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If you are one of the millions of people out there who are stuck with bad credit, you could probably use some good news, and that news is that all hope is not lost. The world economy and your local bank still needs you and your spending power, and they are there to help you get back on your feet. There are several options available to those with bad credit, with most of them just a single application at your bank away from coming true. While most of us are familiar with the traditional unsecured credit card, there is a whole other branch on the credit card tree that is made for folks who are trying to establish their credit for the first time, as well as for folks who are trying to rebuild a fractured credit rating.

When you were a teenager, you likely got offers in the mail for secured credit cards. Once you read the fine print, however, you likely ripped up the offer and tossed it in the bin. But now it may be time to rethink a secured credit card. Here is how they work. With a secured credit card, you must secure the line of credit that you are given. This is done by sending the credit card company, or, most likely, your neighborhood bank, the equivalent to what your credit line is. So, let’s say you are offered a secured MasterCard or Visa with a $1,000 limit. To activate the card, you would have to send the card company $1,000 to hold before you would be allowed to use the card. Of course, a secured card is less than ideal since most of us don’t have an extra grand lying around to send off to a credit card company, but if you have been applying for unsecured cards and have been getting turned down, this may be your best chance at reestablishing your credit.

For most folks, a secured credit card is a short term proposition. If you can use a secured card responsibly for year or so, the credit card company that issued you that card will likely upgrade you to an unsecured card or another card company will notice the change in your credit rating and then offer you an unsecured card. If this happens, the smartest thing you can do is to call up the company who you have the secured line of credit through and ask for the line of credit to be changed. If they agree, you’ll get your $1,000 back and a whole new credit card. No one uses secured lines of credit for long periods of time; they are simply a logical and helpful way for people to rebuild bad credit in a responsible way. The same goes for teenagers who have no credit rating at all. Often times it is the parent who secures the card and lets Junior build their credit that way.

While secured credit cards may not be the ideal choice for a long-term credit card, they are a good way to start down the road to establishing or rebuilding your credit.

If you are like millions of Americans, you do not have a perfect credit rating. While most people get by with an average rating, there are still millions more who suffer from poor credit. The mission, of course, is to fix that credit rating as quickly as possible. The problem is that there is no real quick fix to repairing one’s credit, only a slow, methodical process that allows you to undo the damage, bit by bit. Let’s take a look at the basic process everyone can go through to repair a damaged credit rating.

The first step for many is the most difficult. To get your credit rating back on track, you need to seriously cut down on unnecessary spending and begin to pay back your balances on the credit cards you have. That means making more than the minimum payment each and every month. This, of course, is easier said than done, but no other single act can improve your credit score faster than paying down your existing balances.

Second, you need to make sure you pay all of your bills on time. Many people do not realize this, but things like your utility bills, your mortgage and other such bills are also reported to your credit bureau. When you have poor credit, any positive reporting can help you and your credit score recover, so don’t let any important bills lag.

You will notice that your credit is beginning to turn around once you start to get more reasonable credit card offers in the mail. You will notice the interest rate offers on these cards start to drop, from 24-percent, to 20-percent to rates in the teens and even lower! Once you start to receive interest rates in the single digits, it is an excellent sign that you have healthy credit once again.

There are also a few things that you need to watch out for as you start to rebuild your credit. It is human nature to go out and cancel some of the high interest rate cards that you have in your wallet since they were the ones most responsible for getting you into this mess in the first place. But it is important to take a deep breath and simply put the card away someplace where you won’t use it. The reason is the fact that once you cancel a line of credit, even one with poor terms, it negatively affects your overall credit score. Why? Because suddenly your debt ratio, meaning the percent of your available credit that is used up, skyrockets. The only time something like this is a good idea is if the terms of that card include an outrageous annual fee that you are having trouble paying or any other ridiculous fee structure that you can’t pay. Otherwise, leave the card alone, pay it off and then call the card company back when your credit is healthier and ask for a change in terms. Most card companies would rather keep you as a customer than lose you.

It is a situation we’ve all found ourselves in at one time or another. It is the end of the month and the confluence of bills is more than we can handle. We have to pay our rent or our mortgage, that’s always first on the priority list. Next come utilities since we can’t function without lights or water. That almost always leaves the poor, disrespected credit card as the last option to pay. But not paying your credit cards on time can dramatically affect your current financial standing. Let’s take a look at how late credit card payments can destroy your credit and lead to even more financial problems down the road.

The problem with late credit card payments is the fact that credit cards are connected to your credit report. A credit report is a document that lists your current credit score and all of the credit problems you’ve had over the past 10 years. Why does this matter? Because when you apply for credit, including a credit card, a car loan or a mortgage, the banks that offer you the credit take your credit score very seriously. And nothing negatively affects your credit score like late payments on your current cards. But having a negative report sent to your credit bureau is only the beginning of your problems if you miss credit card payments or are late on them.

