Credit file repair takes place naturally over time, but the credit rebuilding process can be accelerated with a guaranteed unsecured credit card. Any adverse credit will normally stay on a credit report for a period of 7 years. It can be as long as 10 years in the case of chapter 7 bankruptcy. Whilst a better credit score is an added bonus, it is often essential to have a card to reserve or pay for goods and services. For example, to book a hotel room or repair the car at a garage. Poor credit cards work in the same way as their mainstream equivalent, they simply have less favorable terms.

Common Features of Unsecured Credit Cards for Bad Credit

  • A low credit limit of $250 that is subject to a review after a period of 6 months. This means that it is only really appropriate for paying for groceries, gas, books and more affordable items.
  • High initial charges reduce the amount of available credit. It is advisable to pay these off before using the card as they tend to take up about 50% of the available limit.
  • Lenders report to credit reference agencies each month. They advise whether the payment has been made on-time or not which will result in a higher or lower credit score.
  • The functionality is identical to a mainstream card. It is virtually impossible to distinguish between a credit card for bad credit and a conventional card.

Fixing Bad Credit with Guaranteed Unsecured Credit Cards

A poor credit rating card helps with credit file repair because lenders report to the three major credit reference agencies - Experian, Equifax and TransUnion - at month end. A succession of punctual repayments will lead to a slightly better credit score with each passing month. Take on too much debt or fall behind with the monthly repayments and it will result in a lower credit rating. If this happens, it will normally be necessary to start to fix credit problems from scratch.