Credit card companies look for the credibility of borrowers before offering them a credit card. A credit score is one metric that credit card companies take quite seriously in assessing the credibility of a borrower.
A credit score is often a rating in the range 300-850 given to individuals indicating how trustworthy they are in repaying on time. A credit score above 700 is considered excellent and the person with an excellent credit score can easily get an unsecured credit card with maximum perks. However, a credit score below 600 is considered low or bad credit score and people with a bad credit score will find it difficult to gain a credit card.
If you are struggling to rebuild your bad credit score, then today we are here with an article that will help you improve your credit score if you have a bad credit score.
1. Get a Secured Credit Card :
If you have a bad credit score, the best way to get a credit card is to apply for a secured credit card. A secured credit card is more like a debit card, where you have to recharge your account with money before you can use the secured credit card. This basically means you are not offered any credits by the lender but you just use the amount you added to your account.
Also, as secured credit cards are credit cards, it will improve your credit score and as you will not be incurring any credits, your credit score will only improve positively. Once your credit score builds up, you can get credit from the same lender or apply for a new unsecured credit card as well. If you are interested in getting a secured credit, find out more here.
2. Manage Your Current Repayments :
Until now if you have missed repayment dates, then if you try and keep up with your repayment dates from now on that will also have a very positive impact on your credit score. Even if you miss your repayment date by a single day, it will have a negative impact on your credit score.
Always set up payment reminders so that you do not miss your repayment deadlines and also take help from credit counselors to manage your income in order to correctly manage your repayments back to the lender.
3. Manage Your Credit Card Expense :
Make sure that you do not add extra expense on your credit card. Even if you cannot stop using your credit card, be sure that the expense that you are adding on your credit card is bearable by you. If you are about to make some huge purchases using your credit card, wait until you comfortably make your existing repayments and your credit score improves.
Managing credit expense is really important to rebuild your credit score as most of the lenders update the report on your credits to credit agencies after each billing cycle and not after you make the repayments. If you have at least 20-25 percent of credit remaining unused after each billing, it will help improve your credit score.
Final Words :
Credit reporting agencies update your credit score multiple times a year. So it is important to request a credit report at least 3 times a year. Once you get your credit report, analyze the report to see if all of your credit card repayments have been updated and if any false billings have been included.
In case of any discrepancies, make sure to raise a dispute and make the credit agency aware that there are some issues in your credit report.
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