One of the first steps of credit repair is to reestablish credit. By creating good, positive new credit history you will begin to show lenders your trustworthiness.
Without a doubt, one of the easiest ways to reestablish credit is by obtaining a credit card. The easiest credit card for bad credit to qualify for is a secured card, where you make a deposit with the lender and they issue you a credit line against it. As an example, you would give the lender $500 and they would issue you a credit card for $500.
Secured cards can be a great place to start – especially if you are looking for credit cards after bankruptcy. You also may be able to qualify for an unsecured credit card. Unsecured credit cards are more difficult to qualify for than a secured card, but they will have a more positive impact on your credit score.
Lenders that specialize in unsecured credit cards for bad credit are going to be more lenient when looking at your credit history than most lenders. While they will not require that your credit be perfect, they want to see that you are paying your current obligations, and that you are not overextended with credit cards. If you are just beginning to reestablish credit, your limit will likely be low (under $500) but over time as you handle the account responsibly the lender will increase your credit limit.
Key things to look for in unsecured credit cards are:
• Interest Rates
• Is the interest fixed or variable? Under what conditions can the interest be changed?
• When do you need to make a payment to avoid paying interest if you are paying the card in full each month.
• What is the application fee? Getting a $300 credit line that charges a $195 application fee doesn’t make sense.
• What is the annual fee? Most unsecured cards for bad credit will charge an annual fee, but it is a good ideal to look for the lowest possible fee based on your situation.
• Does the lender report to all three credit bureaus? It doesn’t make sense to get a card for purposes of credit repair and then select a lender that doesn’t report to the bureaus.
While I wouldn’t recommend going out there and applying for 5 or 6 different credit cards just to see if you might be approved, it is worthwhile to do some research on unsecured credit cards for bad credit and see if you might be able to qualify. There are many places you can apply on the web and get an answer in just a few minutes. Lenders I can think of that offer credit cards for poor credit are Orchard Bank and First Premier. You could also try Sam’s Club Discover Card.
By using your credit wisely, you gradually raise credit scores. Just be careful to avoid getting into too much credit cards debt!
By the way, if you find yourself saying “I need to repair my credit” don’t forget that we offer a membership side to Credit Repair College! We will walk you through everything you need to know to fix your financial situation step by step!
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