So you have been through a personal financial crisis and seen the evil that credit cards are, and you’re finally understanding better how money works and what happens when you keep charging purchases up to the limit on your card… ultimately swamping yourself in debt. You’ve finally cleared out most or all of that revolving credit card debt and now you can breathe an immense sigh of relief. Congratulate yourself, but also get ready for a shocker.
Just when you’ve sworn off all credit cards for life as being completely evil (and rightly so), now to start improving your credit score again you’re going to need to *GASP* get a credit card again.
USING CREDIT
RESPONSIBLY
IMPROVES
YOUR
CREDIT SCORE
When you start using credit responsibly by keeping the balance paid in full every month not only are you able to avoid interest charges and late payment penalties, but you are also helping to ratchet your overall credit score a few points higher.
I’ll admit that it is indeed a scary proposition, after all, what if you make a purchase and then later cannot pay for it when the bill is due? It is true that what lenders are looking for is a solid history over an extended period of time, and as such your credit score can be marred again significantly from just one missed payment. However, at some point you do have to start showing that you can use credit responsibly if you want your credit score to go up.
One way to manage this effectivley is to, for example, pay your energy bill (or any other purchase) with your credit card, and at the same time put that money into a secondary checking account where it can sit waiting to pay the credit card bill on time. Then when you get the credit card bill, you already have the money to pay it set aside.
For me personally, I have yet to take the plunge back into credit card land. I know I’ll have to go there again someday, but I’m really procrastinating. So if you’re like me, it’s something you’ll do again when you feel ready to get your credit score really moving back into a positive direction again.
