Credit Card Applications to Rebuild Credit

Improving your credit can often be a long process, but there are ways to do it. An important first step is requesting a credit report to better understand what is causing a low score. The Federal Trade Commission's website lists several ways to request a free report. Credit reporting agencies want to see that you can handle credit responsibly, and that you have the means to pay your debts. Therefore, if you have bad credit, the credit cards you qualify for may initially have low credit limits, high interest rates and annual fees. However, if you prove that you are responsible with credit, these can improve over time.

Current Credit Cards

If you currently have credit cards with balances, it is important to pay these down before you apply for new credit cards. Credit reporting agencies report a percentage of credit in use, which will be given on your credit report. By paying down revolving accounts, such as credit cards, you are decreasing your percentage and increasing your credit worthiness. Paying these down is the first step toward improving credit.

Credit Card Applications

If your credit is bad and you don't have current credit, it may be difficult to get a new credit card, but not impossible. One step you can take is to call a company that has previously given you credit. If you have proven that you were responsible in the past, there is a chance that they may give you a chance again.

Again, it is important to remember that you won't be getting a prime rate, but it is the first step toward building your credit.

Credit Card Use

Once you are approved for a credit card, use it wisely as that will help you in the long run. Limit your use of a credit card to only those times when you can afford to pay it off in full at the end of the month. This way you won't accrue interest and you will prove that you are using credit responsibly.

Gradual Improvement

In time, by using your credit card responsibly, you will be granted a higher limit, a lower interest rate and your annual fee may be reduced or even waived. According to the FTC, continuing to use credit cards wisely will also allow you to apply for larger loans, such as car and home loans, at better rates.