If you’re looking to apply for a mortgage or automotive loan, it helps to have a clean credit score. If you do not, you will find credit repair steps you can take. Although it can be expensive, using a secured credit card with an original deposit requirement can help rebuild a credit rating so that large-scale loans are no longer out of reach. Here are some things to consider before applying for a secured credit card.
How to work a secured charge card
Getting a secured credit card is not too difficult. Get an active savings account as collateral before this though. The secured credit will have a limit typically of the amount that is in the savings account. It could be smaller though. The issuer of the card will take money out if you are delinquent. You have to be 30 to 60 days delinquent though. Once bills on the secured credit card are paid on time for six months to a year, the credit rating may have recovered enough to where unsecured charge card choices that require no upfront collateral become accessible.
Requirements for issuer to report
If the issuer of your secured credit card does not file with the major credit reporting agencies, the card can’t help you. Making payments on time is essential to credit. It will rebuild your credit quickly. Keep in mind that a secured charge card will have an rate of interest and grace period, so it pays to shop around for the best terms. You can go to bankrate.com for help. This can help compare your choices. You might have a savings account that earns lots of interest. In this case, you will be well on your way to fixing credit.
The fees that are there
Two major but often unavoidable drawbacks to secured charge cards are upfront and annual charges. An annual fee will not be too terrible since a secured credit card won't be something you'll need forever although the upfront charges of $100 or more could be hard. It is possible to get a card without upfront fees. This can be something only many people with specific credit ratings will qualify for though.
Every month, keep away from using the secured credit card more than necessary. You’ll want to spend less than 30 percent of the credit limit each month while paying the balance each month in full can help.
Articles cited
Bank Rate
bankrate.com/funnel/credit-cards/credit-card-results.aspx?classificationuid=13&childcategoryid=837&childcategory=Secured%20Cards
Fox Business
foxbusiness.com/personal-finance/2011/02/22/secured-credit-cards-6-tips-applying-using/
Rebuilding credit can be an expensive path
youtube.com/watch?v=kSHKw3-5Ne0
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