When your credit has been damaged by poor spending habits or because you experienced a financial emergency that affected your ability to keep up with expenses, rebuilding can seem like a nightmare. Many creditors are unwilling to change negative reports, and a late payment history can count against you for a number of years before your credit score starts to move upward. Unfortunately, the best you can do in these cases is often to create a pattern of positive payments to help overshadow the negative.
There are a number of ways that you can help to fix credit score problems, but not all are created equal. Once your score has been lowered, credit card companies are likely to offer only cards with minimal limits and exorbitant interest rates and fees. A single late payment or a fee that puts you over the limit on cards like this can send you spiraling into even greater credit trouble. Because of this, people who are looking to fix credit report issues are likely better off considering secured credit cards. These cards use cash, bank accounts, or other collateral to secure the amount of the card.
When you use secured credit cards, you can rest assured that the money is there to repay the card if needed. These cards tend to offer considerably lower interest rates than traditional credit cards and are an excellent tool for rebuilding credit. They can be used anywhere that major credit cards are accepted, and the card owners report to the major credit bureaus. This makes it easy and affordable to help rebuild your credit and to stop rejections made because of bad credit decisions that you may have made in the past.
When using secured credit cards, it is important to follow the same rules that you would when rebuilding credit with a traditional card. If you are trying to improve credit scores, you need to keep your balance low and ensure that you are always making payments on time. Creditors look at how long a line of credit has been open as well as the average balance that you maintain. Keeping the card paid and using the same card for a long period of time can help you rebuild credit much more quickly. Getting past credit issues can be frustrating, but with a secured card and positive spending habits, it can be done.