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.
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 of these cards offer online approval. However before you apply for any card double check and make sure that card does report monthly to all three 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 will show the bureaus that you use your credit, and you use it responsibly. In addition having this new line of credit will improve your ratio of available credit to debt. This is a very important factor when your score is calculated. It is the bureaus method of checking to see if you are 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.
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 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.
On your card you will be given a credit line of $300. Your other choice 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 of these cards offer online approval. However before you apply for any card double check and make sure that card does report monthly to all three 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 will show the bureaus that you use your credit, and you use it responsibly. In addition having this new line of credit will improve your ratio of available credit to debt. This is a very important factor when your score is calculated. It is the bureaus method of checking to see if you are 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.
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 a sub prime unsecured credit card to help rebuild your credit score. It will create a positive payment history and build positive credit.
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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.
