A few years ago, I had a terrible credit score. Since I had screwed up with credit lines that I had previously, I had a much harder time getting credit. Since I had REALLY blown it with two previous credit cards, my accounts had been closed and I couldn’t get new ones. When you find yourself in this situation, it might seem like it’s not possible to rebuild your credit. I was in that boat for a year or two.

Fortunately, I discovered that it’s possible to get a credit card with a 550 credit score. Actually, there are two ways. They aren’t going to be the greatest credit cards in the history of the universe, but they will help you to improve your credit and before too long you’ll be able to get regular credit cards. Here are the options that you have if you have bad credit:

Secured Credit Cards

Secured cards are a great option for those who have bad credit. When I took out a secured card, I put down a deposit of $200 and I was then given a card with a $200 limit. After a year or so of on-time payments, I was given back my deposit while keeping my limit.

It took less than six months for me to build enough credit to get unsecured credit cards. That was a few years ago but I now have credit limits that total over $30,000. I have one credit card that has an $18,000 limit.

The key with secured cards is to make your payment every single month. You also need to make sure that you use less than 30% of your limit. For me, since I had a $200 limit, I had to make sure that I never used more than about $60 on the card. As long as you do that, your credit will improve significantly.

Prepaid Credit Cards

If you aren’t able to take out a secured credit card, you can opt for a prepaid credit card. Many of these cards report to credit bureaus and everyone is approved for them. The major difference between prepaid and secured cards is that with prepaid cards, you generally have to pay a monthly fee. You can plan on getting a positive report to credit bureaus as long as you make that payment on time.

I personally would take out a secured card if it’s possible but if it isn’t, this is a great option. You can make on-time payments for a while and after that you’ll have improved credit, as long as you pay all of your other bills on time.

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