To recreate a bad credit history, you need to start adding positive information to your credit score. The more positive information you can add, the more your credit score will improve. The problem is finding credit cards for bad credit rebuilding. The majority of credit cards on the market are for people with good to very good credit scores. Finding credit cards for credit rebuilding is not always easy. But there are some credit cards out there that approve people who are recreating their credit.
Secure credit cards for bad credit reconstruction
Secure credit cards are great options for credit rebuilding because they usually don’t require a credit check. Secure credit cards behave like normal credit cards. The difference is that you have a deposit against the credit limit on the card. The deposit will be placed in a savings account and will only be used if you default on your credit card. Otherwise, your purchases go against your credit limit.
If you have enough money for a deposit, you can use a secured credit card. Your deposit could be as low as $ 49 on the Capital One Secured Mastercard. Discovering Secured Credit Card, which is a secured reward card, is another great option for rebuilding your credit card.
There are some other good secured credit cards on the market. Look for a secured card that reports to the major credit bureaus, has low annual fees, and converts to an unsecured credit card after a period of timely payments.
Other credit card options
Retail credit cards are an option, but the high interest rate and limited use make them less attractive than other credit cards for credit rebuilding. If you are approved for retail credit cards, you will likely have a very low credit limit, around $ 100 to $ 300. You may be able to have your credit limit increased regularly as you use your card responsibly and pay on time each month, Several months of positive payments with a retail card can qualify you for something better.
Look out for credit cards like the Applied via Gold Visa, which charge extremely high annual fees relative to the credit limit – a $ 125 annual fee for a $ 500 credit limit in this case. These fee roder cards are used by consumers with bad credit who have difficulty qualifying for credit elsewhere. The high cost is not worth the small advantage.
Finally, prepaid cards are a credit card or checking account alternative that can be used to make credit card and debit card type purchases. However, these cards don’t improve your credit score – at least not the mainstream credit score that most lenders use to approve your applications.