How to Find a Credit Card to Rebuild Credit

Secured credit cards are one way to rebuild your credit.

Once you have built up a bad credit history, it can be a big challenge to rebuild your credit. One way to do it is through the use of credit cards. You must be prepared to make on-time payments on the new credit cards and find a secured card to start. With a little patience, you can rebuild your credit through the careful use of credit cards.

Instructions

1. Use a site like Creditcards.com to find a secured credit card account with an issuer that reports to the major credit card bureaus. Creditcards.com and similar sites allow you to search specifically for secured cards. It also summarizes their terms. You will have to secure the card with funds that match your credit line. This is most commonly done by opening a savings account with the card issuer.

2. Make regular purchases with your secured credit card, and pay the bill promptly. Your purchases can be small. You just need to create a balance so you can make payments and build up an on-time payment history.

3. Ask the credit card issuer to raise your credit limit over the secured amount after you have built up a good payment history. Most will consider doing this after six months to a year of on-time payments.

4. Request copies of your credit reports from TransUnion, Equifax, and Experian to make sure that the account is being reported and that the information is accurate. You are allowed to get one free copy of your credit report from each of the bureaus on an annual basis.

5. Apply for an unsecured credit card after you have built up an on-time payment history for at least one year on your secured card. If you are turned down, don't immediately apply for another card. Too many inquiries can bring down your credit score. Wait another six months to a year before making another application.

Tips & Warnings

• When you apply for your first unsecured card, try to get it from your bank or credit union. Issuers with whom you do business may be more likely to approve your application, even if your credit history still has some problems.

• Don't try to find a credit card to rebuild your credit unless you are sure that you'll be able to pay the bill on time. If you miss a payment, it will harm your credit and make it even harder to rebuild.

References

• Secured credit card search site