Using A Secured Credit Card To Rebuild Your Credit?
In this post, we will give you some piece of advice to help you improve your credit score by using a secured credit card. This method can easily be used by people with a credit score in the 300 – 500 range.
Here is a frequently asked question on this topic:
Q: I’m very interested in purchasing a new car. Unfortunately, my credit score is very poor. I know I need to add some positive things to my credit report, but I can’t get any credit. How can I build credit if I can’t get any credit in the first place?
A: Building better credit can be tricky. If your credit is poor, it can be difficult to obtain loans or get a credit card so you can boost your credit score. The solution is to get a secured credit card.
Unlike a common credit card, a secured credit card is secured with your own money, so it’s like you’re just making a loan to yourself. The financial institution issuing the card has no exposure, since they aren’t using their money. The best part is that no one can tell that the card is secured, not even the credit bureaus that do the reporting.
Secured credit cards are easy to get, but there are a few things to keep in mind:
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All secured credit cards are not created equal. Secured cards have different interest rates and fees. There are also different minimums required to open the account. Some even charge an application fee. Look around for your best deal. |
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Ensure the account will be reported to all three major credit bureaus. If the card issuer doesn’t report your account, the card will have no impact on your credit. |
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You can actually earn interest on your opening deposit. Avoid getting too excited! The amount of money is only comparable to the interest on a savings account at your local bank. |
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Use the card and pay it off in full each month. You’ll be charged interest for any unpaid balance. Show future creditors that you pay your bills on time. Never be late! |
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Consider getting more than one card. The more good credit you can accumulate, the faster your credit score will rise. If you can afford to carry two or more cards, it would be a great idea. |
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Refrain from keeping the card longer than necessary. The fees and interest rates are higher than they are on regular, unsecured cards. Plus, you have your money tied up in the card that could be put to better use. Move to an unsecured card as soon as you’re able. |
A secured card can be an easy way to add positive information to your credit history. If you can’t get an unsecured card, this is a great alternative.
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