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Credit Cards With Bad Credit – How To Use A Credit Card To Improve Your Credit Score

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If you are thinking about getting a loan with bad credit, then although this is possible as explained in our article on short-term loans with bad credit it can be difficult. Even if you are able to get a loan you will normally find that it will give you a higher interest rate, you will probably only be able to borrow over a shorter period and it will of course affect the amount that you can borrow as well.

One of the ways that you can start rebuilding your credit score is using credit cards. On the face of it, this sounds counterintuitive. However, as long as you are using them in the correct manner it means that you are showing lenders and the banks that you are able to pay back money that you borrow.

We have some recommendations for you in this article and it will help you if you are looking for a very fast way that will allow you to build your credit score. You can also back this up with an Experian account, this will allow you to see how your efforts are affecting your credit score. Bear in mind that if you do go for an Experian account, the score that you get will not guarantee that you are accepted for loans as it is a score that they will give you, however it does give you a good idea of the potential to get the money that you need.

Improving Your Credit Score:

No matter what you do, as long as you have a bank you will have a credit score, this is linked to your credit history and some of the information it will show is how you have managed loans in the past. Whether the loans are direct money loans, credit cards or even store cards. Lenders will use this information from your credit score that will assess the risk level that they have to lend you money.

Some of the things that will influence your credit score the heaviest include making payments late, past bankruptcies, see CCJ’s and defaults.

These will affect your credit score and it can be difficult to build up your score again. The main thing to remember is that none of the advice that we will give you here will work overnight. However, you can improve your credit score over a series of years, and it can work faster if you follow our simple guide.

How To Rebuild Your Credit Score With A Credit Card?

Essentially, you will be getting a credit card and using it in a certain manner and making sure that you do not break any of the ground rules. If you get a credit card an end up getting into more financial trouble obviously that will affect your credit score negatively.

The first thing that you will need to do is search for a good credit card, if you are in the UK, we recommend running a Google search for a credit card eligibility calculator, this will save you the trouble of applying for the card beforehand. If you apply for cards, they will normally run a search on your credit report and that can affect your future credit if you have too many of them over a short space of time.

By using a good credit card eligibility calculator, you are able to see and get a rough idea of which ones you will be accepted for. Another idea for you is to go through to Experian where they will have a very similar tool and that can help you if you are looking for loans and mortgages as well as other financial areas.

Bear in mind if you have bad credit will most likely get a smaller selection of credit cards that are available to you. If you can, try to make sure that you apply for a card that will give you a 0% on spending. Ideally, you will want to go for a credit card that gives you up to 6 months with 0% on spending, this of course means that you could use this to get credit and then pay back your card. It means that you will not be charged any extra APR.

The other thing to remember if you are getting a credit card with a bad credit score, you will normally notice that the APR is very high, so it is very important that you do not get yourself into more financial difficulty and only used card when you absolutely know that you can pay the funds back.

Here is how to rebuild your credit score:

You will use your new credit card for small purchases each month, this might mean when you are food shopping you will use your credit card for the purchase.

Then, you can simply repay in full straightaway, this will of course stop any interest rate being charged. Make sure that you check the APR of your card to get a 0% and that you understand the time limits for this feature.

As long as you have a 0% card you will be able to use this and then repay and that will allow you to start building up a better credit score.

We recommend using the card like this, if you do use the card for larger purchases make sure that you are repaying at least the minimum repayment on time. This is very important, if this is done incorrectly then you can end up making your credit score worse.

How it works?

The way it works is essentially you are borrowing the money, then you are paying it back straightaway so in a lenders viewpoint it makes you a very good borrower. This can quickly build up your credit score as it means that you are confident with borrowing and also paying the money back on time.

Final Recommendations:

Although this is a very good method to make sure that you are building your credit score there are two main parts that need to be handled correctly to make this a viable solution for you:

1. 0% Credit Card:

You will absolutely need a 0% credit card to make this worth doing. You will have to search around for this because if you have bad credit then the chances are that there will not be as wide a selection available to you. As long as you do not have a very bad credit rating you should be able to find some options.

We also recommend that you don’t just pick one on a whim, make sure that it is a well-known brand and if in doubt make sure that you check out some reviews of the company.

2. Repayments:

We highly recommend that you start off with small purchases where you are borrowing the money from the card. This means that you essentially have the money before you use the card, if you go and pay for your £40 food shopping, then you get home and pay off the card in a few days it will make you look like you are paying off your loan quickly and easily.

3. Time:

This can take some time. There is no way that you will be able to rebuild your credit score overnight, this is where we recommend using a service like Experian so you will be able to get a rough idea of how you are influencing your credit score positively.

4. Check Credit Score:

There are lots of services out the that will allow you to check your credit score. We highly recommend that you start with Experian. You can go for a free account, will give you the ability to check your credit score at least how they view your score. You will also be able to see an update every month.

If you go for the paid option, then you will also be able to see available credit cards and other financial products. At the time of writing there is also a trial available so this may well be worth doing because it means that you are able to see the cards that are available to you so it can make it easier to apply for a credit card.

Conclusion:

We hope this has helped you with a simple plan that will be able to build your credit score quickly and easily. The main thing to remember is not to get yourself into more financial difficulty and to make sure that you have the money available before you use the card and then you will not run into any problems.