Credit Cards To Help Rebuild Credit
You can use a credit card to help rebuild your credit score. This card will help you build a positive payment history and will improve your ratio of available credit to debt; both these factors are heavily weighed in your credit score.
When you have a damaged score you will be faced with a sub prime interest rate. This means you will have an interest rate around 19%.
You should still make efforts to remove derogatory items off your credit report. However it is rumored that once a derogatory item ages four years it will not impact your score as dramatically.
With your card you are going to have to pay an annual fee and around 19% APR. This is called a sub prime credit card because it is designed for individuals with a damaged credit history.
On your card you will be given a credit line of $300. Your other choice is to get a secured credit card.
With a secured card you will have to put an initial deposit down and how ever much your deposit is that will be your available credit. The benefit of a secured card is that they approve everyone.
With an unsecured card it will be instant approval and your payments and balance will be reported to all major credit bureaus. It is important to double check and make sure your credit card will report to all three credit bureaus.
A helpful tip to get the most positive credit built from your card is to keep your balance at 10% of your available credit. If your card has a credit limit of $300 it will help if you can keep your balance at around $30.
This shows the credit bureaus that you do have available credit; this is called your available credit to debt ratio. In addition it shows the bureaus that you do use your credit.
The last option for a card is a shopping card or a credit card that is only accepted at a specific location. We do not suggest these cards; they often come with large upfront payments and only report to one credit bureau.
A prepaid debit card is another option. We suggest this option to individuals in chexsystems because it will work just like a bank account.
In sum we suggest a sub prime unsecured credit card. This will give your credit score the most benefit because it will increase your ratio of available credit to debt and help you create a positive payment history.
When you have a damaged score you will be faced with a sub prime interest rate. This means you will have an interest rate around 19%.
You should still make efforts to remove derogatory items off your credit report. However it is rumored that once a derogatory item ages four years it will not impact your score as dramatically.
With your card you are going to have to pay an annual fee and around 19% APR. This is called a sub prime credit card because it is designed for individuals with a damaged credit history.
On your card you will be given a credit line of $300. Your other choice is to get a secured credit card.
With a secured card you will have to put an initial deposit down and how ever much your deposit is that will be your available credit. The benefit of a secured card is that they approve everyone.
With an unsecured card it will be instant approval and your payments and balance will be reported to all major credit bureaus. It is important to double check and make sure your credit card will report to all three credit bureaus.
A helpful tip to get the most positive credit built from your card is to keep your balance at 10% of your available credit. If your card has a credit limit of $300 it will help if you can keep your balance at around $30.
This shows the credit bureaus that you do have available credit; this is called your available credit to debt ratio. In addition it shows the bureaus that you do use your credit.
The last option for a card is a shopping card or a credit card that is only accepted at a specific location. We do not suggest these cards; they often come with large upfront payments and only report to one credit bureau.
A prepaid debit card is another option. We suggest this option to individuals in chexsystems because it will work just like a bank account.
In sum we suggest a sub prime unsecured credit card. This will give your credit score the most benefit because it will increase your ratio of available credit to debt and help you create a positive payment history.
About the Author:
We suggest the Tribute MasterCard an unsecured credit card or you can see a review of the Orchard Bank credit card a secured card by visiting us.
posted by Credit Counseling at
8:10 AM
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