Subprime Credit Card
These credit cards have been designed to give you a second chance with your credit. It is for those with a low or damaged credit score.
Used responsibly these cards will create a positive payment history and improve your ratio of available credit to debt. Frequently these cards are used to repair a damaged score.
These two factors are heavily weighted on your credit score. Improving them you can achieve a high score even with negative items on your report.
These cards will report to the major credit bureaus. They will come with an APR around 19% and will have an annual fee. However the benefit of improving your score will offset the high price of a low credit score.
Most of these cards come with a $300 credit limit. However some cards such as the Tribute MasterCard will also approve individuals for a $70 credit limit and many will offer periodic limit increases.
These cards will help your score more that a secured credit card. This is because a secured card is reported to the bureaus as a secured account and will not impact your score as much as an unsecured account.
You should still try to remove derogatory items from your credit report. However you should know that once a derogatory item ages for four years then it will have much less weight on your score.
For you to get the most out of your card you should strive to keep the monthly balance at 25% of your credit limit. This is because it shows the bureaus that you are using your card responsibly and that you do in fact use your card.
You can still get approval for a sub prime card even with; charge offs, collections, judgments, and even a bankruptcy. However each card has different approval requirements. Many of them will give you an instant decision upon submission of your application.
In sum if you have made mistakes in the past with your credit and want a second chance we suggest a sub prime card. It can improve your ratio of available credit to debt and build a positive payment history.
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