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Secured credit is an excellent way to rebuild your credit and improve credit scores. The credit
card or bank loan is backed by money you keep in a bank savings account. The security deposit
in the savings account will be earning interest. The amount of money you use to secure the
credit card cannot be used or withdrawn.
card or bank loan is backed by money you keep in a bank savings account. The security deposit
in the savings account will be earning interest. The amount of money you use to secure the
credit card cannot be used or withdrawn.
Piggyback Secured Credit Cards to Raise Your Credit Scores
by Lisa Phillips
updated December 2009
by Lisa Phillips
updated December 2009
Related Topics:
Step 2: Request a Cash Advance
Next, get a cash advance on the new secured credit card and take that cash and open another
secured credit card. Follow the same technique and get another cash advance, only this time
deposit the cash into a high interest bearing savings account. Earn More with a WTDirect saving
account. Features 1.21% APY. No Fees. FDIC Insured. Make sure it is a savings account you
can freely access. Use this savings account deposit to make payments on the two secured credit
card accounts. Usually after a year the bank will turn the credit card into an unsecured credit
card if your payments have been timely and your account is in good standing.
Step 3: Apply for a Secured Loan
Piggybacking can also apply to secured bank loans. If you have at least $500 cash on hand
apply for a bank loan secured by a savings account. The credit requirements are very easy to
qualify for as the loan is secured by the amount of your deposit. Most banks and credit unions
report secured bank loans to the major credit bureaus, Experian, Equifax and Transunion.
Bank loans rank high in credit scoring. You do not have to stop at just one secured loan. Once
you obtain the first secured loan, take those funds, go to another bank and repeat the process.
Now you have two bank loans that will report to the credit bureaus. Make sure these loans are
small enough that you can handle making at least two payments per secured loan before the
actual due dates. When the banks report to the credit bureaus they will show these payments
and you will have established an excellent payment history within (45) days of obtaining the loans.
Step 4: Have your new secured accounts report to the credit bureaus
Before obtaining any secured credit account, make sure the bank or credit card issuer does the
following:
Avoid any secured credit card account or secured bank loan that does not adhere to the above
three statements. They will not improve your credit scores unless they report to the credit
bureaus and report your limits.
Next, get a cash advance on the new secured credit card and take that cash and open another
secured credit card. Follow the same technique and get another cash advance, only this time
deposit the cash into a high interest bearing savings account. Earn More with a WTDirect saving
account. Features 1.21% APY. No Fees. FDIC Insured. Make sure it is a savings account you
can freely access. Use this savings account deposit to make payments on the two secured credit
card accounts. Usually after a year the bank will turn the credit card into an unsecured credit
card if your payments have been timely and your account is in good standing.
Step 3: Apply for a Secured Loan
Piggybacking can also apply to secured bank loans. If you have at least $500 cash on hand
apply for a bank loan secured by a savings account. The credit requirements are very easy to
qualify for as the loan is secured by the amount of your deposit. Most banks and credit unions
report secured bank loans to the major credit bureaus, Experian, Equifax and Transunion.
Bank loans rank high in credit scoring. You do not have to stop at just one secured loan. Once
you obtain the first secured loan, take those funds, go to another bank and repeat the process.
Now you have two bank loans that will report to the credit bureaus. Make sure these loans are
small enough that you can handle making at least two payments per secured loan before the
actual due dates. When the banks report to the credit bureaus they will show these payments
and you will have established an excellent payment history within (45) days of obtaining the loans.
Step 4: Have your new secured accounts report to the credit bureaus
Before obtaining any secured credit account, make sure the bank or credit card issuer does the
following:
- Reports the account to the three major credit reporting agencies, Experian, Equifax and
Transunion
- Reports the limit as well as the balance
- Does not report that the account is secured, it should only report that it is a credit line. The
credit reporting agencies may ding you if the account is reported as secured
Avoid any secured credit card account or secured bank loan that does not adhere to the above
three statements. They will not improve your credit scores unless they report to the credit
bureaus and report your limits.
Step 1: Apply for a Secured Credit Card
If you have a little extra cash on hand try the method of piggybacking to establish a good credit
and payment history. First, open a secured credit card at your bank, credit union or other credit
card issuer such as a Public Savings Bank Classic Secured Visa® Credit Card helps build your
credit history at all the major credit bureaus – with no annual fee or monthly maintenance fees.
If you have a little extra cash on hand try the method of piggybacking to establish a good credit
and payment history. First, open a secured credit card at your bank, credit union or other credit
card issuer such as a Public Savings Bank Classic Secured Visa® Credit Card helps build your
credit history at all the major credit bureaus – with no annual fee or monthly maintenance fees.
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