The best way to repair bad credit is with a credit card for bad credit which is usually a secured credit card. The type of card usually requires you to pre-load the card with funding and the amount you load is what you can spend. Many secured credit card companies will report to credit agencies. This makes this card a glorious opportunity for establishing credit when your overall credit score is very low.
If you have poor credit it's obviously due to not paying your bills and once it goes to collections it will stay on your credit report from 3 to 10 years (Stature Of Limitation) depending where you live. The average is around 7 years. Once the Stature Of Limitation has expired the creditor is barred from taking any legal action against you. They can still attempt to collect the debt, but since they can't sue you there is little they can do. The best thing to do is arrange a payment plain you can afford and start to pay it back and at the same time rebuild your credit score with a prepaid credit card.
When a credit company investigates your credit report and finds that you have a ton of negative results listed, you've not held employment for an extended quantity of time, or have moved to various areas quite frequently. They will read you as a high risk, therefore, you will probably be denied any type of credit limit with a credit card that is offered with that company unless it's prepaid.
Secured cards allow you to pre-load funds from $200 to $1000. You don't really have to worry about approval since they are not lending you the money, it's your money you are spending. This makes it very easy for you to start rebuilding your credit fast.
After a few months, you should be able to see improvement in your credit standing. It's a good idea to check your credit report after six months of using your secured credit card. If your credit score is really low you might have to continue to use your prepaid/secured credit card for 12 months or longer. The good news is you will be rewarded for your effort at repairing your credit score.
You last choice to repair a bad credit score would be to forget credit cards entirely and open a checking account and use debit cards, that act some what like credit cards as so much as convenience, in which you'll use to make purchases. Debit cards are used in place of checks. Instead of writing a check to create a purchase, or pay a bill, you can merely use the debit card instead. Some debit cards operate in a way that is considered credit. However, you'll only be able to pay what's obtainable through your checking account. Make sure you limit your use of an overdraft as this looks just like bad credit when it's used often.