Credit Cards To 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%.
It is very important to remove negative items on your credit, while improving your score. You should know that once a negative item ages four years then it has much less impact on your score.
On your card you will have to pay an annual fee and a high interest rate. Unfortunately this is an unavoidable cost, however with proper use you can ensure this is the last time you will have to pay high interest rates.
Your card will have a credit limit around $300. The other alternative is to get a secured credit card.
A secured card you will have to put a deposit down and the amount of your deposit is the credit line on your card. This card will report to the credit bureaus however it will not give you the same benefit as an unsecured card.
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 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.
You also can apply for a prepaid credit card however these cards typically do not report to a credit agency. However they do work like a bank account and if you are in chexsystems this is a good choice.
In sum we suggest the unsecured Tribute MasterCard. This card will help improve your score by creating a positive payment history and improving your ratio of debt to available credit.
