A credit card can help you rebuild your credit score. This card will help your ratio of available credit to debt and you can build 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.
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 works like this; you deposit money into a bank account with the credit card issuer and they give you a credit card with the amount of your deposit as your credit limit. Your card will work just like an unsecured card; you will have monthly due dates and minimums to pay.
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 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.
The other alternative for a credit card is a shopping card. This card is only accepted through a designated catalog or through a website. These cards often only report to one credit bureau and have large fees.
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 you open a sub prime credit card for your credit score to get the most benefit. This card will help improve your score by creating a positive payment history and improving your ratio of debt to available 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.
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 works like this; you deposit money into a bank account with the credit card issuer and they give you a credit card with the amount of your deposit as your credit limit. Your card will work just like an unsecured card; you will have monthly due dates and minimums to pay.
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 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.
The other alternative for a credit card is a shopping card. This card is only accepted through a designated catalog or through a website. These cards often only report to one credit bureau and have large fees.
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 you open a sub prime credit card for your credit score to get the most benefit. This card will help improve your score by creating a positive payment history and improving your ratio of debt to available credit.
About the Author:
We suggest the Tribute Card an unsecured credit card or you can see a review of the Orchard Bank Card a secured card by visiting us.
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