How to Repair Bad Credit with a Partially Secured Credit Card

Secured credit cards require you to make a deposit into a bank account. Initially, the amount on deposit becomes your credit line and acts as collateral for the loan. Over time, you may become eligible for credit line increases without making an additional deposit. At that time the card becomes partially secured by your bank deposit. Fully or partially secured credit cards are excellent tools for rebuilding your credit when used wisely.

Instructions

1

Apply at your bank or credit union for a secured credit card account. If your financial institution doesn't offer it, ask friends who have such an account where they applied. Make the required savingsdeposit to secure your card.

2

Use the card for purchases and payments. Establish a perfect repayment history by never missing a payment or going over your credit limit. Staying well below your credit limit can show you're using your card responsibly and you are not desperate for credit. Also, making more than the minimum payment will lower your balance faster and provide another indicator that you are handling credit responsibly.

3

As for a credit line increase after several months of on-time payments. Continue using the card if you are denied and apply again for a credit line increase after several months. Avoid frequent requests for credit line increases. Your credit card company has a right to pull your credit report each time, and an excessive number of inquires over a short period of time could cause your score to drop. Generally, you'll want to avoid having more than a handful of credit inquiries each year.

4

Open an additional secured credit card account, if possible, and use it responsibly as well. The positive use of your credit will be reported to the three major credit-reporting bureaus -- TransUnion, Equifax and Experian. Over time, your credit scores should increase because of the responsible use of the secured credit cards. You can use the same bank or a different bank to open an additional secured account. Your credit reports will treat them as completely separate accounts, even if they are from the same lender.