Using credit cards to undo bad credit history


ADVERTISING DISCLOSURE: is an independent, advertising-supported web site. receives compensation from most credit card issuers whose offers appear on our site. Compensation from our advertising partners impacts how and where their products appear on our site, including, for example, the order in which they may appear within review lists. has not reviewed all available credit card offers in the marketplace.

Credit Card Applications » Research » Guides » Building Credit History » Using credit cards to undo bad credit history

Using credit cards to undo bad credit history

Updated: December 26, 2012

The content is accurate at the time of publication and is subject to change.
Credit cards could sometimes lead to bad spending habits causing people to ruin their credit history and lower their creditworthiness. However, credit cards can be used as instruments to help you manage our finances better too. Here are some strategies to use credit cards to undo bad credit history. Make Bill Payments on Time If your credit history is bad, using your credit through the credit card is the only way you can repair it in the future. However, you also need to pay back whatever you have charged on the card. If you can use your credit card for all reasonable expenditure and then pay back the dues before the payment deadline is due, over a period of time, your credit rating will greatly improve. Most importantly, consistent bill payments will make you more credit worthy, and more credit card issuers would be willing to offer good deals to you. Use the monthly expenditure report Almost all credit card issuers send credit card customers detailed expenditure reports for the month. These reports could be used effectively to look for expenditure amounts that could be avoided. Finances that were wasted in extravagance can be instantaneously spotted, which means you will always be aware of where some of your hard earned money disappears and where you could pull back some savings. The lower the extravagance, the lower your outstanding balances and therefore the better your credit history will be. Auto debited bill payments This is one of the biggest benefits of owning a credit card. If your bills are all paid on time, it will greatly improve your credit history. This doesn't just involve your credit card bills but also bills for your utilities like electricity, water, phone or internet. Setting auto debit payments from your credit cards for all these bills ensures that you never miss a single bill payment deadline. This way, over a period of time, you can greatly improve your credit history and credit rating. This is because credit history depends on the consistency with which bill payments are made. Fear of interests Fear of credit card interests and taking it as a challenge not to pay additional interests on credit cards, could help you avoiding big expenses. This is how even credit limits can be used properly. You can set targets, so that you never really spend more than what you can afford. That way, your outstanding dues remain low and your monthly expenditure remains under control. Plastic is always better than cash Spending with your cash will never improve your credit history, because there is no trail left for it. You will find it difficult to get personal loans or good premium rates for insurance for medical expenses or vehicles. Plastic will not only leave a trail, thereby adding to your credit every time you spend, it also helps you keep track of what you have spent. It is often easier to know where and how you have spent money with a card, than trying to figure out where all that cash went out from your pocket.

Disclaimer: This editorial content is not provided or commissioned by the credit card issuer(s). Opinions expressed here are the author's alone, not those of the credit card issuer(s), and have not been reviewed, approved or otherwise endorsed by the credit card issuer(s). Reasonable efforts are made to present accurate information, however all information is presented without warranty. Consult a card's issuing bank for the terms & conditions.
All rates and fees, and other terms and conditions of the products mentioned in this article/post are actual as of the last update date but are subject to change. See the current products' Terms & Conditions on the issuing banks' websites.
Add to Favorites:
Get the latest news, articles and expert advice delivered to your inbox. It's FREE.

Related Research:

Autumn 2018: Best Rewards Credit Cards for Thanksgiving Shopping

Autumn 2018: Best Rewards Credit Cards for Thanksgiving Shopping

Posted: November 8, 2018

Thanksgiving is coming, and whether you are hosting a meal or coming as a guest, your spendings are going to accumulate faster than you can notice. A holiday feast is a costly matter – each year Americans spend around $50 on a Thanksgiving ... Continue reading
The Best Credit Card for Earning Cash: Discover it® Cash Back

The Best Credit Card for Earning Cash: Discover it® Cash Back

Posted: November 2, 2018

You’ll have hundreds of dollars in your pocket in no time because you’ll earn money back on every purchase you make with this card. There are no restrictions on the amount of cash back you can get, and Discover even matches every penny you ... Continue reading
Top 5 Cards for Travel from Our Partners: Autumn 2018 – Expert’s Choice

Top 5 Cards for Travel from Our Partners: Autumn 2018 – Expert’s Choice

Posted: October 10, 2018

Nights are drawing out, the wind is colder every day and you already feel the lightest breath of winter on your face - autumn is here. Holidays are over, kids are back to school and all you are left with are hefty holiday bills that you ... Continue reading
You've successfully subscribed!

Please specify the following:All these fields are optional

Your Credit History
Themes you are interested in:

By providing this information you help us make our news letters more useful and informative. Thank you!