Credit Repair Credit Cards: Learn to Rebuild Your Credit

Trashing your credit score is so much easier than building a solid credit rating.

It’s no wonder so many people seek out credit repair credit cards.

Whether you’re newly divorced and never had a chance to build your own credit, or have experienced financial difficulties that led to foreclosure or late payments, bad credit scores can haunt you for years.

When used wisely, credit repair credit cards get you on the road to that magical 620 (or higher) score.

This enables you to purchase bigger ticket items like a home or a vehicle in the future.

Credit Repair Credit Cards: Will It Help Build Your Credit Score?

The Two Main Types of Credit Cards

Credit cards fall into two broad categories —  secured and unsecured.

For people who have a low credit score, a secured credit card is often easier to get and therefore a good tool to have in your credit-rebuilding arsenal.

Of course, if you think you have a good chance of getting an unsecured credit card, it’s worth the time to go through the pre-qualification process.

Remember, an official application for an unsecured credit card can negatively impact your credit score further upon disapproval.

Going through pre-qualification first is a safer move.

The advantages of unsecured cards include lower interest rates and benefits such as cash back rewards and lower fees.

What’s attractive about secured credit cards for people with poor credit is that virtually anyone can get one.

However, in order to do so, you will need to send the credit card holder a security deposit.

The amount of that security deposit will be your initial credit line.

This initial cash outlay is an obvious disadvantage.

It is a way for you to purchase things that require credit cards and eventually achieve a higher credit limit in the future, and of course a better credit rating in general.

How to Effectively Use Your Credit Repair Credit Cards?

The fine print of your credit cards will let you know which credit reporting agencies they use.

If you have more than one option in your wallet, always use the card that reports to the most agencies.

You’ll build your credit faster through the process.

The quickest way to ensure a better credit rating by using credit repair credit cards is to pay the bills by their due date and to pay more than the minimum specified amount on the bill each time.

When it comes to getting the bill paid on time, it’s helpful to get to know how quickly the credit card company processes payments after receiving them.

You may think you’re sending in the bill or arranging an e-payment on time but instead, you’re getting hammered with late fees and lowered scores.

Keep in mind that your credit rating will rise quickly if you make it a priority to never carry a balance of 30 percent of your card’s total credit limit from one month to the next.

In other words, if you come home from vacation having spent almost your entire $2,500 credit limit — and can’t pay the entire bill in one month — try to pay at least 70% of it.

That way, if the remaining balance is $750 or lower, you’ve kept what’s known as your “credit utilization” below 30%- which is a smart way to rebuild your credit.

Additional Tips

Don’t make the mistake of confusing secured credit cards with prepaid credit cards.

While both require an initial cash outlay, purchasing a prepaid card is literally just exchanging cash for plastic.

A prepaid card may be convenient, but it will not help you rebuild credit and is not a credit repair credit card.

Keep in mind that credit repair credit cards should not be mistaken for non-profit credit repair agencies.

They are not-for-profit companies which correct errors in your credit report and consult with you about rapid credit repair.

Ask Shaneequa shares how you can build your credit while using a secured credit card via this video:

Certainly using a new credit card wisely will slowly rebuild up your credit rating.

But if you have an immediate need to boost that score, or a truly abysmal credit rating, credit repair credit cards alone may not do the trick.

Are you a secured credit card holder? How did it affect your credit score? Share your experience in our comments section below.

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