Thu. Jan 27th, 2022
secured credit cards

Secured Credit Card Rebuild CreditHaving a secured credit card is a solid selection for those who are trying to rebuild their credit or start from scratch. You don’t need good credit, or even any credit at all to qualify. Which is why secured credit cards are the tool of choice of professional credit repair consultants.  These credit cards are very valuable tools in building credit.

raise your credit scoreI’ve been a credit analyst for nearly 20 years and boy has the industry changed!  20 years ago some people were aware of their credit score.  But it was still a time where most people had been taught if you can’t pay cash for it, leave it alone.  So building credit wasn’t a priority.

When you rented an apartment they did a credit check, but not as through, or credit score dependent as it is these days.  Employers didn’t pull your credit before hiring you.  Now these are all common place practices.  And most consumers are painfully aware of what their credit score is.  They know what a good credit score is and what a bad score is.  But while they may be up to date on common credit repair practices.  They have no idea how to start re-building your credit.

Listed here are three significant reasons as to why a secured card generally is a perfect option for you:

1. Poor Credit Score – No Problem

Having a poor credit score isn’t a barrier to obtaining one of these cards.  They are made specifically for people with bad or no credit.  Some of them don’t even check your credit which is why some people call them guaranteed approval credit cards.

2. Better Credit Limits

secured credit card the wise choice

With a secured credit card, your credit limit will equal the amount of your security deposit.  So the more you put down, the higher your credit limit.  This is is way better then the unsecured bad credit credit card offers.  Most of those cards will only give you a credit limit of $300-$500.  And they immediately put fees on those cards of more than 75% of the credit limit in some cases!  That you immediately have to pay if you want to have any available credit.  This practice will initially DROP your credit score until you pay off the fees. Once you have paid it down your score will go back up and continue to go up w/ responsible usage and on time payments

But the beauty of a secured credit card is that your security deposit will be RETURNED to you after 1- 2 years of good, timely payments. Unlike the unsecured cards where what you paid was a FEE and is gone forever.

Also with a secured card, SOME of the secured credit card companies will allow you to add additional money to your account.  So that you can build a large line of credit over time.  It can actually act as a savings account!  Some secured credit card companies will even pay YOU interest on the money you are using as security!

3. Credit Card to Rebuild Your Credit

Most secured credit cards will report to all 3 credit bureaus.  If you are trying to rebuild or build credit this is very important!  You don’t want a card that doesn’t report to at least 1 credit bureau. Many people look at these cards as a “second chance” credit card because they are what people use to rebuild their credit after they had some problems in the past. Getting a secured card is the first step to getting your credit score back to where it needs to be. As long as you are responsible with your new credit card, you should be able to take control of your credit score  and your overall financial welfare.

For a list of really great secured credit cards that you can apply for NOW.  Please click here!

By Elizabeth Roberts

Liz Roberts is a Sr. Credit Analyst with Horizon Funding Group Inc. She has been in the business credit industry for 23 years focusing on bad credit business owners and start up businesses. Her background is in consumer credit and collections prior to joining the Horizon team as a credit analyst and writer.

4 thoughts on “Secured Credit Card – Guidelines On How To Start Building Your Credit”
  1. I learned the hard way that everything we do in the US economy is tied to our credit score one way or another. Unfortunately I ruined my credit with the excess use of my credit line and I’m in a serious problem at the moment. For people like me the only option to get a credit is via secured credit card anyways, so it’s not like we have any other options. I’m not happy with the situation that I’m in, but at least there is a way to fix this mess.

  2. I’m finally free from all my past debts but my credit scores are far from where they were just 3 years ago. I spoke to several people about my situation and they all think a secured credit card is my best bet to repair my credit. I thought repairing my credit would be easy, because I thought I’d able to get a high limit secured credit card, but I know better now. I think this is going to be a slow process that will require me to be very patient.

  3. Hi Jeremiah,

    I’m glad you had your hopes on fixing your credit after you have ruined it in the past. Secured credit card is the type of card that can help you rebuild your credit indeed.

  4. Hi Claire,

    Glad you made it! Yes, secured credit card is the best tool for those who wants to repair their credit. Things may not be as easy as we think in repairing a bad credit but with the exact determination and will to do so, everything will fall into the right places at the right time.

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