Yutong Xie, Assistant Professor of Finance, was featured in WalletHub’s August 2025 article, “Best Credit Cards for Bad Credit.”
How can people improve their credit scores using a credit card for bad credit?
Using a credit card responsibly can help rebuild credit over time. The key is consistent on-time payments, as payment history accounts for the largest share of a credit score. Keeping credit utilization low—generally below 30% of the available limit—is also critical. It is equally important to avoid applying for multiple new credit accounts in a short period, as frequent credit inquiries can temporarily lower scores. Over several months, these habits can lead to gradual but meaningful improvements in a credit score.
How should people decide between a secured and an unsecured credit card for bad credit?
The choice depends on the individual’s financial circumstances and discipline. Secured credit cards, which require a refundable security deposit, are often easier to qualify for and help build credit with lower risk to lenders. They are ideal for those with severely damaged credit or little credit history. Unsecured credit cards for bad credit may be more convenient, but they often carry higher fees and interest rates. Individuals who can qualify and are confident in their ability to manage payments responsibly may opt for unsecured cards to avoid tying up cash in a deposit. However, for most people rebuilding credit, a secured card is a safer starting point.