Rebuilding Your Credit with Credit Cards

When your credit has taken a hit, finding a way to rebuild your FICO score can seem overwhelming. Luckily, there are some easy ways you can begin rebuilding your credit as early as today.  

Consider a Secured Card

A secured credit card is different from a traditional credit card. With the secured card, you make a cash deposit. The card allows you to access the amount that you deposited. This way, you do not have to worry about going over budget.

Pay Your Bills with a Credit Card

One easy solution for rebuilding credit with a credit card is to use the card for your routine purchases. Each time you need fuel for your car or groceries, you could use the secured card. Your payment history will help to give your credit score a boost.

Watch Your Credit Usage

When rebuilding your FICO score, another important factor is how much of your credit you are using at any given time. If your card has a limit of $1,000, try using only 30 percent or less of the available credit. The credit reporting bureaus use your credit utilization ratio when calculating your score. If you have used most or all of your available credit, lenders see you as a higher risk, leading to fewer card offers and higher interest rates on the offers you do get.

Build History

Keep in mind that the older your credit accounts are, the longer your history is. Maintaining the same accounts and keeping them in good standing will help to rebuild your credit. The mix of account types that you have is also important. For example, general accounts from big lenders will help build your score more than specialty accounts such as store credit cards or personal loans from small lenders.

If you’re looking for a card to help you rebuild your credit score, you can check out this card, which comes with a bunch of great member benefits to help boost your score in no time.