Rebuild credit with secured credit cards. Secured credit can help you rebuild credit and get you on track to a good credit score. Credit cards, if managed well, can be a great way to build a solid credit history and improve scores.
Credit cards give you a means to establish a good payment history. Payment history is imperative to having good credit as it accounts for 35% of your overall credit score.
Secured credit cards are a perfect answer for consumers who are unable to qualify for unsecured credit cards. A secured credit card may be the only method to establish or re-establish credit.
A secured credit card is a major credit card that requires a cash deposit to secure the credit line for that account. If you deposit $500 in the FDIC-insured account; you can charge up to $500. The deposit also acts as a guarantee the credit card issuer will be protected if you are unable to make your payments.
Consumers with bad credit should engage in credit repair and debt management in order to rebuild credit. But this alone will not help rebuild credit. If you want to improve your credit score and rebuild credit, you need current positive credit reporting in your credit files. Secured credit cards will give your credit report open, active revolving credit lines on your credit reports. This will give you the opportunity to show you handle credit responsibly. Managing credit responsibly will re-establish credit history and improve scores.
Secured credit cards must be managed the same as unsecured credit cards. Just because you have secured the credit card with a deposit, does not mean you can skip payments or make late payments. Late payments on a secured credit card will have the same negative effect as regular, unsecured credit cards.
Top 3 Management Tips for Secured Cards:
- Keep your account balances low. This means whatever your credit limit, do not charge over 30% of the available limit. The only exception is that you pay your balance in full each month.
- Avoid late payments at all costs. Late payments will be reported to the credit bureaus in the same manner a late payment on an unsecured credit card would be reported.
- Use your credit card at least once a month. Rebuilding credit requires you actively use credit as well as timely repay credit obligations. Even if you only make a small purchase each month and pay it in full; this counts as using your credit card and will help rebuild credit
First, get a few secured credit cards. Second, make small purchases. Third, pay the account in full or at least pay more than the minimum payment, on time, every month.
By simply adding new revolving credit your credit scores will get an immediate bump up. Having several revolving lines of credit such as secured credit cards is going to allow you to raise your credit scores quickly.
Making timely payments on several secured credit cards along with keeping account balances low will quickly raise your credit scores.
There are several types of secured credit cards. Consumers with poor credit are often marketed secured credit cards that come with high fees. Stay away from fee-laiden credit cards, they may do more damage to your credit. You want a secured credit card with the following features:
- No application fee and a low annual fee
- FDIC-Insured Savings Account for your security deposit.
- Reports monthly to the major credit bureaus just like an unsecured credit card
- Allows you to convert or apply for an unsecured credit card after 9 to 12 months of on-time payments and good account management
First Progress Platinum Prestige MasterCard® Secured Credit Card
The First Progress Platinum Prestige MasterCard® Secured Credit Card requires no credit history or minimum credit score for approval. It is a full-feature platinum MasterCard® good for car rental, hotels and anywhere MasterCard® is accepted. Monthly reporting to all 3 major credit bureaus. The card is secured by an FDIC-insured deposit of $300 to $2,000. Complete the online application now!
For consumers that want a high limit secured card, the UNITY Visa Secured Credit Card from One United Bank is the right choice. Cardholders can choose their credit limit from $250 to $10,000 with an FDIC-insured security deposit. Cardholders enjoy an introductory rate of 9.95% for the first 6 months then a competitive fixed rate of 17.99%. Monthly reporting to all three major credit bureaus (TransUnion, Experian, Equifax) is provided to help rebuild credit.
USAA membership is reserved for the members of the military, veterans who honorably served and their eligible family members. Build your credit score with on-time payments reported to all 3 major credit bureaus. You’ll be opening a USAA Bank 2-year Certificate of Deposit (CD) for the money used as the security deposit. Your deposit is guaranteed to grow. The card’s credit limit is the money you put in upfront, starting at a minimum of $250 up to $5,000. Start building your credit today.
USAA membership is reserved for the members of the military, veterans who honorably served and their eligible family members. Enjoy a fresh start with the USAA Secured Credit Card. If you’ve had past credit problems you are welcome to apply. Improve credit scores with on-time payments. An interest earning USAA 2-Year Variable Rate CD will be used as a security deposit. The money you put in upfront, from $250 to $5,000, is the card’s credit limit. Start building your credit today.