Many cards act like predators just waiting to take advantage of your bad luck. While most cards do not behave this way, many of them have built in boosts in interest rates that take effect even if you are only one day late for your payment. Rates can spike as high as 24-percent or higher depending on the laws in your particular area. Even if your interest rate is in the single digits before, if your payment is so much as a single day late, your card company will likely raise your rate as high as they can.

It doesn’t take a rocket scientist to realize what this does to the viability of your card. If you were having trouble making payments before, having an interest rate that is now twice what it was before isn’t going to help you any. And if you started out with a sub prime card or a card with less than ideal rates to start with, you may be facing even more problems. Some cards have excessive fine print that outlines what happens when you miss payments, and some cards have incremental penalties that take affect with each additional late payment. Some cards will increase an annual fee and some might start one out of thin air.

If you aren’t sweating bullets by now, you might want to go back and read the above paragraphs. The point of all this fear mongering is to help each and every credit card holder realize that missing card payments or even being late on them is never, ever a good idea, and that your credit card payments should never be the last priority when it comes to paying your bills. The consequences are too dire if you do.

If you were to ask 100 people on the street what they know about their credit, you would likely get a lot of blank stares. Most people know enough to say that they have either “good” credit or “bad” credit, but they don’t know much more than that. The overwhelming majority of people not only don’t know what their actual credit score is, but they don’t know how it is calculated either. So, let’s take a look at how you can bring your bad credit score up and how you can watch your score for free!

There are several major credit bureaus that track the credit score of pretty much every adult in the United States. You might have to call all three or four of the major companies to find out which one has your score, but once you do, you can request a free credit report directly from your credit bureau once per year. It is a little known perk that every American has the right to, but almost no one actually does. Why is it important to know your credit score? Simple. It lets you know where you stand in the eyes of banks, credit card companies and other groups who might be ready to offer you credit. If you are thinking about applying for a credit card, getting a home loan or buying a car, it is very important that you know what your score is and how it will affect you.

Another important reason for keeping an eye on your credit score is the fact that often times credit bureaus make mistakes that can negatively affect your real credit score. Items might get reported to your credit score that are inaccurate or even completely false. No one is going to check your report for you to make sure it is accurate, so that means you have to do it yourself. By catching an inaccurate entry on your credit report, you can improve your credit score instantly, and that can mean the difference between a disappointing home loan or credit card and a good one!

There are also other ways you can help to improve your credit by ordering your one free annual credit report. Sometimes, things get left on your credit report longer than they should. If you have ever declared bankruptcy, there is a limited amount of time that it can appear on your credit score, but again, there isn’t anyone else out there looking out for the accuracy of your credit score, so it is up to you to make sure that it is 100 percent accurate.

Finally, by checking your annual credit report, you can learn what a good credit score is and what a bad score is, and how far you have to go until you reach the promise land. In almost all cases, a score of 740 is considered “good.” When you order your credit report, you will receive a basic primer on what a good score is and easy ways you can achieve a respectable credit score.

By now, we’ve all heard the horror stories coming from the sub prime mortgage crisis that has hit the USA and other parts of the world. Even people with little to no knowledge of economics now know far too much about how the economy is doing and how the sub prime scandal played its part. But there is a whole other side to sub prime lending that many people don’t know about. If you have poor credit and you are looking to rebuild it, you will likely be prescribed the hair of the dog that just bit you. The main problem, obviously, is not getting bit all over again.

So, you’ve found yourself drowning in credit card debt but you’ve made the adult choice not to declare bankruptcy and to pay off your balances a bit at a time. But what are you and your damaged credit rating suppose to do until then? The answer might actually be getting an additional credit card. The difference isthat this time, you are going to use it wisely.

There are a whole slew of credit card companies out there that cater to the sub prime (sub prime essentially means bad credit) market. Card companies like Orchard Park, among others, deal almost exclusively with sub prime lenders. Now, these credit cards are nothing to write home about. In fact, most of them really stink. But, if you have bad credit and more traditional credit card companies continue to turn you down, you need a credit card to help reestablish your credit rating and these cards are the next best thing to a secured line of credit. So, what makes these cards so undesirable? Let’s take a look.

If you find yourself in need of a sub prime credit card, be prepared to get terms that aren’t exactly ideal. Many of these cards have an annual fee, but not all of them. Some of them may also have additional fees on top of the annual fee. They will likely have an interest rate over 20-percent, sometimes as high as 24 percent, although the limits vary by state. If you agree to get one of these cards, it is extremely important that you don’t ever miss a payment or are late with a payment. Many of these cards will ratchet up your interest rate to the maximum allowed under law, so it is extremely important that you never miss a payment, even if you have to send in the minimum. So, if you are sitting there asking yourself if it is really worth it. Unfortunately, the answer is yes. If you can get one of these cards and use it responsibly for a period of time (about a year), your chances of getting a more reasonable card are significantly higher. Remember, once you get a better card, don’t cancel this one without trying to get the card company to change their terms. Once you cancel the card, it will negatively affect your credit rating.