Need Help with your Credit? Use these Credit Cards in 2018

If you’ve ever been declined when applying for a department store card or needed a co-signer when purchasing a car or getting a mortgage, you know first-hand the effect that bad credit can have on your life. Even if you’re trying to improve your credit score by applying for more credit cards, it seems that no one wants to take a chance on someone who has made some mistakes in the past. How are you supposed to improve your credit score if no one will give you credit?

Do not give up because there is a way to do it, and we’re going to show you how. There are some credit card companies out there who know how easy it is to fall into a rough patch but don’t believe that you should continue to suffer. They won’t let your blemished credit history get in the way of you obtaining a good credit card with a sensible limit that will put you back on the path to healthy credit. 

What is considered when computing my credit score?

• The number of inquiries you’ve had. Each time you apply for a credit card, an inquiry is made.
  
• Your total number of accounts. Companies like to see that you’ve used a variety of accounts responsibly. You’ll need 11 or more accounts to build an excellent credit score.
  
• The age of your credit history. This is how long you’ve been using credit cards; the longer you have, the better.
  
• Always making at least your minimum payments on time, all the time. One late payment will show up on your report.
  
• Derogatory marks such as accounts being past due or going to collections can stay on your credit report for 7 to 10 years.
  
• Credit card utilization plays a key role. This is the ratio between how much of a credit limit you have in total and what your balance is.
  

Keeping all this in mind, one of the best ways to fix your credit score is by actually getting credit. You have to be smart when applying for credit cards because each time you apply it’s added as an inquiry to your report and can affect your score. If you’ve been getting denied by unsecured credit card companies, it may be best to step back, pay some attention to your credit health, and opt for a secured credit card instead.

What is a secured credit card?

Essentially, a secured credit card is credit which you give to yourself. Several banks and credit card companies will allow you to deposit a refundable “down payment” which lets you set your own credit limit. For example, if you open a secured credit card with $3,000, the bank will give you a credit limit of the same amount and you’ll basically be borrowing against the money you gave.

This is the perfect way to build new credit or fix bad credit as using it and paying it off in a timely manner will let you build up a bit of history and show off your financial stability. After a while you can close your account, get your down “down payment” back, and apply for a subprime credit card.

What is a subprime credit card?

A subprime credit card is a type of credit card which is issued to people with substandard credit scores; they can be secured or unsecured. Though these usually have higher interest rates, lower credit limits, and more extra fees than a prime credit card, it is the next step in building your credit.

It is a great stepping stone for you to build your creditworthiness. If you make all of your payments on time and keep your balances low, it will reflect on your credit score and will alert lenders on how you are being responsible and competent with your finances.

Top Subprime Credit Cards

Capital One Secured/ Unsecured Mastercard

Depending on where you are on your journey to build your credit score, Capital One has both a secured and unsecured Mastercard. There’s no annual fee and the purchase rate is a variable APR of 24.99%. If you pay your first five monthly bills on time, you will be granted a higher credit limit.

Fingerhut Unsecured Card

Fingerhut’s purpose is to help people with poor credit get unsecured credit cards. The catch with them is that once you get approved, you can only use your credit line to purchase products from their inventory. They partner with a number of brands such as DeWalt, Samsung, and KitchenAid and offer everything from apparel and appliances to home furnishings.

Discover It Secured Credit Card

Discover’s “It” is a secured credit card that will give you a credit limit which matches your security deposit. The best features are that there is no annual fee, they will give you 2% cash back on select purchases at gas stations and restaurants, and if you establish a good payment history, you will be eligible to upgrade to an unsecured account.

There are lots of tools and options for people who may find themselves down a bad credit hole. All you need to do is take the time to research, create a plan, and always, always, make your payments on time. Good luck!