Are credit cards good or bad for you?

Clients come to me all the time and tell me that they are "cleaning up their credit". My next question is always, HOW? Often they tell me they are paying down bad debt, settling collections, and disputing wrongful collections.

Don't get me wrong, these are all good things to do for someone to greatly improve their credit. But there is one big problem that they are over-looking, these people still do not have any GOOD items on their credit to off set the past issues.

The number ONE thing that a buyer should do to repair their credit is add GOOD trade lines to their credit report to prove to lenders that they are credit worthy individuals.

I suggest a SECURED CREDIT CARD. This is a credit card with training wheels. It is designed to give credit cards to people that would normally get turned down for having bad credit. The borrower has to put down anywhere from $99 - $300 and in return they receive a credit card with a small credit limit. After 12 months of making payments on time, the borrower will get the money they put down back and the card becomes unsecurred.

What this credit card will do is create a history of making payments on time which will greatly increase a buyer's credit score.