Best Credit Cards For Raising Scores


Credit cards are essential to a good credit score. If you have no revolving credit, your credit score will suffer. Lenders want to see positive history, and having no credit card sends them a red flag about your credit situation. If you have a poor credit score, obtaining a credit card can be tricky. There are options out there however.

If you have absolutely abysmal credit, your only choice might be to get a secured credit card. Many companies and banks offer secured credit cards. With a secured card, you make a deposit in to an account that serves as your credit limit. Since the bank has collateral, they are more inclined to give you credit. A secured credit card works just like a regular credit card after you make the initial deposit. They report to the credit bureaus, and after you establish positive payment history, you will see your scores rise.

If you are hoping to get an unsecured credit card, some companies are better than others. Capital One has been known to offer low limit cards to people with bad credit. They often have great benefits such as no interest for a year. Also, after a few months they will increase your credit limit. Another company is Orchard Bank. They have a tool that allows you to input information that will match you with the best card offer. They offer cards with decent limits and easy to use customer service. The cards sometimes carry annual fees, so you have to decide if you want to pay those. Usually, it is a small price to pay to raise your credit score. Whatever credit card you obtain, make sure they report all three credit bureaus. Otherwise, the card is doing you no good. Ask around and look at website forums to find people who were in similar situations as you. Every credit card has reviews out there, so make sure you know everything you need to know about the company.

Chances are you are going to be faced with high interest rates on your credit card. Therefore, it is a good idea to use the card sparingly and pay the bill off in full. For example, you could choose to use your credit card to pay the phone bill and then pay the credit card company. If you pay it off in full, you will never have to worry about the interest. Also, the usage and payment history will show the credit card company that you are a good customer, and they will raise your limit. The higher your credit limit, the better your credit score will be.

Whatever credit card you get, it is important to keep your payments on time and your utilization low. Payment history is important. One late payment can cripple your credit score, especially if you are rebuilding. Utilization is also a huge score factor. Utilization is the ratio of debt to credit. If you have a high balance being reported, that is hurting your score. Credit companies report your balance on the day your statement is generated, not when you pay the bill. So while you have positive payment history, the high balance is hurting your score. Therefore, it is a good idea to contact the credit card company and ask them the date on which they do their reporting. Pay your credit card before that date and treat that as your due date. If you do that, you will have no balance reported and your credit score will be raised significantly. If you maintain a higher score, than you are in line for better interest rates and higher limit cards.

This post was written by

jason – who has written posts on Budget Clowns.
Father of three and married to a lovely women. Always looking for ways to save money, and invest it properly for my children's future.

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