Using a card to improve bad credit

You can actually use a credit card to rebuild your bad credit.

Next to medical bills and lawsuits, credit cards are among the leading drivers that result in bad credit. Hence, it comes as a surprise to know that credit cards can indeed help with debt accumulation.

According to Beverly Harzog, who is a well regarded expert with credit cards, the plastic may be used to rebuild credit history. As long as one can keep his or her spending habits in control, then a credit card is one of the best tools that one can to get back in the good graces of credit companies. The following strategies can help:

Get a secured card

Harzog recommends consumers with bad credit to get back in the credit game using a secured credit card. With this, consumers can make a deposit to a bank account and this 'secures' the card. The company who issues the card will issue you one, which you can now make use of. Also, it is best to get a secured credit card that reports payments to the credit bureau.

Don't apply for too much

Avoid going into panic mode when you kick start your campaign towards good credit. Consumers tell themselves that they need several new credit cards to make a point about being a good risk. However, this approach usually backfires as they usually don’t have a good enough credit standing to be approved for all the cards they’ve been applying for.

It was also found that credit card application affects credit score as well.

Always pay on time

Creditors and lenders alike love consumers who make timely credit card payments every month. So do credit agencies. By paying your bill timely and regularly, you are seen as a responsible individual, which helps boost your credit standing.

Payment history counts

According to Harzog, this counts for 35% of the entire credit rating. Furthermore, she advises that consumers maintain unused credit cards. Closing a card makes an individual lose the available credit that is linked to the card, which impacts his or her credit utilization and may hurt the overall score.