From qualifying for the best credit card reward offers to receiving favorable rates on auto loans and mortgages, your credit score can have a major impact on your life.
Information about you and your credit experiences, like your bill-paying history; the number, age, and types of accounts you have; outstanding debt; and collection actions is used to develop your credit score. If you have a long history of effectively managing your credit, you're likely to have a good credit score, but if you've never used a credit card or have negative information on your credit report, such as a history of missing payments, you may struggle to secure a loan, rent an apartment, get a job, or qualify for good credit card offers.
If your credit score needs improvement, responsibly using a credit card is a good way to help you rebuild your credit. While those with a low credit score might not yet be eligible for great rewards or cash-back credit card offers, there are a number of cards out there designed with low credit scores in mind. Below you'll find our expert's top picks for credit cards to rebuild credit.
A little different than traditional credit cards, many of these cards are "secured cards" that require a refundable deposit in order for you to qualify. Most of the time, the structuring is easy. The higher the deposit you put down, the higher the line of credit. If you put down a $500 deposit, you then have a $500 line of credit. It's as easy as that.
Sometimes a card will have a limit on how much of a deposit you can put down, but almost always, there will be a minimum deposit amount; usually around $200 (but not always that high!).
You can always add to your deposit to increase your line of credit (within limitations), and sometimes, as with the Capital One® Secured Mastercard®, you can get access to a higher credit line just for making payments on time, with no additional deposit needed.
With most of these cards offering credit rebuilding tips, credit score tracking and reporting to the three major credit bureaus, with responsible spending and bill paying, you should be on the road to a higher credit score in no time!
Why We Like It: Why not earn a little while working on rebuilding your credit? Not only does the Discover it® Secured Card - No Annual Fee report to the three major credit bureaus and include your FICO credit score on your monthly statements, but this no-annual-fee card will also allow you to earn cash back on your purchases. AND, Discover will automatically match all the cash back you've earned at the end of your first year, which is a great perk for even the best rewards cards!
The Bonus: Discover will automatically match all the cash back you've earned at the end of your first year.
The Annual Fee: $0. A security deposit of at least $200 will be required to establish your line of credit.
The Rewards: Earn 2 percent cash back at restaurants and gas stations on up to $1,000 in combined purchases each quarter; additionally, earn 1 percent back on all your other purchases.
Why We Like It: If you, like so many people, get anxious waiting on card approval, the Credit One Bank® Unsecured Platinum Visa® might be for you. With the Credit One Bank® Unsecured Platinum Visa®, you can find out if you're approved for the card in less than a minute, without affecting your credit score. Plus, this card offers free credit score tracking and 1 percent cash back on eligible purchases.
The Annual Fee: $0-$75 for the first year, $0-$99 thereafter, depending on creditworthiness
The Rewards: In addition to free credit score tracking and fraud liability protection against unauthorized charges, cardholders can earn 1 percent cash back on eligible purchases like gas, groceries and dining out.
UNITY® Visa Secured Credit Card - The Comeback Card™
Why We Like It: The right credit card is a great early step in rebuilding your credit, but it takes a little more than that to make a real comeback. With the UNITY® Visa Secured Credit Card - The Comeback Card™ you'll have access to OneUnited's "How to Rebuild Credit Program" so you can more consciously work on rebuilding your credit with your new card. Plus, unlike with prepaid cards, your activity with this card will be reported to credit bureaus, so use it wisely and you could be headed to a better credit score in no time.
The Annual Fee: $39, plus a security deposit of at least $250 (fully refundable).
The Rewards: Reporting to the three major credit bureaus and access to the How to Rebuild Credit Program means the rewards with this card are in the form of getting your credit back in order so you can really start reaping some credit card rewards with a traditional card.
Why We Like It: Not only does the Capital One® Secured Mastercard® come with some of the same benefits of the Capital One® Platinum Credit Card, like extended warranty, auto rental insurance, travel accident insurance, 24/7 travel and roadside assistance, and price protection, this no-annual-fee card also requires the lowest minimum security deposit out of all of the credit cards that we reviewed. Depending on your creditworthiness you could qualify for an account with a deposit of just $49.
The Bonus: Get access to a higher line of credit after making your first five monthly payments on time with no additional deposit needed.
The Annual Fee: $0, plus a minimum $49 security deposit depending on credit worthiness.
The Rewards: In addition to fraud coverage and 24/7 customer service, cardholders have access to extended warranty offers, auto rental insurance, travel accident insurance, 24/7 travel and roadside assistance, and price protection services.
Why We Like It: Similar to the UNITY® Visa Secured Credit Card - The Comeback Card™, the OpenSky® Secured Visa® Credit Card also reports monthly to the three major credit bureaus, as well as provides online credit education and an e-newsletter to help cardholders proactively work on improving credit. Plus, OpenSky® Secured Visa® Credit Card also offers a worry-free application that doesn't require a credit check, so you don't have to worry about your application affecting your credit score.
The Annual Fee: $35, plus a minimum security deposit of $200.
The Rewards: There are no specific rewards with this card, but consider the "rewards" to be your chance to use the card responsibly and qualify for a traditional rewards card in the future.
Why We Like It: When working on rebuilding your credit, it's nice to know that your card comes along with some protection perks. In addition to Citi Identity Theft Solutions, which helps you resolve cases of fraud, the Citi® Secured Mastercard® offers worldwide travel accident insurance, extended warranty purchase protection and $0 liability on unauthorized charges.
The Annual Fee: $0. A minimum security deposit of $200 is required to establish you line of credit.
The Rewards: Again, no traditional rewards with this card, but the fraud resolution with Citi Identity Theft Solutions, worldwide travel accident insurance, extended warranty purchase protection, and $0 liability on unauthorized charges are nice perks, especially for a secured card.
Why We Like It: Another good option for those looking for an immediate answer about approval (without worrying about a denied application hurting your credit score), the Milestone® Unsecured Mastercard® can help you work toward better credit while also providing you with great benefits such as MasterRental insurance, extended warranty coverage and travel assistance benefits.
The Annual Fee: $35-$99 depending on your creditworthiness.
The Rewards: Once again, there are no traditional rewards, but you can build your credit while enjoying the benefits of MasterRental insurance, extended warranty coverages, and travel assistance.
Why We Like It: Instead of paying a refundable deposit to set your line of credit like the other mentioned secured credit cards, the USAA Secured Card® Platinum Visa® lets you determine your credit limit (up to $5,000) by opening a two-year certificate of deposit (CD), with the balance of your CD being your credit limit. The benefit of this is that you can earn variable interest on the balance of the CD, which is a nice way to earn a little cash back while working towards rebuilding your credit.
The Bonus: Earn variable interest on the balance of the CD.
The Annual Fee: $35, plus a minimum security deposit of $250 to establish you line of credit.
The Rewards: Enjoy no foreign transaction fees, collision waiver damage protection and identify theft resolution services in addition to that interest accruing on your security deposit. Not bad for a card designed primarily to help you build/rebuild your credit.