Do you have a couple dings on your credit report? Are you looking for a credit card for rebuilding credit? There are a few options available. First, you must make sure your credit card account will give you:
- Monthly Credit Bureau Reporting
It is key that good credit cards for building credit will report your account information to all 3 of the major credit bureaus. Please, before you apply for any credit card, double check and make sure it will report your account monthly, to all 3 of the major credit bureaus.
If your account is not reported to all 3 of the credit bureaus. This credit card will do essentially nothing to rebuild your credit, because the credit bureaus won’t even know you have it.
With prepaid reloadable credit cards because you aren’t actually using any credit or being lent any money. Your prepaid account is not reported to the credit bureaus. It is a common tactic for less than reputable credit cards to say “credit bureau reporting.”
On close inspection these credit cards will usually only report your account information to 1 of the 3 major credit bureaus. This can help 1 credit bureaus credit report for you. But what about the other 2 credit reports you have? In other words, make sure your account is reported to all 3 credit bureaus.
Best Credit Cards For Rebuilding Credit
The best credit card to rebuild credit is an unsecured Visa or MasterCard. However, approval requirements for unsecured credit cards have increased significantly. Most folks without a perfect credit history are going to have to choose between a partially secured credit card or a fully secured credit card.
Partially Secured Credit Cards
A partially secured credit card will require you to make an initial security deposit. This security deposit is made with the bank issuing the credit card. It will secure part of the credit line on your credit card.
Most commonly, we have seen credit cards offering you a $300 credit line. With roughly a $100 security deposit required from you. Partially secured credit cards carry a very high expense. We’ve seen interest rates as high as 36% APR. Additionally these credit cards will carry maintenance fees, annual fees, and many other fees.
Fully Secured Credit Cards
Instead, we encourage you to get a fully secured credit card to rebuild credit. This is still going to be a Visa or MasterCard. You will have to make a security deposit for the full credit line with this type of credit card. This is the difference between partially and fully secured credit cards.
If your credit card has a $300 credit limit. You will first have to make a $300 deposit with the bank. This deposit is fully refundable provided you keep your account in good standing. Additionally, with a secured credit card you get to choose the amount of your credit limit. Often you can deposit as little as $200 or as much as $5,000. The amount of your deposit will equal your credit limit.
Rebuilding Credit Is a 2 Step Process
If you are really committed to rebuilding credit. Then, you should remove bad credit on your credit report. In addition to building new positive accounts. You must do both simultaneously. The negative items on your credit report will always be damaging your credit score.
Get more credit help with Dan Willis and sign up for our free newsletter. Get a free credit consultation by calling toll-free 1-877-418-7596.
Get a FREE Credit Consultation