subject: The Credit Card Ladder And How To Get On It [print this page] It increasingly seems that consumer credit is being reduced to a game.
This feeling is driven not only by the misleadingly solid and jovial sounding terms involved (take, 'credit score') but by glossy adverts from credit scoring companies peddling their wares and articles (which I'm guilty of having written myself) with titles like 'get a great credit score'.
It seems that having a shining credit score is increasingly becoming a point of pride in itself rather than a means to an end, which is far more accurate.
The financial game players have got one thing right, though, consumers do have to think about how they're moving forward in the race to credit than they ever did before.
The millions of people in the UK who applied for a Vanquis credit card last year is testament to the fact that bad credit rating credit cards are becoming the first step on that ladder and a way out of that 'get a good credit score to get a credit card' paradox.
However, the high percentage of people rejected from such cards is equally a testament to the fact that many are missing the very simple things they should be doing before making an application.
Basically, there are three things to bear in mind if you or someone you know is in this situation.
The first is that this is a ladder but not everyone starts at the bottom.
Even if you've never borrowed before things like your bank accounts, your savings, your annual salary, how long you've lived in your house and whether or not you're on the electoral roll will affect your current credit worthiness.
For this reason cards such as the capital one classic credit card can be good for first-time borrowers in quite a good financial position.
Second, have a clear goal in mind.
The Credit Expert adverts with a man with a perfect credit score living in a diamond house are meant to be a joke but it's not clear that everybody gets it: a good credit score is useful only for getting more credit.
Ask yourself - what do I want to achieve?
You won't be able to borrow at a low rate straight away but you might want to do so in the future or make money from super balance transfer cards or earn rewards on your spending.
The products you want to get in the future should affect what you do to improve your credit score at the moment.
If you don't have an answer than you must be playing the game - might I suggest a nice round of Guess Who instead?
Perform a credit card comparison to check which types of cards are available and familiarise yourself with how they work.
Third, like a certain board game, the credit card ladder has its share of snakes.
Make sure you know what you're getting into before you begin and that you know how your card works - missed payments will show up on most searches from the banks.
