Credit card strategies for those with low credit scores

Holly Johnson
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Holly Johnson
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Having a low credit score can make life more difficult (and expensive) than it needs to be, and that’s especially true if you need to borrow money. After all, a low credit score can mean not being approved for the type of financing you need, whether you’re applying for an auto loan, a personal loan or a credit card. And if you do get approved, interest rates and loan fees can be higher to make up for the additional risk lenders take on due to your low credit score.

Your best bet in this scenario is figuring out how to improve your credit score in the short-term and over the coming years. Fortunately, there are quite a few credit card strategies to help you boost your credit score, many of which you could get started on right away.

Apply for a secured credit card to build credit

First, you should know that certain types of credit cards — secured credit cards — are geared to this exact situation. Secured credit cards require users to put down a cash deposit as collateral, and that deposit becomes the credit limit they can use.

Most importantly, secured credit cards help build credit by reporting balances and payments to the three credit bureaus — Experian, Equifax and TransUnion. Some secured credit cards also offer rewards for spending, and many come with no annual fee required.

As you search for secured credit cards, you can even look for an option that offers a pathway to an unsecured credit card with responsible use. This shouldn’t be too difficult since several popular secured credit cards will automatically upgrade you to an unsecured card and refund your deposit after you use them responsibly and make on-time payments for as little as seven months.

Also note that, even if you don’t get upgraded from a secured card to an unsecured card with your issuer, your security deposit is still fully refundable with these cards when you close your account in good standing with a $0 balance.

Look for credit cards with no credit check

If you’re worried your credit score is so low you won’t even be approved for a secured credit card, you should know that some secured cards don’t even require a credit score or credit history to apply. There are also secured credit cards with no credit check to choose from, which can help you start building and repairing your credit as soon as you start using them for purchases and making regular payments.

Keep your balance as low as possible

Once you have a credit card of any kind in your name, you’ll need to use it carefully to ensure the optimal results when it comes to your credit score. An important step you can take in this realm is keeping your balance as low as possible, and you can do this by making payments on your credit card several times throughout each billing cycle.

This step is especially important since secured credit cards and other credit cards for bad credit tend to have incredibly low limits — even as low as $200. This means making purchases in nearly any amount can make your credit utilization high. Since this factor makes up 30% of your FICO scores, you’ll want to keep your credit utilization as low as you possibly can.

Most experts recommend keeping the amounts you owe on your credit cards below 30% of your available credit limits at all times, which means never carrying a balance over $60 if you have a credit limit of $200. With this in mind, it’s easy to see how making several payments per month can work in your favor.

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Always pay on time

All this being said, the most important step you’ll want to take with a credit card is always making on-time payments. This factor makes up 35% of your FICO scores, so the way you treat credit in this category can have a dramatic impact on your overall credit health.

Our advice? Make multiple payments throughout the month to keep your balance low, which will in turn ensure you never miss a payment. If you’re worried you might get busy and forget, you should also set up your account so your card’s minimum monthly payment is automatically made on your behalf no matter what.

Other credit-building strategies to try

The credit card strategies above can help you increase a low credit score, but there are other, related moves that can help.

Consider the following:

  • Consider a credit-builder loan. Credit-builder loans let users make payments to a savings account or Certificate of Deposit (CD) in their name, and those payments are ultimately reported to the credit bureaus to help build credit over time. Minimal fees apply along the way, but consumers can earn modest interest on their balances and they get the amount they pay in back (less charges and fees) at the end of the loan term. The best part? Because credit-builder loans don’t actually extend a line of credit, they’re incredibly easy to qualify for with a low credit score.
  • Get credit for regular bills. Use an app like Experian Boost to get credit on your Experian credit report for bills you’re already paying. This app is free to use, and it lets you get information reported on your credit report for subscriptions you pay for, utility bills, phone bills, rent payments and insurance.


A low credit score can leave you feeling frustrated, but it doesn’t have to be a life sentence. There are several moves you could make today that could start building your credit in the short-term, and responsible use over the long haul could ultimately land you the excellent credit score you wish you had right now.

The best move you can make right now is coming up with a game plan to improve your credit with a new credit card or other tools you already have. The sooner you get started, the better off your credit score will be.

Holly Johnson
Cardratings Contributor

Holly Johnson is a professional writer who has been covering personal finance, credit cards and loyalty programs for more than a decade. She is passionate when it comes to explaining the ins and outs of various programs and financial products to consumers, as well as...Read more

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