| Rebuild Bad Credit Securely |
| By Credit Federal |
Published
07/4/2008
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Credit Report
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Secured Credit Cards Securely Build And Rebuild Bad Credit Scores
Apply for a secured credit card.
If you have no credit history or you've had financial shortcomings that damaged your score and resulted in a bad credit rating, your credit options may be limited. If it's damaged too severely, you might not even get approval for an unsecured credit card, or you may get approved for a low credit limit unsecured card that will cost you more in fees than the total line of credit.
What do you do? You can still get a credit card to rebuild credit... by using a secured credit card that reports to at least one major credit bureau.
Not only can you get easy approval, you'll also avoid high interest rates that will rack up debt quickly, and you won't have the ability to charge more than you can afford.
The credit limit on a secured credit card is usually 50% to 100% of your deposit balance. If; for example, you make a $500 deposit on a secured card, your credit limit will be between $250 and $500, depending upon the issuer's terms and conditions.
Secured credit cards usually do have fees that unsecured credit cards do not, such as an application fee, processing fee and annual fee. Stay away from secured cards with high fees that can greatly reduce your deposit balance and ultimately your credit limit.
How does a secured credit card help build or rebuild credit?
Most damaged credit is due to poor payment habits. If you obtain a secured credit card (one that reports to at least one credit bureau) and you use it to pay bills, your deposit transactions will be listed on your credit report.
Bonus Reward: Try to get a secured card from a credit card company that also offers unsecured credit card upgrades. That way, once you have proven your new creditworthiness, the issuer will likely offer you an unsecured credit card to replace your secured card. Even if the issuer doesn't offer upgrades; or declines to offer you an unsecured card, once you've proven your creditworthiness with the secured card you can apply for an unsecured credit card with another company.
Don't repeatedly apply for credit cards after you've had an application denied. This makes you look desperate for credit. Instead, continue making timely payments on your secured card and apply again within six months.
View secured and popular unsecured credit card offers.
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