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 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.
If your credit score is low you will still be able to qualify for a sub prime credit card. This means you will pay approximately 19% APR and an annual fee.
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.
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.
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 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 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.
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.
