How to Repair Bad Credit With a Checking Account

A low credit score may cause you to pay more money in interest and cause a denial for certain things, like a vehicle or house. Fortunately, you can reestablish your credit and increase your credit score by making timely payments and obtaining long-term credit accounts. A checking account, if used properly, can also help repair your bad credit depending on which merchants you choose to work with. Unfortunately, the checking account itself will not increase your credit score.

Instructions

1

Apply for a secured credit card with your bank using your checking account. A secured credit card operates similarly to an unsecured credit card only your credit limit is based on the deposit you make into your account. Depending on your bank, the amount of money you have in your checking account can be used as collateral for getting a secured credit card. Contact your bank to determine if they offer this program. You can make timely payments on a secured credit card by making small purchases each month and using your checking account to pay the bill. If your bank does not provide secured credit cards use sites like bankrate.com or credit card.com to locate secured credit cards and banks in your area or online.

2

Use your checking account for installment loans on certain products. There are certain companies that will extend credit to those with bad credit if they have a checking account. For example, if you would like to purchase a new TV there are vendors who will allow you to put money down and make subsequent payments that will be taken out of your checking account. In return, they will report your good payment history to credit bureaus which will increase your credit score. Sometimes the interest rates for these products are higher than usual but the idea is to rebuild your credit and gain a higher credit score.

3

Pay your utility bills on time using your checking account. There are sites online that will allow you to use your timely payment of utility bills as a way of increasing your credit score. Using your checking account not only proves the date that you paid your bills, but also creates a paper trail in the event there are any errors that can affect your credit with utility companies.