Bad Credit Score? These 5 Tips Will Help!

A healthy credit history is the key to unlocking great credit card deals. Below, we’ve listed 5 simple ways you can build up your credit score no matter where you’re starting from.

A secured credit card is typically backed by a cash deposit. This deposit amount usually then sets the limit on the card itself. As the issuer knows they have collateral, by using this card and paying off your spending on the card, your credit score may start to improve.

Credit Builder loans, like Credit Builder+ by Money Lion provide a great way to improve your credit by providing a small loan at a low rate which you can pay back over 6 to 12 months. They report your payments to the credit bureaus, which can help to improve your score.

If it feels like you’re barely making a dent in your revolving balance due to interest rates and it’s beginning to make your minimum payments overwhelming—maybe it’s time for a balance transfer. Balance transfers allows you to pay off the balance of one card, and transfer it to another card in the hopes of utilizing the new card’s lower interest rate. Some cards even offer favorable introductory interest rates for the first year that will allow you to start paying down your revolving balance without being hindered and slowed by high interest fees. Once you’re able to pay that revolving balance down to below 30% usage, you’ll start seeing a positive impact on your credit score—opening up your options for future credit cards!

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Opening a joint account with someone with a good credit allows you to plausibly get approved for a better interest rate. As all parties are liable, even if one has a patchy credit history, it doesn’t have to be reflected in a high APR or interest rate. You can then make the most of a better rate to build up your own score on the trust earned by their proven track record.

Another way to piggyback on another’s good credit is to apply for a co-signed credit card and have them vouch for you. Unlike a joint account, a co-signed credit card doesn’t share ownership, only the responsibility for paying off debt. As the co-signer shoulders the responsibility for paying up if you can’t, credit card issuers are more willing to be lenient when it comes to deciding who they allow to open an account.

If you’ve already begun making progress, increasing your account limit can help. By increasing the amount you are allowed to spend whilst keeping your actual spending low, you will bring down your utilization ratio. Your utilization ratio is your spending measured against your limit. A good ratio is anywhere below 30%. So, if your limit is $1,000 and you spend anywhere below $300, you’re in the clear. Spend the same amount but with a higher limit and your ratio will decrease. A low ratio shows your wise with your supplies even when you’ve got the keys to the vault. The result: a boosted score.

To find a good credit card you don’t need to start with a great track record. As we’ve shown, there are a number of ways you can even use credit itself to build up your score from scratch. The trick is just to pick the right card for you. Hopefully these points will help you to do so.