Our customer Brian couldn’t understand why his credit was so bad. He seemed to be doing everything right – he paid off all his old debts and avoided credit cards. Credit cards are necessary to maintain a healthy credit score though. You may skip this article if you know which credit cards to use and avoid.

But all the credit cards created are not equal, and they can affect your credit score in different ways. Before applying for credit cards to raise your credit score, it’s important to understand how they truly impact your FICO rating.

When discussing credit limits, we’re only talking about normal credit cards, which are called revolving lines of credit. This means if you have a $1000 limit and a $600 balance, you can still spend $400.

Secured credit cards (which are prepaid) and store credit cards act more like installment loans on your credit report. This means if you have a $1000 limit and a $600 balance, it still shows on your credit report as a $1000 loan with no available credit.

Know Which Credit Cards to Use when you have bad credit

When you have bad credit, a secured credit card is the only option you have. That’s what we got for Brian, and by maintaining a good payment history on his secured credit card, he raised his credit rating by nearly 50 points in less than a year. Here’s a list of the best-secured credit cards to apply for, including the Open Sky Secured Visa and Discover It Secured.

Also, keep a credit card issuer’s customer service track record. J.D. Power releases a study every year on credit card customer satisfaction. According to J.D Power, the top three card issuers are American Express, Discover, and Capital One. These are the companies most likely to resolve your issues on the first call. As for banks, Capital One, BB&T, and Chase take the top marks.

Avoid cards with high fees and bad customer service. In 2018, the worst credit cards include First PREMIER Bank Gold Credit Card, BancorpSouth Gold Mastercard, and Arvest Bank Visa Classic Card. These cards may hurt your credit rating more than they help.

There’s one final tip (Search Court Records for Judgements) to get your credit score out of the gutter and make your life easier.


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