Rebuilding your credit after bankruptcy, credit charge offs, judgments or other financial problems can be daunting. You don't want to deal with rejection after rejection while attempting to rebuild your credit. Some companies specialize in bad credit loans and accounts, while other types of credit have a lower barrier to entry.
Secured Cards
A secured credit card requires an upfront deposit of your own money, placed into a savings account which the bank controls. In return, the bank issues you a credit card with a limit equal to the amount in the savings account.
Rent-to-Own
Rent-to-own stores spread payments for different items over a long-term period, so you pay a low cost per month. You will pay more overall for the items you're buying, but many of these stores add a tradeline to your credit report.
Buy Here, Pay Here
Buy here, pay here auto and furniture stores report to credit reporting agencies. You will pay more overall, but low credit scores are often accepted, and the business may not even do a credit check. Pay these accounts on time to build up the positive tradeline.
Credit Unions
A small, local credit union may be more likely to issue you a credit building card than a larger bank. You can talk face to face with the loan department at a credit union in many cases, and explain how you are keeping yourself out of credit trouble and how you are going to use the card.
Bad Credit Accounts
Some credit card companies have credit offerings that focus specifically on low credit borrowers or bankruptcy debtors. These cards and loans usually offset the company's risk by charging higher interest rates, annual fees or other methods of mitigating damage in the event of a default.
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