You can use a card to help rebuild your score.
This will help you build a positive payment history and will improve your ratio of available credit to debt; both these factors are heavily weighed in your score.
When you have a damaged report you will be faced with a sub prime interest rate.
This means you will have an interest rate around 19%.
It is very important to remove negative items on your report, while improving your score.
However you should know that once a negative item ages four years then it has much less impact.
If it is low you will still be able to qualify for a sub prime card.
This means you will pay approximately 19% APR and an annual fee.
You limit will be approximately $300.
The other option is to get a secured card, however your score will not receive the same benefit.
You will have to put a deposit down and the amount of your deposit is the equivalent of your limit.
It will report to the bureaus however it will not give you the same benefit as an unsecured account.
Both these types of cards offer instant approval.
Before you apply double check and make sure that they report to all three bureaus.
Another tip to help you get the most benefit is to keep your balance at roughly 10% of your limit.
For example a limit of $300 you will want to keep the monthly balance at $30.
This shows the bureaus that you do have available credit.
In addition it shows the bureaus that you do use your card and responsibly.
The last option is a shopping card this is only accepted at a specific location.
We do not suggest these; they often come with large upfront payments and only report to one bureau.
A prepaid card is another option.
This is a good choice if you are unable to open a checking account because it will work just like a bank account.
In sum we suggest a sub prime unsecured card to help rebuild your score.
It will help you create a positive payment history.