Who Else Wants to Know how to Improve Their Credit Score Rating on the Cheap?

This is a guest article by Ethel Wilson.

Increase Credit ScoreYou won’t believe how many people need to improve their credit score rating. Fair Isaac Corporation (FICO) – the organization responsible for developing and overseeing the internationally accepted formula for computing credit scores- recently released data indicating more than 40 million people need to raise their credit score rating. All of them have scores below 599, which is considered to be in the bad credit bracket. Many of these people are unaware of their bad rating, while many that do are not sere how to correct it. There is no need to hire someone to do it for you. There is an inexpensive method that anyone can use to improve their credit score rating.

Improve Your Credit Score Rating With a Secured Credit Card

There is a constant flow of information being added to your credit history on a monthly basis. The secret to maintaining a positive credit score rating is to ensure that the positive data entering our record outnumbers the negative. Think of your bad credit score rating as a dirty glass of water. If we add enough clean water the dirty water will be dispelled. This is true also of a credit history. Negative information will be dispelled in accordance with the amount of positive or “clean credit” you add to it.

Adding that clean credit” information is not expensive at all. One of the most effective and inexpensive ways to raise your credit score rating is to obtain a secured credit card. The major difference between a secured credit card and an ordinary once is that you must put down a deposit on a secured card. Your credit limit will be equal to the deposit you make. This protects the lender, and at the same time gives the consumer the opportunity to begin raising their credit score rating.

You can get a secured card with as little as two hundred dollars down. Your deposit is completely refunded when you close your account, though some banks and lenders will return it after a year. You need to check the specific terms with the entity you are obtaining the card from. Because this is a low-risk card it is easy to get approval, and it is inexpensive as the annual interest rate is low, they are reported monthly to the credit bureaus, and the fees are generally low. Some have interest rates below 8%, with annual fees of around thirty five dollars.

If you’re a person with a bad history of credit card use and you don’t trust yourself, here’s an encouraging point. Even if you don’t use your card, it will still raise your credit score rating! As soon as you open an account your credit score goes up, and if you maintain a balance of zero, it will be reported every month as in good standing. This will raise your credit score rating on a monthly basis.

Of course the above advice is best followed after examining your credit report to make sure that it is error free. You can also receive a free report from each of the three major credit reporting agencies; TransUnion, Experian and Equifax, once a year. Get your free credit report today, and begin building you credit score rating quickly and inexpensively.

Ethel Wilson has been advising clients on how to improve their credit score ratings for over 12 years. With an extensive background in the banking, credit scores and financial industry, she now shares the best of her credit score information as a contributor and editor of

Image courtesy of Stuart Miles /

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  1. February 12, 2013 at 9:24 am — Reply

    I recently played around with a credit score calculator on CreditKarma and “hypothetically” reduced my debt by $5000. CK showed that my score went up by about 25 points. CK is pretty close in estimating what your score is. When I compared their estimate vs two of my real credit scores they were dead smack in the middle between two of the. If you can find a way to reduce your debt load (which I understand may be difficult for some) you can, in theory, raise your score.

    • February 12, 2013 at 10:09 am — Reply

      So true Jose. I enjoy playing with that tool.

  2. Eddie
    February 12, 2013 at 9:43 am — Reply

    Great post.
    I recently advised (or shall I say recommended) to a friend who has a horrid credit score to take out a secure credit card and start the rebuild process. I think it’s one of the safest way to build credit without taking on my credit such as car loan.

    • February 12, 2013 at 10:10 am — Reply

      They can be a great way as long as you treat it correctly.

  3. February 12, 2013 at 9:50 am — Reply

    Raising your credit score is essential to get better deals on loans. I would work hard on it before getting a mortgage or a loan, as a few % difference on the rate can have a big impact on repayments.

    • February 12, 2013 at 10:10 am — Reply

      You are so right Pauline. Just a few points here or there can really cost you a lot in the long run.

  4. February 12, 2013 at 9:54 am — Reply

    I think secured credit cards can b a good thing if you’re just starting over and need to rebuild your credit. I know they were offered to me when I was climbing out of debt, but at the time the rates were just so crazy. I did not realize that they can improve your score even if you don’t use them, so that’s a nice perk.

    • February 12, 2013 at 10:11 am — Reply

      They never make things easy if you have bad credit. Secured cards are the best way to do is as long as you respect the card.

  5. February 12, 2013 at 10:03 am — Reply

    I have a love-hate relationship with secured credit cards. On one hand I don’t like what they represent, but on the other I like that there’s a tool that’ll help you rebuild credit that you might need in the future. My goal? Never need credit again.

    • February 12, 2013 at 10:11 am — Reply

      That is a great goal Joe. It would be awesome to never need credit again, unfortunately, that goal is highly unattainable for some.

  6. February 12, 2013 at 10:12 am — Reply

    I like your analogy Ethal. Mixing in more good credit than bad will raise your score. I also like the idea of having a secure card to improve your credit. I actually have a friend that is doing this right now. It’s not that he has bad credit but more because he never had any credit because he never has had a loan or a credit card. However he wants to buy a house and the problem is his credit score is way to low with no loans or credit cards he opted for a secured card.

  7. February 12, 2013 at 10:24 am — Reply

    We are really working on making our credit score as perfect as possible so that we can get the best rate on a new home!

    • February 12, 2013 at 11:26 pm — Reply

      I am making sure that I keep my score high, so I can get the great rate!

  8. February 12, 2013 at 3:23 pm — Reply

    I’m fortunate to have worked hard to maintain my high credit score/rating even when I had credit card debt. Keeping this in tact allowed me to refinance my mortgage at an incredible rate last spring!

    • February 12, 2013 at 11:27 pm — Reply

      I was able to keep my score nice and high during my debt reduction years. I don’t have the ability to refinance now due to many factors, but I would get a good rate if I did.

  9. February 12, 2013 at 7:52 pm — Reply

    A good credit score is needed for loans, mortgages and in some cases to get a job. I know someone who got the secured credit card and was easily able to sort out their credit score with-in the year to get their mortgage. It does work but it takes time.

    • February 12, 2013 at 11:28 pm — Reply

      Many people don’t realize what their score is actually used for and I am glad you added a job in there.

  10. February 12, 2013 at 9:20 pm — Reply

    At least there are options out there to help people rebuild their credit score, it would be sad if it was a hopeless case after a few silly mistakes.

    • February 12, 2013 at 11:28 pm — Reply

      So true Adam.

  11. Justin@TheFrugalPath
    February 12, 2013 at 9:40 pm — Reply

    I know that there is a movement that believes in not using your credit score for anything. However, as someone who plans to someday work in the finance field, it is important for me to have a great score. People don’t want you to handle their money unless you know how to handle your own.

    • February 12, 2013 at 11:28 pm — Reply

      I am not part of that movement. I think credit scores are important and at least something to strive for.

  12. February 13, 2013 at 2:24 pm — Reply

    That’s a great tip and I’ve actually been looking for something like that. My fiance has terrible credit and I would like her to repair it, I think secured credit cards are the way to go!

  13. February 15, 2013 at 2:29 am — Reply

    Getting a secured credit card is especially important if you have issues on your credit report that can’t be removed like like charge offs or judgments. They let you rebuild credit which will hopefully offset long term black marks.

  14. Steven Bauer
    March 26, 2013 at 9:25 am — Reply

    This is really solid advice. One of the points that I took from this is that I shouldn’t close my unused credit cards. I think that is a common misconception that can work against many people.

    I currently use a secured credit card and it completely makes sense for my lifestyle. I’m surprised more people don’t do it.

    Thanks for the solid advice Ethel.

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