Using Credit Cards to Improve your Score

So, you've made a few mistakes in the past. No one's perfect, right? But, if you made those mistakes on your credit, it seems that everyone looks at it and judges you by it. For instance, when you decide that you want to get a credit card, you may start noticing rejections to your applications. Many people think they should just start sending in as many applications as they can to finally get one approved. Well, that's simple the wrong thing to do. A better idea would be to just step back, take a deep breath or two, and then proceed prudently and carefully.

If your credit is already less than perfect, the only thing that filling out a bunch of credit card applications is going to do is make matters worse. Every time a potential new creditor looks at your credit report it shows up as an inquiry on subsequent reports. Too many inquiries in a short span of time will cause your credit score to suffer. So, if you apply with every credit card company under the sun, you're going to be hit with a number of dings that will make your score drop lower and lower.

Before you apply for a credit card, make sure the rest of your financial house is in order. If you have outstanding debt or collections agents calling, do your best to sort that all out before submitting any more applications. Also, be gainfully employed. Most credit card companies (and all potential creditors, for that matter) want to have assurances that you have a way to pay them back. You'll need to prove you have a job and will be making money so that you can repay any debts you incur. Nevertheless, it's important to understand that with bad credit your options for credit cards are going to be limited. The cards that you'll be able to get are not the ones you really want. They're going carry high interest rates and low credit limits. But, they're a start.

You should think of these bad-credit credit cards as a way to prove yourself worthy of better credit cards down the road. They're the first stepping-stone on the path to regaining your good credit name. Get one of these cards and use it sparingly and wisely. You'll want to make some regular purchases, but be sure to pay them off as soon as you get the monthly bill so you're not hit with the high interest charges. Also, never ever miss a payment. Ever! This is not only important to rebuilding your credit image, but missing a payment will also trigger even higher future interest rates on most cards. Besides, a missed payment will show up on your credit report as just another reason for future creditors to think they can't trust you to pay your bills.

The longer you use your card for responsible purchases and payments, the better it will look on your credit report, and you'll soon notice your credit score starting to rebound. Eventually you'll be able to move up to credit cards that offer better interest rates, higher limits and even a few perks.

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