Connect with us

Hi, what are you looking for?

How to Use Credit Cards to Repair Your Credit Score
How to Use Credit Cards to Repair Your Credit Score


How to Use Credit Cards to Repair Your Credit Score

The information contained in your credit report serves as the foundation for your credit score. Multiple factors go into a credit score, meaning your score can fluctuate over time. That’s actually great news because it means you needn’t be stuck with a low score. There are actions you can take to raise your score, and it can happen faster than you may expect.

Your credit score reflects your past financial activities. It’s used by banks and other lenders to predict your future financial responsibility. The higher your score, the more likely they are to consider you a good risk for future loans and credit cards. The lower your score, the more risk they will associate with your application for financial products.

It’s true that credit card debt is one of the biggest problems for U.S. adults today, but that’s not the full story. Credit cards don’t have to lead you into debt. They can help you build your credit score when you use them responsibly. They can even rebuild your score if it has taken a hit from irresponsible spending habits in the past.

Different Cards for Different Consumers

There are credit cards everywhere today. You can apply for one at most banks and credit unions. Department stores offer store and credit cards at the register. And a growing number are offered online from banks across the country.

The first step to using these cards wisely is to understand the different types available. This article will help you understand the credit cards you come across in your search. Responsible use starts with only applying for cards that will help you reach financial goals.

Secured Credit Cards

A secured credit card is designed to help consumers repair bad credit. They require an initial funds transfer or deposit, and that amount becomes your spending limit. Because the issuer can use your money to recoup any outstanding balance if you stop paying your bill, they assume less risk. As a result, many secured cards require no credit check to get started.

Secured credit cards are a great way to prove to a bank that you’re a responsible consumer. As you make on-time payments, the card service reports that activity to the credit bureaus. Those payment reports help you build a history of on-time payments. That in turn improves your credit score.

Many secured cards can later be transitioned into traditional, unsecured credit cards. Lenders are also more likely to approve a later application for an unsecured card if you prove yourself with a secured card first.

Unsecured Credit Cards

If you’re issued a credit card without providing any money beforehand, it’s unsecured. The lender assumes all risk if you default on payments, so higher credit scores are required. Everything works like an unsecured card except the lender provides the full spending limit upfront.

There are many types of unsecured cards available today. Rewards cards or miles cards are quite popular. You may need to build your credit up with a secured card before you qualify for the best unsecured cards.

How to Use Credit Cards to Improve Your Credit Score

With that understanding of the different types of credit cards available, it’s time to explain how to use them for raising your credit score. The focus here is on using nothing more than credit cards you already have or are qualified to receive.

Start Building Credit With a Secured Credit Card

One of the easiest options is to sign up for a secured credit card. Cards that don’t check your credit upon application are best. Each time a lender checks your credit score, it counts as a hard inquiry. Too many hard inquiries in a short period of time may lower your credit score temporarily. You can avoid that with a reputable secured card that doesn’t check your credit for approval.

Keep in mind that you will want to keep your first credit card open as long as possible. Canceling it will shorten your length of credit history, which harms your score. If this is your first card, choose wisely.

Keep Your Overall Credit Usage Below 30%

Once you’ve established credit, spend frugally. Your outstanding balance on all accounts is your credit utilization rate. If it gets above 30%, it’s likely to impact your credit score negatively.

Determine your maximum spending limit by adding the maximum limit on all your cards together. Multiply that amount by .30 and try to keep your combined balance below that figure.

You may keep a low balance on all cards or designate one card for most of your spending. Determine when each card’s balance is reported to the credit bureaus. Make sure your payments are made before that date to minimize the reported balances.

Use Autopay

Credit cards will destroy your credit if you don’t make payments on time every month. You’ll also accumulate expensive late fees. If you struggle with timely payments, set your credit cards up for automatic bank drafts. It’s free and will keep your cards in good standing.

Become an Authorized User

In addition to securing your own credit, you can take advantage of someone else’s established credit by becoming an authorized user on their card. The lender will issue a second credit card with your name on it, but the primary user will still be responsible for the account.

As the primary user charges on the card and makes payments, it will report to their credit report and yours. You’ll receive all the benefits of having a credit card without the responsibility of managing the card’s balance.

Continue Building Credit With Unsecured Credit Cards

As your credit score improves, you will likely qualify for an unsecured credit card. Or, after you use your secured credit card responsibly for a specified period, it may be converted to an unsecured card.

Once you qualify for a traditional, unsecured card, keep your secured card active if it was your first card ever. As noted, credit history length is a factor in your score, so hanging onto your oldest account is advantageous. Just move your spending focus to unsecured cards with lower interest rates and more perks like cash back rewards.

It may seem paradoxical that credit card use — often depicted as irresponsible spending — is one key to achieving good financial standing. But it’s true, provided you use your cards wisely. Whatever you do, keep making those payments on time and keep your utilization rate as low as possible.

You May Also Like

Digital Logic Circuits

Excess-3 to BCD converter In this post on code conversions, we are going to see Excess-3 to BCD converter using k map technique.  K-map If you...

Digital Logic Circuits

BCD to Excess-3 converter In this post on a code converter, we are going to see BCD to Excess-3 converter using the k-mapping technique....

Digital Logic Circuits

Laws Of Boolean Algebra The Laws Of Boolean Algebra is provided here. OR A + 0 = A A + A’ = 1 A...



When buying CBD vape oil, make sure to look for products made from the purest form of the plant. CBD vape oil is extracted...


Bitcoin was the first cryptocurrency to be developed and released into the market. It was also the first product to be used in blockchain...


What is a CBD salve? A salve is an ointment with or without CBD to help or heal your skin. It could also be...


Hardwood floors are nothing but gorgeous. They’re easy to clean, low maintenance, and they last for a really, really long time. Most people buying...

Tech Updates

You can search millions of PDF editors for your daily usage, but not every tool comprises all the required properties and tools. To eradicate...


The BNB Meaning BNB meaning crypto (digital money) that allows people to send money via the internet. You may use crypto to pay for...