Time For A New Beginning
If you’ve found this page, it means you’re ready for a new beginning. Something has happened in your past that ruined your credit score and now you’re trying to figure out how to start over. I know it seems reverse of normal thinking, but one of the best things to do if you have bad credit is to open a credit card and use it wisely. Please hear me. I’m NOT saying to open a credit card and buy you can’t afford. That will do nothing but hurt you more. What I am suggesting is to open a credit card and start paying if off in full every month and on-time.

How Does Opening A Credit Card Help My Credit?
Think about this. If I needed to rank you on your ability to ride a bike, what would I need to do? Well obviously I would need to see you ride a bike. It’s the same with your credit score. In order for the credit bureaus (the companies who assign your credit score) to see how well you handle credit, you need to have something for them to see.There are many factors to go into making your credit score and you can learn more details at this great article on cnbc.com, but the two most important factors are Payment History (35%) (do you pay on-time and do you pay it off in full) and Amounts Owed (30%) (this is what you’ve spent and not what your limits are).

Where To Start
To go back to my bike riding analogy, you need to start with training wheels. In terms of bad credit, it means getting a secured credit card. A secured credit card is a type of credit card that is backed by a secured payment used as collateral on the account. Basically, you pre-fund an account with a certain amount of money and then you can charge your credit card up to that amount. Here is a great article that tackles 10 great questions about secured credit cards.

What Is The Best Card For People With Bad Credit?
Although there are lots of options, I recommend one card specifically because there’s no annual fee. 

Capital One Secured Mastercard
 – No annual fee
 – It’s a real credit card. You can build a credit history with the three major credit bureaus.
– You will get an initial $200 credit line after making a security deposit of $49, $99, or $200, determined based on your creditworthiness.
– Get access to a higher credit line after making your first 5 monthly payments on time with no additional deposit needed.

Tips To Using A Credit Card Wisely

1. Pay Each Month In Full – This is the first of the two most important factors in determining your credit score. You NEED to pay your bill in full every month. This shows the credit bureaus that you know how to use credit wisely.
2. Pay Each Month On-Time – This is the second most important factor with your credit score.
3. Treat It Like Cash – If you can’t afford it, don’t buy it. If you don’t have the money to pay for it now, wait and save for it.
4. Keep Your Balances Low – This should be a natural thing if you are following tips 1 and 2 above. If you charge it, pay it off when the bill comes. Simple as that.

Was this helpful? Leave a comment below if you have experience with another card that is good for bad credit scores.