Get Out of Debt

Use a Credit Card to Boost Your Credit Score

If you have already been hit with some of the consequences of poor credit, like losing your credit cards and being closed off to most lending, one thing you might be able to do to improve yourself going forward is to get a secured credit card and then carefully pay that bill on time.

The secured credit card is reported to the credit agencies just like a regular credit card is, but here is the difference: if you have a secured credit card with a $500 line of credit, you need to have deposited $500 with the bank ahead of time in order to have that credit. At this moment in time, they do not trust you to pay back the money.

The good news is that if you do not max out this credit card and keep any ongoing balance at no more than $100 and pay the bill on time every month, you will get a better credit score over time.

Paying on time is critical. In fact, you should link this credit card to your checking account so that the minimum is paid each month and on time. We cannot stress this enough. One of our editors here at Zero Debt Living does communications work for a major credit card company. They will dun her immediately if she is one day late in paying her credit card bill. Yet when it comes to paying their own bills, they take 120 days! It is not fair, but this is the system that we have here.