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How to Use a Bad Credit Credit Card to Regain Good Credit

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By: anonymous
on 26th Feb,2014

A credit card for bad credit can be the perfect tool to boost your credit score. The most important thing is for you to pay your full balance on time.
How to Use a Bad Credit Credit Card to Regain Good Credit


A credit card for bad credit can be the perfect tool to boost your credit score.  Whether you currently have a poor credit score or if you have no credit history, remember the following advice on how to use a bad credit credit card to your advantage:

Be conscious about due dates.  Are you aware of your payment due date?  Paying on time is very important if you want to rebuild bad credit.  Since your FICO score is primarily based on payment history, you can boost your credit score by as much as 35% if you can promptly submit monthly payments to all your creditors.

Stick to your credit limit.  It doesn't matter whether your bad credit credit card offers a low rate or 0% APR for the next six months.  If you exceed or max out your limit, you will be inflicting serious damage to your credit score.  30% of your FICO score is based on credit utilization so if you can keep your monthly charges minimal, you will be able to improve your score more quickly.  In fact, financial advisors recommend not spending more than 30% of your available credit.

Pay your credit card balance online.  Some issuers offer incentives for cardholders who choose to pay their credit card bills online because it helps the company to process payments more quickly and minimize the use of resources which are necessary in processing traditional payments.  Paying online is also a great way to beat a deadline during times when you have to.

Use your card regularly.  Be sure to use your bad credit credit card for payment at least once a month to boost your credit score.  You do not need to use your card for large purchases. The most important thing is for you to pay your full balance on time.

Get an upgrade.  Some bad credit credit card issuers will automatically upgrade your account if you can show consistent payment for 12 consecutive months.  You should be aware of your issuer's policy on upgrades before your choose your credit card. 

If it has been a year since you acquired your bad credit credit card and you know that you have a good payment record, call up your issuer and request for an upgrade immediately. Switching to an unsecured credit card account will give you the chance to enjoy lower interest rate, higher credit limit, and other privileges that are not offered to subprime cardholders.

Monitor your progress.  Check your credit report at least twice a year to make sure that your credit card payments are accurately reported to the three major credit bureaus.  If you are looking for a bad credit credit card, make sure that credit reporting service is provided. 

Remember that the only way you can use your bad credit credit card to rebuild your credit score is to have your activities reported to the bureaus.  Some credit cards advertised as bad credit credit cards may not offer this important service so don't forget to check this aspect before signing up that application.

Melanie Mathis is a credit analyst and a writer for 8 years. She has been participating in the programs of http://www.newhorizon.org such as their continuous effort in giving out Free Credit Repair Guide.

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