Tips On Rebuilding Credit - Using Unsecured And Secured Credit Cards
It is estimated that approximately 33 millions Americans struggle with some form of bad credit. This is about 10% of the entire US population.
One's credit history is becoming increasing important. For people struggling with bad credit, sometimes, it feels like the number is tattooed on your forehead, especially, if you've made an attempt to secure a home loan, auto loan or personal loan.
The fact is that creditors are not eager to extend a line of credit to you, if your FICO score is not above the 650 range. There are a number of reasons why your FICO score may be low - bankruptcy, too much debt, not paying your bills on time, etc.
The good news is that your credit score can be improved. The key to increasing your credit score is to maintain a line of credit and prove to your creditors that you are capable of paying your debts on time and not maxing out your credit line. These four simple steps will help you improve your credit score:
1. Get a copy of your credit report. Take advantage of the free government credit report from each of the National Consumer Credit Bureaus: Equifax, TransUnion and Equifax. This will help you to understand your starting point. It will answer the question - "how bad is my credit?"
2. Apply for a line of credit. You can apply for an unsecured credit card or a secured credit card (this is sometimes referred to as a "prepaid" credit card). Go to the website below under "Credit Cards for Bad Credit" for additional resources.
3. Once you have the card, do not max out your credit card. Try not to exceed 70% of the credit card's limit. For example, if the credit card limit is $1000, you should only charge up to $700.
4. Always, pay your bills on time. This accounts for 35% of your FICO score. It's the most important factor in proving your credit-worthiness to your creditors.
Practicing these four simply principles will help you to increase your credit score in the coming months.
About the Author: Delia Galley writes about debt management and credit counseling. For resources on credit repair visit http://www.poorcreditgenie.com. The site offers information on how to rebuild your credit, find "bad credit" credit cards and access bad credit auto loans, home loans, home improvement loans, personal loans and debt consoildation loans.
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