If your credit score is bad you need to follow a robust strategy to improve your credit. You should make the effort to learn about credit and how to use credit cards so that once your credit score is fixed it never goes down again. Improving your FICO credit score includes fixing the things that are hurting your credit. The next step is to apply for a credit card that is made for low credit scores or a secured credit card.  Once you have a card make sure you pay all your bills on time and keep your balances low. This will move quickly toward good credit.

#1. Secured credit cards

A secured credit card requires a deposit of a certain amount of money into a savings account. Your credit limit depends on the percentage of the deposited amount. This deposit works as collateral for the lenders. Moreover, you cannot use these funds to make other regular payments.

Benefits of secured credit cards for people with bad credit:

• Easier approval as risk for the lender is less
• Lower APR in comparison to the most unsecured cards for bad credit

Drawbacks of secured credit cards for people with bad credit:

• Needs a high-security deposit
• Low credit limits, which make it difficult to maintain a low utilization ratio

#2. Unsecured credit cards

Most credit cards are unsecured credit cards. An unsecured credit card requires no deposit. It simply works on the basis of revolving credit.

Revolving credit is basically a line of credit where the customer needs to pay a commitment fee to achieve credit limit. The customer can use this credit limit when it is needed.

Benefits of unsecured credit cards for people with bad credit:

• Higher credit limits
• No security deposit

Drawbacks of unsecured credit cards for people with bad credit:

• High annual fees
• High-interest rates
• Monthly maintenance fees