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Rebuild Your Credit Score with Merchandise Cards

If you’re just starting to build a financial history or have already established one only to see it come crashing down following an unexpected financial hit, then you’re in the position of needing to build a credit score. One way to do this is with a credit card. Merchandise cards are a financial device, so you must use them the right way to build or rebuild credit.

Easy Credit Cards to Get

Credit histories are not of the one-size-fits-all variety. When it comes to credit, each person’s profile will be unique to him or her. What does this mean? It means that while one type of card may be easy for one person to get, it may not be for another. For instance, a card that’s easy for a student to get won’t be the same one that’s easy for a person with a bankruptcy to acquire. However, there are a few that may be easier in general to obtain. Here’s a list of them.

  1. (Guaranteed Approval*) The Horizon Gold Card
    A merchandise card is one of the easiest lines of credit available. The Horizon Gold Card is a $500 line of credit with a 0%APR, which reports to the credit bureau. This card is a great option for people with damaged credit. Approval odds are not effected by your credit score!

  2. Capital One Platinum Credit Card
    If your credit rating is considered fair, then Capital One may take you on as a credit card member. The account doesn’t require an annual fee, and the company will give you a shot at a higher credit limit after you’ve made your first five payments on time. With this card, you may have a high interest rate, something around 26 percent variable. Also, when your credit is fair, you probably won’t qualify for introductory rates or balance transfer options.

  3. Credit One Bank Platinum Visa
    This financial institution is also a little more forgiving when it comes to your credit score. You could wind up with annual fee for this card, but it will depend on the promotions that the company has going on. You may want to consider a card with Credit One because it does offer a 1 percent cash back reward on purchases. The interest rate may be a little lower with this card. Credit One offers an interest rate range of just over 20 percent to 26 percent.

  4. Fingerhut Credit Account
    You’ll appreciate the easy application process with this credit card. In fact, the financial institution will give you a decision in just seconds. The company reports to the three major credit bureaus. If you’re approved, then you can use the line of credit to make purchases from various brands. The company does not charge an annual fee for the card.

  5. Discover it Secured Card
    If you have no credit or very low credit, then consider applying for a secured card like the Discover it Secured Card. The financial institution will not charge you an annual fee. With a secured card, you determine the limit by sending in a refundable deposit. The Discover it Secured Card allows you to send in from $200 to $2,500. This secured card comes with a 10.99 percent introductory interest rate for six months. After the intro, the rate increases to around 25 percent variable. With the Discover Card, you’ll receive 2 percent cash back when you make purchases at gas stations and restaurants. The cap on this is $1,000.

Using One of These Cards to Improve Your Credit

Upon receiving your new credit card, be sure to manage your use of it to rebuild credit. For instance, pay your bill on time. In fact, consider setting up an automatic payment through your bank or the card issuer. Also, it’s best to pay your bill in full each month. Doing so means that you’ll just pay what you charged instead of paying the card issuer interest.

Use caution when applying for different credit cards. Credit bureaus determine a person’s score based on the type of credit cards that he or she has. A good blend of credit card accounts is ideal. The best way to build your credit is to have both revolving and installment type accounts.

Be mindful about the amount of credit that you’re using by considering the amount that you have available. To improve your credit score, use 25 percent or less of your available credit. For instance, if you have a credit card with a $1,500 limit, don’t use more than $375 of it before paying it off.

Don’t close old merchandise cards even if you aren’t using them. Credit bureaus consider the length of your credit history. In fact, the length is 15 percent of your total credit score. Keeping an old one open can also help with your credit utilization ratio.

Getting Ahead

Your credit score matters. When you have a good or excellent one, you’ll qualify for the lowest available interest rates. You’ll also have access to more funds. The good thing about credit is that it is fixable as long as you pay your bills on time, borrow the appropriate amount and have a mixture of different types of credit.

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