Before you accept the judgment of any credit bureau that's marked you a credit risk, go to your records first and make sure an error did not occur. Many people have the same first and last name, and human error can be the reason things go wrong. In other words, there might be a chance that that your bad rating is a case of mistaken identity. Since you've established a line of credit in the past, there are three main credit-reporting agencies you can check in with:

• Experian
• TransUnion
• Equifax

They will have your records, which may include every place you've lived or worked and everyone to whom you made payments. If you've ever filed bankruptcy, they'll keep that in your records for 10 years. They will give your record a risk score that ranges from 0-1000. If your score falls below 600 or so, you're starting to flirt with the risk category.

Another reason you might have a negative credit rating is that you've applied for credit too many times. Submitting numerous credit card requests at one time is a red flag for credit bureaus. It'll alarm the credit card vendors, who'll think you're trying to cover an ever-increasing mass of debts.

Once you've verified your negative credit bureau report, consider it a temporary rating that makes it difficult to obtain a higher-end card. Do not despair! There's an alternative available to you. But first, you need to understand why you got into this position

You may have…

• Missed one or more monthly payments
• Incurred sizable late charge fees
• A prior history of late payment

When this occurs you have a ‘bad' or ‘marginal' credit file. That's like getting a D in home economics. But as with most things in life, this can be turned around. There are several things you won't be able to get if you're in this position right now. They are called favorable terms and conditions.

These include:

• Low annual percentage rates
• No annual fees
• Rewards

In order to re-establish or improve your credit rating, you'll need to take on a card with less favorable terms. You'll be back in business eventually, as long as you mend your ways, because these companies all like issuing cards to folks who make their payments on time and don't exceed their credit limit. They want to see that no more than 40% of your income is used to reduce your debts, including your rent or mortgage payment.

You will need to accept a credit card with less favorable conditions. These will include:

• High annual percentage rate
• An annual fee
• No rewards
• Other features and benefits

Standard Card – this is the term for a basic MasterCard

Classic Card – this is the term for a VISA brand card

If you can't get one of those, you may still be able to get a secured card. This might require your making a cash deposit to the financial institution offering the card to secure your line of credit. The amount they ask for can vary and could be as high as the credit line you're requesting. To top it off, they may charge you an application fee. If you don't make your payment, they'll take it right out of your deposit. We know that's not ideal, but it's a way to re-establish good credit – which is ultimately your goal.

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