Many people struggle with a bad credit score for different reasons. If you are in the same situation, is there an easy way to improve your credit score?
Yes, there is! A secured credit card can help you start rebuilding your credit score and get you back on track to having a great credit score!
What is a secured credit card?
A secured credit card is a type of account offered to customers with no or bad credit. They are meant to be “credit builders”. Many of them don’t even credit check which is why they are also called guaranteed approval credit cards or instant approval credit cards. Because everyone gets approved. As long as you can put down the security card, you can get one of these credit cards. This gives secured cardholders the chance to use a credit card and the opportunity to rebuild their credit history.
Just like a regular card, a secured credit card can be used for shopping at malls, groceries, diners, boutiques, gas stations and other establishments. It can be used for making purchases from the internet as well. Secured cards are accepted anywhere unsecured credit cards are accepted. In addition, no one has to know that you are using a secured card because they look just like any other credit card.
How Are Secured Credit Cards Different From Unsecured Credit Cards
Unlike a regular credit card, that issues you a credit limit once you are approved. A secured credit cards limit will be the same amount that you put down as your security deposit. Most of the secured credit cards will give you 100% of your deposit as your credit limit.
How To Use A Secured Credit Card To Rebuild Your Credit
- The low security deposit required to get one makes this a viable option for anyone who needs to rebuild their credit.
- They will report to the credit bureaus. On this site, all our secured credit cards will report to all 3 bureaus. There is NO POINT in getting a secured credit card to rebuild your credit if it doesn’t report to at least 1 credit reporting agency!
- Choose a secured credit card that will let you add additional funds to it. Not only will this increase your credit limit but it will help you build comparable credit.
- Usually, within 2 years of consistent on time payments, your secured credit card will become UNSECURED!. Which means you get all the money you put down as security back! If you have been adding to your security deposit you may get a nice large check back! What a great way to jump start your saving account!
Be a Wise Secured Cardholder
To successfully use a secured credit card for rebuilding credit, keep your spending minimal. This way, you can be sure to pay off your balance in full each month. Paying off your credit cards fully at the end of the month is a good habit to form!
Also never pay late. Your credit score will take a big hit each time you are late. This is an opportunity for you to “start over” and build a strong credit score. So practice good credit habits!