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You can build up good credit and work on bad credit report repair by using a secured credit card. These cards usually give you a credit line between 50% and 100% of a cash deposit you make. They are perfect for consumers who need to rebuild credit but need help staying within credit limits or consumers who cannot qualify for traditional unsecured credit cards. By using a secured credit card wisely, you can repair bad credit quickly, but you must follow these steps to do it correctly:

Apply for a Secured Credit Card

When you start the application process for a secured credit card, you should know there may be age and income restrictions. Check with the card company to make sure you are eligible to apply. You should also have a clear idea of how much deposit you are required to make and how much of that deposit will be available as your credit limit. It’s also a good idea to find out how much interest your deposit will earn, if any. You may also be charged an APR (annual percentage rate) or interest on any balances you carry past your due date. Make sure you know everything there is to know about your card, and read all the fine print before you begin using it to repair bad credit.

The Top 3 Credit Bureaus

A secured credit card can only help repair bad credit rating if your timely payments are reported to the credit bureaus, including TransUnion, Equifax, and Experian. Make sure your credit card company reports to these agencies as a matter of policy. It’s also worthwhile to check if your credit card is reported as a secured card – if so, your timely payments may not make as big of an impact on your FICO score.

Pay In Full Each Month

Use your secured card to pay off bills or small purchases, making sure to stay under your credit limit. Then pay off the balance in full each month. This strategy will help you stay in control of your debt and will help you build an excellent payment history in your credit report, which will boost your credit score.

Convert to Unsecured Credit

Some secured credit cards allow you to convert to an unsecured credit card after a certain time period. If your credit card company offers that option, make sure to take advantage of it. After making timely payments on a secured card, moving to unsecured credit shows greater financial responsibility, and your credit line may increase. Of course, it is crucial to continue using the card wisely and making regular payments; otherwise you could end up asking, “How can I repair my bad credit?” again in just a few short months.

Source: jenngerl