[DISCLOSURE: Cards from our partners are mentioned below.]
Chances are, your credit isn’t actually the worst. According to data furnished to Credit.com by TransUnion, only a very tiny portion of the U.S.’s scoreable population has the lowest VantageScore possible. Of course, escaping the dreaded 300 won’t get your credit out of the woods. Any score below 600 is considered, well, bad, and even a score in the 650 to 699 range will cost you in interest.
Still, there’s no need to despair: Nothing lasts forever, including a terrible credit score. You’ve just got to take steps to rebuild it. Paying down high balances, shoring up delinquencies, paying collection accounts and disputing errors on your credit report are great places to start. (The further you get from 300, the better. You can track your progress using Credit.com’s free credit report summary.)
After that, consider getting a new credit card. It sounds counterintuitive, we know, but that plastic can be instrumental when it comes to reestablishing a solid payment history. Just be sure to pay all your bills on time and keep balances as low as possible.
Here are five cards designed to help people with bad credit rebuild their scores. (See card agreements for full terms and conditions.)
OpenSky® Secured Visa® Credit Card
- No credit check to apply. Zero credit risk to apply!
- Looking to build or rebuild your credit? 2/3 of cardholders receive a 48+ point improvement after making 3 on-time payments
- Extend your $200 credit line by getting considered for an unsecured credit line increase after 6 months, no additional deposit required!
- Get free monthly access to your FICO score in our mobile application
- Build your credit history across 3 major credit reporting agencies: Experian, Equifax, and Transunion
- Add to your mobile wallet and make purchases using Apple Pay, Samsung Pay and Google Pay
- Fund your card with a low $200 refundable security deposit to get a $200 credit line
- Apply in less than 5 minutes with our mobile first application
- Choose the due date that fits your schedule with flexible payment dates
- Join over 1.2 million cardholders who’ve used OpenSky to build their credit
Annual Fee: $35
Purchase Annual Percentage Rate (APR): 25.64% (variable)
Why It’s a Good Option: Yes, secured credit cards are designed for people with bad credit, but most still require a credit check, and there’s no guarantee you’ll be approved. The OpenSky Secured Visa Credit Card foregoes pulling your credit and doesn’t require a checking account either, so if your finances are really damaged, you may want to take up their offer. OpenSky reports to all three credit bureaus, so you’re covered there. And there’s a wide range for a security deposit: You can put down as little as $200 and up to $3,000.
Beyond that, the terms of the card are decent, especially given that there’s no credit check. (There are certainly secured credit cards out there touting higher APRs and annual fees.) One drawback worth mentioning: There’s no built-in way to upgrade to an unsecured credit card, so you’ll have to improve your scores and apply elsewhere.
First Progress Platinum Select Mastercard® Secured Credit Card
- 1% Cash Back Rewards on payments
- Choose your own credit line - $200 to $2000 – based on your security deposit
- Build your credit score.¹ Reports to all 3 credit bureaus
- No minimum credit score required for approval!
- ¹ Cardholders who keep their balance low and pay their credit card bill on time every month typically do see an increase in their credit score.
Annual Fee: $39
Purchase APR: 19.24% Variable APR for Purchases
Why it’s a Good Option: There’s no credit history or minimum credit score required for approval — so long as you don’t have a pending bankruptcy. First Progress reports to all three major credit bureaus, offers a flexible deposit range ($200 to $2,000) and features a reasonable annual fee and low APR. Again, the potential drawbacks are that you don’t have a built-in option to upgrade and the card isn’t currently available in Arkansas, Iowa, New York or Wisconsin.
Annual Fee:
Purchase APR:
Why It’s a Good Option: This card is a good option, as long as your monthly income exceeds your monthly expenses by $100 or more. Plus, while that $49 annual fee can be bested, you’ll be hard-pressed to find a secured credit card with an APR lower than primor’s. There’s no penalty APR either, though you’ll still want to pay your bills on time and ideally in full. Your card use will be reported to all three credit bureaus, and you can put down a deposit of $200 to $5,000. There are no built-in upgrades with an unsecured credit card, however.
Merrick Bank Secured Credit Card
- Choose your own credit line based on how much money you want to put down as a security deposit.
- Initial deposits can be from $200 to $3,000. You can increase your credit line at any time by adding additional money to your security deposit, up to $3,000.
- After 9 months, we review your account for a credit line increase. No additional deposit required!
- Secured Credit Cards are great for people looking to build or rebuild credit and are available to people with all kinds of credit backgrounds.
- Unlike a debit card or a pre-paid card, it helps build your credit history. We report your payment history to all three major credit-reporting agencies.
- Get your FICO® Credit Score for free each month.
- Fraud coverage if your card is lost or stolen. Access your account 24 hours a day, 7 days a week. Get help staying on track with available Auto Pay and account alerts.
- Card issued by Merrick Bank, Member FDIC.
Annual Fee: $36 for first year. Billed $3 per month thereafter
Purchase APR: 22.70% Variable
Why It’s a Good Option: The Merrick Bank Secured Visa is available for individuals with bad credit or no credit. You can use this card to build or rebuild your credit with a flexible credit line up to $3,000. To help you track your credit, this card offers your monthly FICO score for free. Plus, after the first year, your account is regularly reviewed for credit line increases without an additional security deposit.
At publishing time, the OpenSky Visa Secured, First Progress MasterCard Select Secured, primor Secured Visa Gold and Secured Visa from Merrick Bank credit cards are offered through Credit.com product pages, and Credit.com is compensated if our users apply and ultimately sign up for these cards. However, these relationships do not result in any preferential editorial treatment. This content is not provided by the card issuer(s). Any opinions expressed are those of Credit.com alone, and have not been reviewed, approved or otherwise endorsed by the issuer(s).
Image: mapodile
