Rebuilding Credit Cards
When you are trying to get back on your feet after a life event that has left you with a low credit score, it can be hard to know where to start. What kind of credit card can you qualify for if your credit history is less than ideal? How to fix your credit if you have bankruptcy in the past? And how can you bring your credit score up again? The cards on this page can help. Made especially for people who are rebuilding credit, they not only allow you to make purchases by credit card, they can help you repair your credit at the same time.
Select the cards you like and compare them
You may ask how to rebuild credit when your history is bad and issuers are not eager to see you as an applicant. The answer is very simple: apply for the right card. There are credit cards that work well for rebuilding credit - secured cards, shopping credit and prepaid cards. Here is the difference:
First two types of cards - secured cards and shopping cards - typically report to major credit bureaus so your credit history will reflect your credit performance. In a due time you will be able to repair bad credit, which will enable you to apply for additional credit cards. The last one does not send reports, but can be considered as a base for responsible credit use in the future.
Things you should know to rebuild credit
Credit scores fall on a scale generally from 300 to 850. If your credit score has fallen below 640 or so, you are no longer considered to have good or average credit. You may have trouble qualifying for many unsecured credit cards. Your credit score won't improve overnight, but with the right credit card, responsible use, and some time, you can lift your score out of the credit basement. Here are some important things to know about giving your credit score a makeover:
Find the right card - Whether you go with a shopping card or a secured card, the first step is to find a credit card that will help you rebuild your credit. Prepaid cards, while they can be very useful for people who need a card and have a low credit score or no credit history, do not report to credit bureaus. That means they will not have any effect on your credit history and cannot help your credit score.
Keep it manageable - No matter what type of card you get, keep your purchases small and manageable so you can easily pay them off each month. Carrying a balance will result in interest charges that can be steep. Most cards for people who are repairing credit carry high APRs, so you want to avoid carrying balances from month to month and accruing interest. Don't buy things you cannot afford or you can get in over your head.
Always pay on time - Making payments when due is the most important you can do to show responsible use. Missing due dates also means late fees will be added and it can result in a rate hike if you get slapped with a penalty APR. Know when your payment due date and set up text or email reminders so you do not miss it. If you can, set up automatic payments so at least the minimum payment will come right out of your bank account every month. It is vital that you make on-time payments when you are trying to repair your credit.