Used in moderation, credit cards can be a great way to improve your credit score. If your score is low due to previous activity like non-payment, bankruptcy or collections, apply for a credit card or two in your name to start reestablishing your credit and show that you are a good risk for lenders.
Start small! Do not try for any large limits. If you gain approval for more than $500 or $1,000, ask the creditor to lower your available amount. Remember, your credit score has negative information on it for a reason. If it was something completely out of your control that is one thing. But if the history is something you were responsible for, use those lessons learned to get yourself back on top. Exhibit your ability to handle a credit card, and repay any outstanding debts.
Resist the urge to get many new accounts at one time. Several inquiries and new amounts of credit extended to you in a 12-month period can reflect negatively and bring your score down. You would be working in reverse this way. Keep at least minimum payments and keep them on time. Try to avoid racking up high balances that minimum payments will take an eternity to pay off. Keep balances that can be paid every two or three months, in full. One thing that helps with this is setting up automatic draft of your payments. This causes your monthly payment to be automatically deducted from your bank account each month. If you spend more than you have, a landslide of events will happen. Knowing that payment needs to come out and money needs to be there for it to go through can help keep you from overspending.
In all truth, it is necessary to manage credit cards to raise your credit score. If you refuse to use them at all and live on cash only, credit agencies will not see improved management of credit and increase your scores. It will show that even you see yourself as a credit risk and that does nothing to convince lenders that you are once again credit worthy.
Elsewhere…
— Credit Card Debt Information
— General Credit Card Overview