Credit Building Strategies for Arizona Consumers with Bad Credit and Low Credit Card Spending Limits

How can consumers with low credit card spending limits rebuild their bad credit scores?

For Arizona consumers who are trying to rebuild low credit scores, there’s good news and bad news. Right now, it’s a little easier for consumers with subprime credit to qualify for credit cards, but these cards are typically attached to smaller spending limits. This may help consumers by making it harder to accumulate vast amounts of credit card debt. However, it also means that subprime cardholders in Arizona will have to be more cautious with credit card spending. You see, part of your credit score depends on how much of your available credit you’re using at a certain time. So if you only have a small amount of available credit, your credit card balances should be much, much smaller.

Why Arizona Residents Working to Repair Bad Credit Scores Must Exercise Restraint when Using Credit Cards

When your credit score calculates, your credit utilization rate (CUR) matters. Your CUR refers to how much of your available credit you’re using at any given time. Most credit experts recommend that consumers keep their CUR at 30% or less. This can be tough for Arizona credit card holders with spending limits as low as $300-$500.

If your only credit card has a spending limit of $500, ideally, your balance on that card should never top $150. This means that if you do charge $150 to the card, you should pay off the balance.  This way the interest charges don’t increase the amount of credit that you’re using. It’s very disheartening to be faithfully paying your credit card bill every month only to see your credit score fall because your CUR is too high.

Eventually, after you’ve successfully managed a credit card account for several months, you should be able to increase the size of your spending limit. This will give you a little more wiggle room keeping your utilization rate where it should be. In the meantime, though, you should be using your credit card strategically and treating it like the credit building tool that it is.

A good strategy is to pick one bill or recurring expense to pay with your credit card. If you don’t use the card for anything else and pay the balance off each month. You will gradually build your credit without having to worry about incurring debt or interest charges. If you’re like most Arizonians, you own a car that needs regular gasoline fill-ups. Why not use your credit card to pay for gas purchases? This way you’ll help your credit score and track how much you’re spending on fuel every month.

Another Way for Arizona Consumers to Give their Credit Scores a Boost

If your credit score seems low, your CUR or errors on your credit report might be to blame. Many Arizona consumers don’t realize that about 80% of credit reports contain errors of some type. Finding these inaccuracies, disputing them with the credit bureaus, and having the mistakes removed can instantly improve your credit score.

This is one of the reasons why you should regularly check your credit reports from the three major credit bureaus. The Fair and Accurate Credit Transactions Act (FACTA) entitles you to one free copy of your credit report from TransUnion, Experian, and Equifax. To get your credit reports, you can either go to each credit bureau’s website or simply visit www.annualcreditreport.com to request all three with one form. It’s important to keep tabs on all of your credit reports. Each credit bureau may receive different information about your credit activity. Therefore, if you only check one credit report, you could miss potential errors on the other two.

Arizona residents who find errors on any of their credit reports can get a FREE credit repair lawyer to help them with the disputing process, which can be confusing and time-consuming. At Credit Repair Lawyers of America, we successfully deal with the credit bureaus every day, and we work under the Fair Credit Reporting Act (FCRA) to ensure that the rights of Arizona consumers are protected.

How Arizonians can Get a Free Credit Repair Lawyer

Don’t let errors on your credit reports bring your credit score down. At Credit Repair Lawyers of America, 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 (480)771-6001 or contact us on our contact page.