Credit Repair Credit Card Options

One of the fastest ways in repairing your credit is to apply for a credit card as soon as possible. If you find  yourself in a situation where you have a poor credit record you may be thinking that it will be impossible to apply for a credit card again. Although, it will be more difficult there are ways that you can acquire a credit repair credit card.

How difficult it will be will depend on why you need to repair your credit in the first place. There are many factors that can lower your credit worthiness and each one will either have a lower or higher level of severity.

The following are some examples:

Undischarged Bankruptcy

One of the worst factors that could prevent you from obtaining a credit card is an undischarged bankruptcy. There will not be any lender that will accept you while you are going through this process.

Until you are discharged from bankruptcy for more than 6 month should you even consider applying for a credit card. However, being discharged will still mean that your eligibility depends on the lender checking your credit history and the level of debts that are still outstanding on your accounts.

Although using a  cards is an effective way to rebuild your credit worth you need to make sure that you use it carefully. The last thing you want to do is run up more debt. Therefore, before applying think carefully and ask yourself if you will have the disciple to use it sensibly.

The first step is to check your credit report and score. You can obtain these from any of the three major collection bureaus who are Transunion, Experian and Equifax. The report will give you an idea of how healthy your credit worth is. Your score is a grade and this reflects if you have a good or bad credit history. Also,check the report carefully for any errors as you can dispute these and have them changed.

Specialist Credit Cards To Repair Credit

With a poor credit rating especially with a bankruptcy hanging over your head you will find it very challenging in getting a card from the regular card issuers. Also, you are more likely to have your application rejected  and rejections will be recorded on your credit report which can lower your score further. Not a good idea! 

In this situation you will have a better chance by approaching the specialist card lenders.Although, the specialist lenders are more sympathetic to your situation they will still need to ensure that you are a good credit risk. You should always bear in mind that lenders are in this game to make profits.  

An important point to mention is that these credit repair credit cards will have higher interest rate charges and monthly fees compared to the standard cards. Many also have set up fees, annual fees and some bad credit credit cards can cost you as much as $15 a month. 

Before choosing these types of cards make sure you fully understand the costs involved and that you can afford them. Weigh this up with why your doing it, which is to rebuild your credit and decide if it is worth it. In the short term these cards will be more expensive however, they provide the opportunity to improve your credit worth. Once you have rebuilt your credit you can look elsewhere for the cheaper mainstream cards.

If you find it difficult managing your finances then consider seeking the help of a credit counseling agency. They have personal financial advisers that can help you develop a budget and a debt repayment plan that will help you get on the good side of your  creditors

Best Credit Repair Credit Cards

When it comes to consumer credit cards you have 2 types. They are either secured or unsecured.

Below is a short description of each one:

(1) Unsecured Credit Cards

The important word here is "unsecured" this means that a bank or lender will give you money based on how well you have managed your finances in the past. Therefore, the key element here is your credit history and score.

If you have shown the ability to manage your finances effectively and you have a high score on the credit score scale you can qualify for an unsecured credit card.

The fly in the ointment for someone with a poor credit history is that they will check your score. Any kind of negative listing can reduce your chances of getting an unsecured card. That is why these cards are more suited to people with a good credit score.

(1.2) Bad Credit Unsecured Credit Cards

Due to the fact that more people are experiencing bad debt problems credit card companies are introducing more of what is called bad credit unsecured credit cards onto the market. These are targeted at people with poor credit ratings however, to qualify for this type of card the lender will check your credit file to ascertain the risk involved.

Again, these types of cards have high fees. The point of these cards is really for lenders to make more money out of people in vulnerable and desperate situations. So, look at these carefully and work out how much the fees are going to cost you and decide if you can really afford it.

(2) Secured Credit Cards

This type of card is a similar concept to a mortgage in that you need to put up a deposit first before you are issued with a card. The bank is willing to give the person a large amount of money because the risk is hedged in the banks favor by the property being secured against the loan if the person happens to default i.e. the bank can sell the house and recover the money from the sale.

A secured credit card can work in a similar way. To get the card you must advance a sum of money in the form of a deposit to the bank and this will be used to establish your credit limit. As with a mortgage the card issuers risk is hedged as the cardholder's deposit will be recovered by the bank if they default.

The big attractive factor with these cards is that the card issuers do not rely as heavily on your credit report and score. The only thing is that you will need sufficient funds up front for the deposit in order to qualify.