Raising your credit score involves several steps. You need to get new credit and prove that you can pay your bills on time. However, qualifying for a new plastic can be difficult if your FICO score is less than 660 points. Nowadays more than 70 million people in the U.S. find themselves in this category. The solution for them is subprime credit cards. Although these plastics come with higher borrowing costs, they really work. A recent research conducted by Citizens for Equal Access to Credit showed that a large percentage of subprime cardholders improved their FICO score during 2 years!

Some lenders describe credit cards as "prime" or "subprime." While there are no exact standards, you can easily tell one group from the other. Prime credit cards mean deals for good credit. Lenders reward smart financial behavior, so such customers are eligible for top deals! Prime credit cards come with a low interest rate, a high spending limit, a low or no annual fee, possible rewards and low-rate balance transfer offers.

Subprime credit cards are issued to people with limited score. If you had bankruptcies or defaults in the past, then they are a good choice for you. But keep in mind that subprime offers typically carry higher interest rates, extra fees and a lower spending limit.

There is nothing wrong or bad about subprime credit cards. If they didn't exist, then it would be much more difficult to establish or repair your FICO score. Some people may be disappointed with the higher interest charges and fees, but those features are the fair price for lending money. People with poor rating are considered to present a higher risk of default, so additional charges are designed to compensate for that. In your financial situation the choice is between an expensive card or no card at all.

Subprime credit cards are an effective way to rebuild FICO score for a lot of people. They give you a "second chance" while the negative record of payments is still visible on your credit report. But do they really help? The answer is yes. Based on a recent research of 360,000 subprime credit cardholders, at least 35% of them repaired their rating in two years. Over 60% increased their score by 40 or more points and qualified for better offers.

Improving your FICO score requires work and some tolerance for a higher interest rate and additional fees. Imagine that all credit card deals are arranged by the type of FICO score on a ladder. The bottom rung is subprime applications, the top rung - excellent credit offers. Want to go up? You can build a solid FICO score if you show that you can manage your money sensibly. The ladder-climbing process takes your time and efforts, but the aim is worth it. When you establish a positive payment history, you can apply for a new beneficial offer or ask your current lender for better terms.