Have you had credit problems in the past?

If so, you might be finding it hard to get a new credit card.  Or, you may be wondering how you go about improving your credit rating in order that you may be able to get a mortgage, loan or credit card in the future?

While it can be a slow process, credit building cards are a great option to consider.  Even with poor credit, you can prove that you can manage borrowing responsibly.  This will help you to repair your credit rating at the same time as you benefit from a credit card facility.

What is a credit builder card?

Due to the much publicised recent problems with so-called ‘sub-prime’ lending, companies have been much more reluctant to lend to people with poor credit.  This may be a previous bankruptcy or repossession, but poor credit in the eyes of banks can also include missed or late loan or credit card payments.

Credit building cards are designed for people who have experienced credit problems in the past.  They have a lower credit limit and will help you prove that you can manage your card and your spending responsibly.

How credit building cards can help you

If you use a credit builder card and pay off the balance every month, on time, it helps you to demonstrate to potential lenders that you are capable of looking after your money.  You can show that you are a reliable payer and that you can deal with credit in a responsible fashion.

Be careful not to maintain a balance on your card for long, however.  As lenders are taking more of a risk granting a card to you if you have experienced poor credit in the past, they will also charge a higher interest rate on any balance you don’t repay.