If your credit score is in the ditch, there are a number of reasons why you may want to rebuild it. Perhaps you are looking to make a major purchase, such as a home or a vehicle, or you may need to obtain a credit card for something as simple as a car rental. Regardless of the situation, raising your credit score can be very difficult and time-consuming if not done properly.

Although a secured credit card may seem like a simple way to start rebuilding a damaged credit score, is it the best option available? Well, the answer to this question depends on your unique financial situation, and there are a few factors that can help you determine if it will best suit your needs.

What to Consider

Before applying for any secured credit card, carefully review the terms and conditions of the particular card to determine your eligibility. Some credit issuers will only offer secured credit cards to those without a credit history, and not to those who are seeking a second chance at rebuilding their damaged credit.

Fees and Interest: Some cards are accompanied by an annual, activation and monthly maintenance fee, which can end up costing you more than the card is worth and absorbing a substantial amount of your available balance before you even have a chance to make a purchase. This is problematic if you do not have the means to quickly reduce the outstanding debt balance, because it could give you a high debt to available credit ratio, which could have an adverse effect on your credit scores. To avoid this pitfall, select a secured card that requires little to no fees to acquire and maintain.

Reporting Practices: In order for your score to be impacted by a secured credit card, the credit issuer must routinely report activity to each of the major credit bureaus — Equifax, Experian and TransUnion. This serves as proof that you are responsibly handling your debt.

Other Ways to Rebuild Credit

A secured credit card can be the pathway to better credit if you choose the right card for you, and you use it responsibly. However, there are other factors that affect your credit, and if any of these issues apply to your credit situation, these steps can help you if you’re looking to rebuild.

Also, as you work to rebuild your credit, it can be helpful to track your progress by monitoring your credit scores. You can do this for free using a tool like Credit.com’s Credit Report Card, which updates your credit scores every month, and gives you an overview of your credit profile so you can see which areas of your credit need help.

Dispute Inaccurate Information: Start by obtaining your free credit reports. If you notice any inaccurate information after reviewing them, immediately file a dispute online or via certified mail with one of the major credit bureaus. They must notify the other two credit bureaus and respond to your dispute within 30 days. If you win your dispute, the errors must be removed immediately from your credit file; this can have a positive effect on your credit score. On the other hand, if the creditor does not rule in your favor, request that a note be placed in your file that details the dispute.