Find out more on Debt Consolidation Credit Counseling In Phoenix Now!
Sunday, December 21, 2008
Getting a credit card to help rebuild your credit history is a very wise decision. A credit card can help you create a positive payment history.
However you will only qualify for a sub prime credit card if you have a damaged credit score. This means your card will have an interest rate around 19%.
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.
Your card will have a credit limit around $300. The other alternative is to get a secured credit card.
With a secured card you will have to put an initial deposit down and how ever much your deposit is that will be your available credit. The benefit of a secured card is that they approve everyone.
Both of these cards offer online approval. However before you apply for any card double check and make sure that card does report monthly to all three bureaus.
Another tip to help you get the most benefit to your credit is to keep your balance at roughly 10% of your credit limit. For example a credit limit of $300 you will want to keep the monthly balance at $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.
There is one other option that we strongly discourage and that is a shopping or catalog card. This is a credit card that is only able to make purchases through a catalog or a website online. We discourage this option because there is often a large down payment required and the card typically only reports to one credit bureau.
A prepaid card is another option. This is a good choice if you are unable to open a checking account because this card will work just like a bank account.
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.
However you will only qualify for a sub prime credit card if you have a damaged credit score. This means your card will have an interest rate around 19%.
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.
Your card will have a credit limit around $300. The other alternative is to get a secured credit card.
With a secured card you will have to put an initial deposit down and how ever much your deposit is that will be your available credit. The benefit of a secured card is that they approve everyone.
Both of these cards offer online approval. However before you apply for any card double check and make sure that card does report monthly to all three bureaus.
Another tip to help you get the most benefit to your credit is to keep your balance at roughly 10% of your credit limit. For example a credit limit of $300 you will want to keep the monthly balance at $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.
There is one other option that we strongly discourage and that is a shopping or catalog card. This is a credit card that is only able to make purchases through a catalog or a website online. We discourage this option because there is often a large down payment required and the card typically only reports to one credit bureau.
A prepaid card is another option. This is a good choice if you are unable to open a checking account because this card will work just like a bank account.
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.
About the Author:
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.
posted by Credit Counseling at
2:28 PM
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