A Credit Card Guide for Michigan Consumers who want to Rebuild a Bad Credit Score
Michigan consumers who want to rebuild a bad credit score can use credit cards to help them reach their goals. They have to be careful though. For many Michiganders, credit cards are what got them in trouble with their credit in the first place. Of course there’s a big difference between using credit cards to build good credit and abusing them to overspend. In order for Michigan consumers to successfully utilize credit cards as credit building tools, they’ll need to think about three things.
First, they’ll need to fully understand the function that a credit card serves for a consumer with bad credit.
Next, they’ll need to devise a payment management system so that their payments will always be in full and on time. This rule should apply to both credit card statements and other bills. Late payments on anything can hurt your credit score.
Finally, Michiganders with bad credit should commit to doing the necessary research in order to find the best credit card for their situation.
Why it is Important for Michigan Consumers with Bad Credit to Fully Understand a Credit Card’s Purpose
Many secured and unsecured credit cards specifically designed for consumers with bad credit. Consumers provide cash deposits in order to open secured credit cards. Also, depending on the company, additional fees may apply. Unsecured credit cards don’t require a cash deposit. Yet, the ones that are available to Michigan consumers with bad credit almost always come with fees. Also, almost all of the credit card issuers willing to approve consumers with bad credit charge higher interest rates.
Because your interest rate is likely to be so high, you should avoid carrying a balance on your credit card. Balances carried on high interest credit cards can quickly get out of control. In addition to this, if you’re using more than 30% of your available credit at any time, your credit score can drop. This can happen even if you’re paying your bills on time.
Always remember that you should never use a credit card to spend beyond your means. It’s a good idea to get into the habit of only charging what you can afford to pay off every month. This will help you to avoid building debt. Future lenders will also see that you truly understand how credit works and how to make it work for you.
The Best Way for Michiganders with Bad Credit to Fit Credit Card Purchases into their Household Budgets
A good way to use credit cards as credit building tools is to only charge goods and/or services included in your household budget. For example, you can bring out the plastic every time you stop for gas. By only putting the cost of fuel for your car on the credit card and paying off the bill every month, you will be improving your credit score without spending extra money.
Here are some other expenses that you can put on a credit card that you intend to pay off at the end of the month:
- Cell Phone Service
- Cable or Streaming Services
- Your Monthly Date Night (if you have one)
Want to use your credit card for anything other than its intended purpose? Just remember your credit repair goals. You’re working toward a better credit score and all of the benefits that come with it. You don’t want to do anything to undermine your efforts.
The Best Credit Cards for Michigan Consumers with Bad Credit
According to U.S. News and World Report, 35% of Michiganders with bad credit don’t do any research before applying for a credit card. This is unfortunate because some credit cards are better for consumers with bad credit than others.
There’s also the issue of the hard inquiry. Whenever you apply for a new credit card, a hard inquiry is placed on at least one of your credit reports. This will cause your credit score to drop by a few points. It’s better to do a little research and make sure that you have a real chance at getting approved for a credit card before applying. This way you won’t lose credit score points for nothing.
The first choice that you’ll need to make when looking for a new credit card is whether you want a secured or unsecured card. Some Michigan consumers are thrown off by the deposit required to open a secured credit card. However, if you look at the fees that some unsecured card issuers charge applicants with bad credit, you may find that you can actually save money by going with a secured option.
Speaking of fees, you’ll want to carefully read about which credit cards charge what fees, and make sure that there are no hidden costs. In addition, you will also want to research penalties, interest rates, whether or not grace periods are allowed, and possible rewards programs. Ultimately, you should apply for the best credit card for which you qualify, and not just the first one that looks acceptable.
Why Checking Your Credit Reports is an Important Part of a Credit Repair Plan
As a Michigan resident with bad credit, regularly checking your credit reports is vital. Not only will going over your credit reports give you insight into why your credit score is what it is, but it will also allow you to look for errors.
It’s not uncommon for any consumer to find inaccuracies on any of their credit reports from the three major credit bureaus. And, unfortunately, a lot of these mistakes can bring down credit scores. You owe it to yourself to make sure that your credit score isn’t lower than it should be because of careless errors.
If you haven’t pulled any of your credit reports in a while, you should go to www.annualcreditreport.com and request all three. You can do this for free once every 12 months. If you spot an error or multiple errors on one or more of your credit reports, you should dispute the item(s) immediately. Don’t want to deal with credit bureaus on your own? That’s understandable. Luckily, you can get a FREE credit repair lawyer to handle the entire disputing process for you.
The Free and Legal way to Get Better Credit
Don’t let errors on your credit reports bring your credit score down. At Michigan Consumer Credit Lawyers, we’ve been cleaning up credit reports for consumers since 2008 for free. How do we do it? All of our fees come from the defendants in cases that are settled. This is why our clients pay nothing for the work we do.
Let’s start the conversation about what we can do for your credit. Set up your free consultation today by calling Attorney Gary Nitzkin at (248) 353-2882 or contact us on our contact page.