Credit Repair Articles

Rebuild Credit - How to Rebuild Credit by opening up credit card accounts.

Credit Repair Articles - Rebuild Credit

Rebuilding credit using credit cards might be easier than you think. So many people think that they need good credit before they can obtain a credit card. This could not be further from the truth. In reality, having a credit card and using it responsibly is the best way to REBUILD credit. While someone with bad credit can’t be approved for a gold MasterCard at a low interest rate, you can easily get approved for a sub-prime risk or merchandise credit card. I have personally assisted thousands of consumers with low credit scores and a poor credit history obtain new credit.

A subprime credit card is typically for people with low credit scores who are considered high risk due to their credit history. They usually assess a high application or annual fee for this type of card, but you can use the credit card to make purchases at most retailers. A merchandise credit card is limited to the card issuer’s product line. There are a wide range of products that are available depending on the merchandise card you choose. Either way, as long as you are paying the card as agreed and the activity is reported to the credit reporting bureaus, then you are rebuilding your credit in the process. It is that simple!

If the credit card meets certain requirements, then you can expect to see your credit score steadily rise. You might be wondering what that criteria is. The credit card company must report your credit usage and payment history to at least 1 of the three major credit reporting agencies and not be secured by a savings account or other financial instrument. This means that someone is extending you an actual line of credit where you are receiving merchandise or services and being allowed to pay over time, based on your word and nothing else.

Given the current economy, sub prime and merchandise credit card issuers are in abundance. Since the consumer is required to pay a high application fee and/or high annual fee, the credit card company is taking a minimal risk in relation to the total credit line that they offer initially. For example, the application fee may be $100, but you will be extended a $200 credit line. In this instance, the credit card issuer has already made $100 off the application fee so if you default on the credit card, they are not out the full $200.

If you need a credit card to rebuild your credit, you should be aware that not all credit card issuers will hit you over the head with huge fees. I have found a few good sub prime credit cards with a reasonable fee structure. The key is to shop around for the card that best fits your unique situation. It is important to review the terms and conditions of the credit card so you can be sure to pay according to the agreement and rebuild your credit.