When your credit rating has been dealt a severe blow, there is no magical remedy to nurse it back to health. However, rehabilitation of bad credit can be achieved through the application of self-help principles and the utilization of credit card-dependent measures. With discipline, determination and patience, consumers mired in debt can overcome a poor credit history and repair bad credit. A number of effective strategies to erase bad credit are available to debtors:

1. Secured credit cards

Also known as prepaid debit cards, secured credit cards operate very much like ordinary credit cards. The main distinction is that, with the former, consumers are required to deposit funds into the credit card account prior to using the card to purchase items. The deposit serves as security for the lender in the event that the cardholder defaults on his or her payments. Applicants may not exceed the monetary sum they deposit into the secured credit card account. Typically, the credit limit ranges from 50 to 100% of the amount deposited.

Prior to applying for a prepaid debit card, debtors should ensure that the lender reports to the three leading credit bureaus, so that 1) the positive changes are reflected in consumers’ credit reports and scores and 2) future creditors will be able to see the payment history. Consumers can fix bad credit by using their prepaid debit cards to make small purchases and paying off in full their monthly bills.

2. Bad-credit credit cards

Debtors can erase bad credit by obtaining an unsecured credit-building credit card. A number of companies issue cards specially designed for credit-challenged consumers, making it possible for them to turn their credit around. Borrowers utilize bad-credit credit cards in the same way they would a normal credit card. Provided that they pay their invoices in a timely manner, cardholders can build a positive credit history with each purchase they make. A positive boost in their credit rating usually appears within 3-6 months. To multiply the chances of credit repair, consumers can apply for several bad-credit credit cards.

3. Bad credit debt consolidation

Another widely-used method to repair bad credit involves consolidating all existing, unpaid credit card bills. High-interest credit card debt can be paid off by way of a bad credit consolidation loan. The various credit card balances are lumped into one bill. Borrowers who apply for bad credit debt consolidation benefit from lower interest rates than those commanded by the credit card companies. Through bad credit debt consolidation, consumers with outstanding balances on several high-interest credit cards will obtain a single low interest loan for the total sum owed. They can take advantage of extended and low monthly payments, and the savings reaped from the disparity in interest rates can be applied toward payment of the credit card balances. With bad credit debt consolidation, the debtor makes only one manageable monthly installment. This avoids the confusion generated by multiple cards and forgetfulness on the part of a cardholder to pay his or her bills. Consumers seeking to increase their credit score and fix bad credit will find bad credit debt consolidation to be an extremely effective tool.

4. Negotiation with creditors

Debtors may also contact their credit card companies and request a lower interest rate. Many lenders are willing to do so, and such an interest rate reduction helps borrowers pay off their outstanding debt much faster, which in turn enables them to repair bad credit.