They can be used to improve a low credit score. This is because it can create a positive payment history and improve your ratio of available credit to debt.
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 to improve your score more than a secured card. This is because secured cards are reported as a secured account to the bureaus and this will be weighted less than an unsecured account.
It is still wise to remove negative items from your report. However it has been discovered that once a negative item ages four years it will have much less impact on your score.
You should know that to get the most out of your card on your credit you should try to keep the balance at roughly 20% of your available credit. This will help because it shows the bureaus that you do use your card and are using it responsibly.
These cards were designed for those with; collections, judgments, repossessions, bankruptcies, and charge offs on their credit report. Every card does have different approval requirements but will give you an instant decision when you apply.
In sum we do suggest a sub prime credit card for individuals with a damaged credit history. It can be used to help you build positive credit and rebuild your score.
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