Have you had poor credit in the past? Made a few mistakes, wish you’d done things a bit differently?
Well, all is not lost — you can rebuild your credit just like you lost it. It’s simple, and if you’re disciplined, it’s quick and almost painless.
First, what is a Credit Card? The normal procedure is that you deposit an amount of money into a savings account which is in turn security for the Credit Card you apply for. Then, you can use the credit card just as though it were a “normal” (unsecured) card, and when you make your payments on time, you are building your new credit history. It’s a good idea to use this card for regular expenses that you’d normally pay cash for; then using that cash to pay the credit card bill. This shows the credit card issuer that you are responsible and can pay your bills on time. It obviously takes a bit of self-discipline to do this, however; if you’re not good with handling money that may present a problem for you. But practise, as in all things, makes perfect.
Generally, you will find there are application fees and other fees not usually associated with regular credit cards when you try to get a secured credit card.
Some secured credit card programs will allow you to deposit additional monies into your security savings account, thereby increasing your credit limit. Check before applying for a credit card on this. Again, read the fine print! It’s important.
Many institutions, after a period of having made all your payments on time, will release your security deposit to you, thus graduating your card to an unsecured status. Congratulations if this happens to you!
You can build your credit even faster by getting more than one secured card at a time; just make sure that you stagger your opening of these accounts by a month or so each, otherwise you may run the risk of being rejected, and thus harming your credit score again.
After you’ve established credit using a credit card, you will most likely start to notice the amount of low APR credit card deals being offered to you. Make sure you read the fine print, as always, and carefully choose which offers you sign up for.
Different banks and credit card companies have differing amounts that they are willing to allow you to secure; and they all have different procedures, get the one most suited to you.
About the Author: Peter Carville
“You can rebuild your credit just like you lost it. It’s simple, and if you’re disciplined, it’s quick and almost painless. ”
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