Rebuild Your Credit With Credit Cards
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.
You credit limit will be approximately $300. The other option is to get a secured credit card, however your credit score will not receive the same benefit.
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.
Both these types of cards offer instant approval. Before you apply for any card double check and make sure that they report to all three credit bureaus.
Another tip to help you get the most benefit to your credit is to keep your balance at roughly 10% of your credit limit. For example a credit limit of $300 you will want to keep the monthly balance at $30.
This will help because it shows; you use your credit, and use it responsibly. In addition having available credit will increase your available credit to debt ratio, this shows the bureaus that you are not in over your head.
There is one other option that we strongly discourage and that is a shopping or catalog card. This is a credit card that is only able to make purchases through a catalog or a website online. We discourage this option because there is often a large down payment required and the card typically only reports to one credit bureau.
A prepaid card is another option. This is a good choice if you are unable to open a checking account because this card will work just like a bank account.
In sum we suggest a sub prime unsecured credit card to help rebuild your credit score. It will create a positive payment history and build positive credit.
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.
You credit limit will be approximately $300. The other option is to get a secured credit card, however your credit score will not receive the same benefit.
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.
Both these types of cards offer instant approval. Before you apply for any card double check and make sure that they report to all three credit bureaus.
Another tip to help you get the most benefit to your credit is to keep your balance at roughly 10% of your credit limit. For example a credit limit of $300 you will want to keep the monthly balance at $30.
This will help because it shows; you use your credit, and use it responsibly. In addition having available credit will increase your available credit to debt ratio, this shows the bureaus that you are not in over your head.
There is one other option that we strongly discourage and that is a shopping or catalog card. This is a credit card that is only able to make purchases through a catalog or a website online. We discourage this option because there is often a large down payment required and the card typically only reports to one credit bureau.
A prepaid card is another option. This is a good choice if you are unable to open a checking account because this card will work just like a bank account.
In sum we suggest a sub prime unsecured credit card to help rebuild your credit score. It will create a positive payment history and build positive credit.
About the Author:
We suggest the Tribute Credit Card an unsecured credit card or you can see a review of the Orchard Bank MasterCard a secured card by visiting us.
posted by Debt Consolidation Loan at
8:24 AM
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