By: Gordon Thomson
Paying Your Bills
This is like getting interest free credit: pay your everyday bills with the secured credit card that you normally pay with cash; utility bills, telephone, water, car loan groceries.
After you buy your purchases on credit you will now want to put aside the cash to pay the credit card bill at the end of the monthly billing cycle.
Limit Your Spending on the Credit Card
If you are serious about improving your credit score In general, try to limit your use of your card to no more than 50% of your credit. This will show the credit bureaus that you are responsible in your approach to credit spending. If you can pay off your credit card in full each month, that is even better, in fact it is crucial to rebuilding your FICO Score and you pay no interest. DO NOT pay only the minimum this can only hurt you, not only will you now be paying interest on the unpaid balance but it will reflect negatively on your credit report.
Once you have established a history of paying on your unsecured credit cards file (6-9 months) you are now ready to go back to your bank and apply for an unsecured credit card. When the bank refers to your credit file, they will find you have an impressive payment history and no outstanding balance. They should be more than willing to convert your secured card to an unsecured bank card and free up the cash held as security.
Keeping Your Good Credit
You have established a new credit identity, you’ve cleaned up your credit file, and you have established a good payment history. Now what do you do? You maintain it that is what!
Because credit cards make it easy to purchase things now and pay later, it's easy to lose track of how much you've spent. Be sure to pay all your bills on time, and only get the credit cards you need
Avoid applying for a card just because the issuer is offering incentives, it is easy to apply for a store credit card that you forget all about in three years - but that account will remain on your credit report and affect your credit score as long as it is open.
Use your credit card wisely, and you'll have a very beneficial financial tool. Use your card unwisely, and you'll run up credit card debt you can't afford and be right back where you started. Nothing is easier than charging small things here and there, only to find yourself with a large bill you can't pay.