Your credit history can keep you from obtaining the things you need, getting a line of credit and even getting a job in some cases. Improving your credit score and history takes time, paying your bills on time and patience. You can't rebuild it overnight, but there are certain types of credit card that will help you in restoring your credit.
Apply for a Secured Credit Card
The first type of credit card to consider is one where you maintain a deposit with a bank and a card is issued for you to use based on the amount of your deposit. This is a secured credit card--they work just like a regular credit card, but your deposit is like collateral if you skip a payment. The more you deposit, the higher your credit limit. You can improve your credit score by making on-time payments every month and not going over your credit limit. These cards do have drawbacks: having to make deposits into a account, annual fees and high interest rates. Note--many of these cards are guaranteed approval no matter what condition your credit history or score is in.
Apply for a Credit Card Geared Toward "High-Risk" Clients
Another type of credit card to consider is one geared toward individuals with poor credit. Visit Bad Credit Offers.com to apply online to companies including First Premier and Centennial. These credit cards generally come with a large setup fee, an annual fee that is billed monthly, higher interest rates and a small credit line from $200 to $500---depending on your credit score. With on-time payments and keeping your balance way below the set credit limit, you get an increase in your credit limit as well as a boast of your credit score.
Apply for Prepaid Credit Cards That Report to Credit Agencies
Prepaid credit cards, like the Rushcard and AccountNow, offer guaranteed approval and they report your card activity to major credit reporting agencies. The credit reporting service is optional and you must enroll in a bill pay service where you can pay your bills with the prepaid credit card. Prepaid cards usually charge a monthly fee and the setup fee is normally around $20.
Reduce Your Debt-to-Income Ratio
After you have made a decision to restore your credit and you have applied and received a credit card for this purpose, make sure you pay on time and reduce your overall debt-to-income ratio. The ratio is the amount you owe to creditors compared with the amount of income you are bringing in from a job or other means of support. Also, pay off unnecessary bills and keep your credit balances low. With time your credit score and history will improve.
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