4 Tips for Getting & Using a Credit Card Responsibly to Build Your Credit


Having a poor credit score often makes obtaining a new line of credit difficult. Yet oddly enough, landing a new line of credit can actually help improve your credit score.

It is very important to note that the only way a new credit card can help your credit score is when it is used responsibly. If you do not have a credit card, you might be missing out on an opportunity to raise your credit score. Having a credit card can help build your credit history and, therefore, your credit score.

The first step is finding the right card for your credit profile. Many credit cards for bad credit allow users to rebuild their credit by reporting to all three credit bureaus – Equifax, Experian and TransUnion. Avoid applying for credit cards you will most likely not qualify for, as each application will induce a credit inquiry. A credit inquiry is marked on your credit report each time a lender evaluates your credit profile to determine creditworthiness, and can lower your score a few points each time an inquiry occurs.

Here is a list of unsecured credit cards for bad credit that can help rebuild or re-establish your credit history, so long as you take the following actions:

  1. Pay your bill on time. This is in fact the most important component of having and using a credit card, because on-time payments are the most heavily weighted factor in calculating your credit score. On-time payments account for 35% of your FICO credit score. Set up payment reminders to help ensure you never make a late payment. This can be done on your mobile device or even through your online banking portal.
  2. Keep your credit-utilization ratio low. This is the next best thing you can do aside from paying on time to keep your account in good standing. Your credit utilization is your balance compared to your credit limit, and it is recommended to keep your balance at or below 30 percent of your credit limit. For example, a credit card with a $500 limit should have a balance at or below $150. If your balance is higher, your credit score can be negatively impacted, and maxing out your credit card can be very damaging to your credit score.
  3. Pay more than the minimum balance. Paying the minimum balance every so often is fine, as long as the payment is not late. However, you will be seen as a more responsible borrower if you pay as much as you can toward your balance each month. This will also help lower your balance faster, improving your credit utilization ratio. If you can pay the full amount each month, you will avoid paying any interest altogether, which is the best possible way to use a credit card.
  4. Be patient. Responsible use of a new credit card will help long term, but repairing damaged credit is a marathon, not a race. The only way to repair your credit relatively quickly is through a reputable credit repair service such as Lexington Law. Past clients of Lexington Law have seen an average of 10.2 negative items removed within four months.*

Once you’re approved for the right card to help you re-establish your credit, follow these guidelines and you’ll be on the path to an improved credit profile and score.

This post was published on behalf of BadCredit.org.

* The number of items removed represents the combined removals of all clients for all three credit bureaus that occur during the client’s representation. For example, if a single questionable negative item is removed from all three reports, it is counted as three separate removals. Past average clients have seen 10.2 removals within four months. You should not expect to see the same result and it is not guaranteed.