How I rebuilt my credit with a secured credit card

Utilizing a secured credit card can be a great way of rebuilding your credit history. How can I be sure of this? It's the method I used to repair my credit. Since no one would extend credit to me, getting a secured credit card was the only way I could establish my credit again. This is how it worked for me.

I sent $500 to the credit company and they sent me a credit card with a $500 credit limit. The $500 security deposit I made to them was held in a savings account. Every other aspect of the credit card functioned the same as an unsecured credit card. Like any other credit card paying on time is very important.

After 6 months of timely payments, the credit card company offered to triple my credit limit if I made another deposit. I sent them an additional $500 deposit and they added another $1,500 to my credit limit. I now had a credit limit of $2,000. After 1 year of timely payments, they sent back the $1,000 deposit plus interest and the credit card was converted to an unsecured card.

I wasn't on easy street yet because the interest rate on the card was horrific. It would take more time before other credit card companies with better interest rates would be willing to extend credit to me. Until then, I had no other choice but to suffer the high interest rates but here's something that I learned along the way.

Although I had to wait 7 years for the bad credit card to fall off my credit report, as I was establishing positive credit history, it only took a few years of responsible credit usage before I was able to get an American Express Charge Card. Granted my FICO score was not impressive yet, with each monthly billing cycle I was able to get my credit out of the gutter. As long as I kept everything current, it was just a waiting game for my FICO score to rise.

There are no quick fixes at repairing your credit. The key to this is consistent timely payments.