Secured credit cards to improve your credit
Having no credit can translate into poor credit. Many Americans are puzzled why they have such poor credit scores year after year when they work very hard and pay their bills on time.
Home Loan with Bad Credit
Paying your rent, utilities, cell phone bill, and cable bills on time does not help in building your credit profile, unfortunately. Credit scores are derived by the creditor reporting your credit payment history. Creditors who report your payment history include mortgage lenders, automobile lenders, credit card companies, and installment loan creditors. One way of increasing your credit scores is to have a creditor who will report your credit reporting history to the three credit reporting agencies which are Experian, Equifax, and Transunion.
Secured credit cards best way to re-establish your credit
If you have low credit scores and want to establish your credit because you are planning on buying a home in the near future, you need to start to establish your credit by having a few creditors report your payment history. The best and quickest way for you to establish credit is by getting a few secured credit cards. A secured credit card is like a normal unsecured credit card but the credit card company requires you to put down a deposit. For example, if you open up a $500 account with a secured credit card company, you will have a credit line of up to $500 to charge on anything you want up to that credit limit.
How to get secured credit cards
The secured credit card company will charge you a nominal application fee and will charge you interest on the balance on the credit card every month. When you get a secured credit card, make sure that you always leave a $10 balance on your credit card every month. Having a zero balance on your secured credit card will not maximize your credit scores but leaving a small balance will. Never maximize your secure credit card because the available credit available is another factor of maximizing your credit scores.
How many secured credit cards should I get for maximum effect?
Try to get 3 secured credit card with $500 credit limits. Each secured credit card should boost your credit scores by at least 20 to 30 FICO points. If you follow the above advise, your credit scores should increase close to 100 points. Make sure the secured credit card you get reports it to all three credit reporting agencies.