By David
Having poor credit is no laughing matter, as it usually turns basic activities like signing up for cable and other similar actions into difficult tasks. To make things worse, once a person’s credit score plummets, securing lines of credit becomes a lot more difficult. Also, debit cards don’t add to your credit score, leaving many left puzzled on how to rebuild their credit history. Fortunately, there are a few tricks that can be used to salvage your credit rating and get you back in the favorable graces of lending institutions.
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Secured credit cards
If you are constantly getting rejected every time you apply for a credit line, you might want to consider going for a secured credit card. Secured credit cards work a bit like debit cards, meaning you have to deposit funds into the account before you start swiping. However, while debit cards don’t add to your credit score, secured cards do, so every on-time payment you make will be reflected on your credit score. If your credit score is too low to get you approved for a credit card, a secured card is your next best option.
Managing balances properly
Just because you have a credit line — secured or unsecured — doesn’t mean you should pile up all your bills on it, a mistake many make especially when using secured credit lines. While secured cards require you to deposit funds before spending, they still work like unsecured credit cards. They report your activities to the credit bureaus just like their unsecured counterparts, so little things like using more than 30 percent of your available credit or failing to pay off the balance on your account in full every month can have negative repercussions on your credit file.
Do not forget your debit cards
While debit cards don’t add to your credit score, there no reason to stop using them. Unlike credit cards, the banks do not report your debit card spending to anyone, so there are no strict set of rules you need to follow in order to remain in good standing. Besides, every transaction you make on your debit card instead of your credit card reduces the chances of your falling into debt — which obviously has a negative effect on your credit score. So in a way, debit cards can actually help you improve your credit score indirectly.
Staying on top of your finances
Arguably the most important tip you can get, as it is virtually impossible to build and keep a good credit rating if you are irresponsible with your finances. Learn to follow a budget, pay your bills on time, and make sure you go through the fine prints of contracts you enter. The whole credit rating system is designed to rewards responsible members of society who manage their finances properly, and once you become one, your score will certainly improve.
With the above tips, you should not have any problems getting your credit score where you want it to be.
Click here to use our free credit card comparison tool to find the best credit card offers for you
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