By Adam Jusko, ProudMoney.com, adam@proudmoney.com

If you have a bad credit history, you might already know that being approved for new credit can be tough, especially if you want an unsecured credit card that doesn’t require any type of collateral such as a security deposit. In this article, I am going to walk you through the steps we suggest for people with bad credit who are in this situation.

First, A Pitch for Secured Credit Cards

OK, I know we’re talking about unsecured credit cards, but if you have bad credit, you really should consider a secured credit card to help you build your credit score. Yes, you have to put a security deposit down in order to get a secured credit card. But that security deposit is refundable, and secured credit cards often have fewer fees than the unsecured cards that poor credit history customers can generally get approved for. In addition, many secured cards are issued by major banks that you probably hope to build a relationship with, and very often these banks will “upgrade” you to an unsecured card after you’ve proven yourself through on-time payments for some period of time, usually within a year. So, check out our list of best secured credit cards and consider applying for one of those.

Not Sold On Secured? OK, Let’s See Just How Bad Your Credit Really Is.

If you’re determined to get an unsecured credit card and avoid secured credit cards, we understand. Having to come up with a security deposit just to get a credit card may be a hardship, or maybe you simply don’t want to go that route. What to do?

Well, first, it’s best to get an idea of just how bad your credit score is. An online tool that we recommend to check your credit score is the Discover Credit Scorecard, which gives you a free FICO credit score (FICO is the most commonly-used credit score used by card lenders). The Discover Credit Scorecard is free, and you don’t have to be a Discover cardholder to use it, so there are no strings attached.

When you get your score, you might not know what to make of it. The FICO score is on a scale of 300-850. If your score is under 650, many lenders will consider you to have bad credit while some will be a bit more sympathetic and consider you to have “fair credit.” If your score is under 600, however, almost any lender is going to consider you a bad credit customer.

Credit Score Not Terrible? Start with the Capital One Prequalification Tool.

If your score is below 650, there is a good online tool you can use to see how major credit card lenders view you. It is the Capital One Prequalification Tool, which asks you to fill out a form and then gives you a list of Capital One credit cards you probably would qualify for. If you fill out this form and Capital One says you don’t qualify for any of their credit cards, it’s a good bet that you won’t qualify for any unsecured credit card from a major credit card bank. We say this because Capital One is really the only major credit card lender that tailors certain products to people with less than perfect credit. So, if they won’t take you, probably no one else will, either, or at least not the big banks like Citi, Bank of America, American Express, Chase, Discover, etc. Time to move on to the next option.

Consider Store Credit Cards

Many credit cards from retail stores or gas station chains are more forgiving when it comes to customers with credit problems. In other words, you might be approved even if bigger banks have turned you down. Ideally you’d like a Visa, Mastercard, American Express or Discover card from one of these stores, so you might want to pursue cards like the Walmart Mastercard, Gap Visa, BP Visa, etc. Even if these cards reject you for the Mastercard or Visa, they might approve for a downgraded store card that can only be used at that chain. You could also look into other store-only cards known to work with bad credit customers, such as Fingerhut. These store cards or gas cards have limited acceptance, but they can be a way to help you build your credit back up to a place where you’ll qualify for better cards. It could take some time, though.

Still Can’t Get Approved? One Last Option…

If you can’t get approved for any of the unsecured cards above, you’ll probably need to move down the scale to a smaller credit card company that specializes in working with bad credit customers. This usually means you’ll need to pay annual fees and have high interest rates if you want to get an unsecured card (though not always).

In the first tier of these cards, you may get solicitations in the mail from Merrick Bank or Ollo. Depending on your credit score, these companies can offer you fairly decent credit terms or not so great at all. But both of these companies are probably preferable to….

The second tier, which includes cards like Credit One, Indigo, Continental Finance, Milestone, Blaze, etc. These cards usually have very small credit lines, hefty annual fees, and high interest rates. They can help you build credit, but you have to be perfect in your repayment history and it could still take a long time because of the fact that you have so little credit to begin with. (It’s generally easier to build credit if you have more available credit open, even though you shouldn’t be using most of that available credit. Try to stay under 10% of your complete credit line if you want to build credit faster.)

Finally, beware of certain companies whose only goal seems to be to take advantage of your poor credit history. The biggest culprit, in our opinion? First Premier, which offers credit cards with the highest fees and highest interest rate of any cards we’ve seen on the market. Try not to be so desperate for credit that you take an offer from First Premier.

Again, Consider a Secured Credit Card

If your credit score is really bad and you only qualify for terrible unsecured credit cards, we’d again encourage you to consider a secured card that could help you build credit while initiating a relationship with a major bank that may upgrade you to a much more desirable unsecured card in the future.