable option for those with lower incomes, as they require a deposit instead of strict income requirements. The deposit is typically equal to the credit limit. | Bankrate: What Is a Secured Credit Card? |
| Minimum Income Requirements for Student Cards | Student credit cards, such as the Discover it® Student Cash Back, typically have lower income requirements, making them accessible to students or young adults building credit. | Discover: Student Credit Card Options |
| Managing Finances to Qualify for Credit | Starting with an entry-level or secured card and managing finances responsibly can improve your creditworthiness over time, leading to better approval odds for standard credit cards. | Money Under 30: How to Build Credit Fast |
4. Rebuilding Credit: Strategies for Those with Negative Credit History
If you have been negative (or have a bad name), recovering your credit can be a lengthy process, but possible. The main tip is to start with small steps:
- Regularize your situation: Pay your debts and remove your name from the default records (SPC, Serasa, etc.).
- Ask for secured credit cards: They’re a good way to show issuers that you can maintain responsible financial control, even when your credit history isn’t perfect.
- Keep your limit low and always pay on time: Using your card well and paying your bills on time will help increase your credit score.
5. Contacting Financial Institutions to Obtain Credit: Resources and Guidance
If you want to apply for a credit card or obtain more information about how to obtain credit, many financial institutions offer direct contact channels through their websites or applications. Here are some useful links to get you started:
- Chase Freedom® Student Credit Card (USA): https://www.chase.com
- Discover it® Secured Credit Card (USA): https://www.discover.com
- Capital One Platinum Credit Card (USA): https://www.capitalone.com
- Citi® Secured Mastercard® (USA): https://www.citi.com
Through these links, you can access information about the requirements for each card and how to apply directly. If you need help understanding the conditions or choosing the best card for your profile, many sites offer customer service via chat, email, or phone.
Conclusion
Getting credit in 2024 may seem like a challenge, especially if you have a bad name or little experience with credit cards. However, with secured card options and special programs for beginners, the path to building a good credit history is more accessible than ever. By following the tips in this article, choosing the card that suits your profile, and keeping your income and payments up to date, you will be able to improve your credit and achieve your financial goals.
FAQ
What options do I have for getting credit if I have a negative credit history?
Secured credit cards and cards specifically designed for people with poor or limited credit can be good options. These cards may require a security deposit but can help you start rebuilding your credit.
How does my income affect my chances of getting approved for credit?
Income is a crucial factor in credit approval. Financial institutions use it to evaluate your ability to make timely payments. Higher incomes generally increase your chances of approval, but there are options for those with lower incomes as well.
How can I improve my credit score if I have a negative credit history?
The key steps are to pay off debts, remove negative items from your credit report, and use a secured credit card responsibly by keeping your credit utilization low and making payments on time.
What is the minimum income required for different types of credit cards?
Minimum income requirements can vary, but generally, entry-level and secured cards have lower minimums compared to rewards-based or premium credit cards. It’s important to research the specific requirements for the card you’re interested in.
How can I contact financial institutions to apply for credit or get more information?
Most financial institutions provide direct contact channels through their websites, mobile apps, or customer service phone numbers. Many also offer online application processes for credit cards.