Credit Rebuilding Credit Cards - Effectively Use Credit Cars To Re-Build Your Credit
Credit rebuilding credit cards are available for people who bad credit or who are moving on from bankruptcy to rebuild their credit.
Whether you have filed for bankruptcy or are currently experiencing a poor credit situation, but want to reestablish your credit, it is time to start researching credit rebuilding credit cards.
Bankruptcy Or Bad Credit Cannot Stop Anyone From Rebuilding Their Credit
If you have gone through a period of bad credit, you can still start fresh and systematically work towards increasing your credit standing. Just because you had to turn to bankruptcy to erase piling debt does not mean the you will never be able to re-establish a solid financial life again. Most consumers who go through bankruptcy hope to have the opportunity to borrow money again at reasonable rates. That is not true at all. In fact, many are often surprised how quickly they can restore their financial credibility, even way before 7 years when their bankruptcy record become expunged from their credit files.
The best way to be approved for loans with low interest rates is to rebuild your FICO score and mend your broken relationships with lenders and financial companies. Varieties of different subprime lenders offer credit cards for not so perfect credit. Understand the advantages and disadvantages of qualifying for a secured or unsecured card and show you can be trusted with borrowed money once again.
Bad Credit Credit Cards
There are currently more than 40 million people in the United States with a FICO score of 600 or less. Obviously, these people may find it more difficult to find a card they can get approvals for with reasonable terms. If you have a FICO score of 550 or less and you are looking for rebuilding credit cards contact your bank or another financial institution and apply for a secured card. Secured cards are designed for individuals who have a low FICO score or no score at all. If you are not receiving regular card offers in the mail and you have already been turned down for unsecured credit cards you can rebuild your score by backing your balance with your own money.
A secured card is borrowed money that is backed by a savings account in the name of the applicant. Issuers will require you to deposit a lump sum of money to back the limit on the card to protect them in the event you cannot pay your balances. One of the main benefits of these rebuilding credit cards is the fact that you are not digging yourself into another pile of debt just to rebuild your FICO score. You are technically limited to spending only what you have a deposit balance to back up.
At the same time, with rebuilding credit credit cards, you get to reap the benefits of improving your FICO score. Before you choose an issuer, you should inquire on whether or not the issuer reports your payment history to the bureaus. The ideal secured card for rebuilding credit will be reporting your activities to the main credit bureaus Experian, Equifax and Transunion on a monthly basis. It should also offer you the opportunity to increase your credit limit after time.
If you've been denied your application for a regular card, these secured bad credit cards are sometimes referred to as second chance credit cards for good reason. They offer a second chance for folks looking to access the convenience of a Visa or MasterCard, while at the same time benefiting from them as credit rebuilding credit cards.
Cards for People with a Fair Score
Once you have proven you are responsible, enough to pay your monthly payments on your secured card you may be eligible for an unsecured card. Individuals with credit scores between 550 and 650 may be approved on unsecured credit card applications for fair credit. Unsecured rebuilding cards are a great way to rebuild your score if you can borrow responsibly. When you are applying for various cards read the terms and conditions in detail. Once you accept a card, use it immediately.
While it may seem silly, you will need to use your plastic and pay the balances off regularly. This keeps your debt to credit limit ratio low and it demonstrates that you are financially stable enough to make payments on time. If you do not use your card or you only pay the minimum amount due your credit score may only increase very slowly, if much at all. Not only that, this could accumulate high interest payments that you could otherwise be adding to your savings account.
Some people who have gone through bankruptcy or really bad credit episodes say they will never apply for a line of credit or touch credit cards again in their life. While this may seem like a responsible approach to controlling your finances, one day you may still have a need for a loan or a revolving credit account, whether it is for a car, medical care or for business investments.
If you are ready to move towards a better credit score, looking into secured rebuilding credit cards is a good first step. It is best to monitor your card usage carefully, keeping your card balances low and pay on time every month, to keep your account in excellent standing. Using a secured or unsecured credit card to rebuild your credit will allow you to build up your credit score and become eligible for better credit terms and financial flexibility in the future.