Q:

How can you use businesses that offer easy credit approval to rebuild your credit?

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Quick Answer

Consumers can use businesses that offer easy credit approval to rebuild their credit by limiting the number of credit applications they make, charging only for purchases within their budget, and paying their monthly bills in full and on time, reports About.com. Avoid subprime credit cards with high fees and interest. Instead, get gas station or department store credit cards, secured credit cards, or arrange payment schedules for items with local merchants, points out Nolo.

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Full Answer

Consumers seeking to improve their credit scores must establish new spending and credit habits, explains About.com. They should avoid buying items on credit that they cannot afford, getting by with minimum payments and skipping payments when times are tight. They should also avoid multiple credit applications, as these can lower credit scores. Prepaid credit cards are useless in re-establishing credit scores, as they are not actual credit cards and do not report to credit bureaus.

Because gas station and department store credit cards generally offer low credit lines, it is imperative that consumers pay off the balances in full every month, according to Nolo. Not only do interest rates tend to be high, but also when credit limits are low, percentages of credit limits consumers use are high, and this negatively impacts credit scores. Using store payment plans to purchase items helps credit scores directly if merchants report payments to the credit reporting agencies or indirectly by demonstrating creditworthiness and making it easier to get credit in the future.

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