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.
This is how you will build positive credit to your damaged score. Unfortunately because of your low score you will have to pay higher interest rates.
It is still important to remove bad credit items from your credit report. However it has been learned that after a bad credit item ages 4 years it will damage your score much less.
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.
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.
In addition your credit will get the most benefit if you can keep your monthly balance at 10% of your credit limit. For example if your credit limit is $300 then you want your monthly balance to be $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 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.
This is how you will build positive credit to your damaged score. Unfortunately because of your low score you will have to pay higher interest rates.
It is still important to remove bad credit items from your credit report. However it has been learned that after a bad credit item ages 4 years it will damage your score much less.
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.
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.
In addition your credit will get the most benefit if you can keep your monthly balance at 10% of your credit limit. For example if your credit limit is $300 then you want your monthly balance to be $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 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.
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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.
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