rebSo your credit is bad… It’s not the end of the Mayan calendar!!

Rebuilding your credit can seem difficult some times, but it all starts with establishing new patterns in your credit habits. As the saying goes, “it takes credit to make credit.” (Or something like that.) Bad credit can make it tough or impossible to obtain a regular bank credit card. But there are still options, and getting a new credit card is a vital step in your credit makeover.

First Steps in Credit Makeover

One consideration might be a secured credit card. Secured credit cards typically allow you to borrow up to the amount of money in your bank account, a guarantee to the credit card company that you’ll be able to pay off your charged purchases. Look for cards with low annual fees and no application fees, and some also offer the possibility for converting your card into an unsecured card in the future.

If not, the next step is to seek out an unsecured card from another source, like department stores, which typically offer easier qualification for credit. Demonstrating the ability to pay off those cards will give you the opportunity to be accepted for a regular bank credit card soon after that.

Making History One Payment at a Time

Keep in mind: The biggest factor in determining your credit score is payment history, and the only way to raise your average on that front is to start making good on all payments moving forward. Making your payments on time is vital, because late payments (or failure to pay at all), defaulting on loans, having your home foreclosed, or filing for bankruptcy all demonstrate a failure to keep your end of a deal. Paying future bills on time helps to reestablish some trust in your borrowing.

A major part of making sure you can meet your credit obligations is remembering to stay within your means. Using all of your credit (by maxing out your credit cards or closing cards that still have balances on them) damages your credit score, so it’s smart to stay below 50 percent of your credit limit, if possible. Frivolous charges can add up, so don’t charge more than you need to or more than you can afford. When the bill comes around, smart budgeting with your credit will make it easier to make larger bill payments?it’s a good thing to pay off either your full credit card balance or at least more than the minimum amount each month.

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