A bad credit score can cause difficulties in multiple areas of a consumer’s life and for some individuals they are unsure how to combat this problem. However, there have been many who have turned to credit cards as a way to rebuild their credit history and improve their credit score.
Unsecured credit cards and secured cards are often used by consumers for rebuilding a credit history. Yet, it will depend on a cardholder’s financial position as to which of these cards will be most helpful. Usually, individuals with a bad credit score or little to no credit history turn to secured credit cards in order to increase a bad credit score or just as a way to build a better credit history.
Secured credit cards are typically chosen over unsecured cards since some people may either have trouble getting an unsecured credit card or have seen the interest rates on their unsecured cards rise due to a poor credit score. While an unsecured credit card can be helpful in building a better credit history or repairing a bad credit score, they may not be the right tool for some bad credit borrowers.
Yet, with secured credit cards, cardholders have been able to repair their credit score through the use of smart purchases and repayments. Usually, secured credit cards are not meant to carry a balance, but with any consumer looking to rebuild their credit history through the use of credit cards, advisers often suggest making purchases in amounts that can be easily paid off from month to month.
However, secured credit cards are no guarantee for a better credit history, but rather, are a way that cardholders with a bad credit score have improved their credit history through smart financial practices. The use of credit cards can be helpful when it comes to repairing a bad credit score, but cardholders must first implement responsible, long-term financial practices before they will see improvements in their credit history and avoid trouble in the future.