It does not help trying to be all politically correct about this one: Bad credit is a bad thing – especially if you are trying to secure a credit card on the back of it. The most likely outcome is that you will smart for a while with the pain of rejection.

In countries such as the USA, there is hope for those with a bad credit history. There are two credit card issuers who are quite prepared to take on the risk of a poor credit history – albeit at an inflated interest rate. Those suffering with a bad credit profile also have the luxury of availing themselves of one of the many prepaid MasterCard or Visa credit cards.

Now for the bad news…The first piece of bad news is that in South Africa we do not have subprime credit card issuers. There are maybe one or two issuers (like Blue Bean) who might consider some of the applications that fall slightly short of the cut-off point. The second piece of bad news is that there has not been a local credit card issuer who has shown even the remotest of interest in the issuing of prepaid credit cards. And, this is not likely to change any time soon.

In effect, a bad credit history equals a 0.0001% chance of securing a credit card.

Having said this, all is not lost. So, if you really still want that credit card, here is a five-point plan that could help you to get closer to your goal.

Since the implementation of the new National Credit Act during the middle of last year, all consumers are entitled to receive a free copy of their credit report from Transunion and Experian every year. Make a point of obtaining yours sooner rather than later if you suspect that there may be one too many blotches on your credit record.

Over and above looking at how you are being rated in the different categories, you should be on the lookout for anomalies that may be adversely affecting your creditworthiness. When you spot these, request – in writing – that these be removed. Provide supporting documentation and offer a clear motivation. If there is a dispute, you have recourse to the credit ombudsman. Use it.

Make an appointment to see your bank manager and take your credit report along. Work through the credit report with him / her and ask where you need to improve your score to qualify for an entry level credit card.

Although making repairs inevitably takes longer than causing damage, the wounds do heal. Here are a few things that could help you fix your credit score:

• Pay at least the minimum amount on your existing accounts when these fall due.
• Pay off the debts where you were in default.
• Reduce the value of your debt.
• Do not apply for new lines of credit frequently
• Offer a written explanation (i.e. unemployment, divorce etc.) to the two credit bureaus for all the items that have adversely affected your credit report. This will be placed on file and disclosed whenever your credit report is drawn.

When your credit score edges above the minimum score as explained to you by your bank manager, you can submit an application for a credit card. Chances are fairly good that you will be approved this time round.

When you have achieved your goal of becoming a proud credit card holder, make sure that you diligently pay your credit card account all the time. Not only will your credit score be boosted, but you may also find yourself rewarded by better interest rates in the process. Best of all, you will have the peace of mind that comes with credit card: the ability to painlessly enjoy financing as and when the need may arise.