Your credit score is essentially a tool that lenders, banks, and credit providers use to predict how you'll behave with money. The score is a number which represents your credit file and history.
So, if you don't have a long credit history or you've slipped up managing credit in the past then lenders/banks/credit providers might all decide that the risk is too high to lend you money when you really need it.
If this sounds like you, then you might want to consider a credit-building card to get things back on track.
First, assess your current situation
Why are you considering the product in the first place? If it's because you don't have a long credit history and your lack of experience is damaging your chances of securing credit - then things are pretty straight forward.
If it's because you've got a bad credit history after missing some repayments, then it's worth reflecting on whether you're now in a better position before you apply for a credit-building card. Spend some time building good budgeting and smart spending habits before pressing ahead.
You should also spend some time making sure that your credit report is spick and span, that all the information is correct and up-to-date. If you're not sure how to spot mistakes, then read our article on How to correct problems on your credit report.
Know what you're signing up for
The nature of these credit-building cards is to give an opportunity to people, who would ordinarily be refused credit, to prove they can manage keeping up with repayments. However, lenders aren't going to take the risk without putting some precautions in place.
This means these cards usually come with a low credit limit, and high interest rates.
The idea is to pay off in full every month
Provided that you pay off the total balance on the card every month when the bill lands, and you don't use the card to take cash out - then you won't be charged interest.
You could use the card to pay smaller regular bills like your phone bill. Paying this small amount off will be more achievable on a monthly basis, and provided you don't run into any problems - you should see a considerable improvement in your credit score after 6-12 months or so.
Beware of expensive 'credit repair' companies
There's an increasing number of companies out there claiming they've got the secret to getting your credit history back on track.
Truth be told, they're rarely offering you a solution that you can't find yourself. Most simply tell you how you can get a copy of your credit file, and some standard information on how to improve your score - there's no need to pay someone for this information because you can find it and take action yourself. The more risky of these use illegal methods to alter your credit score and you don't want to be associated with these, let alone pay for it.