Secured Credit Cards To Improve Scores To Qualify For Mortgage

This BLOG On  Secured Credit Cards To Improve Scores To Qualify For Mortgage Was UPDATED And PUBLISHED On August 1st, 2020

Borrowers who are planning on getting a purchase mortgage loan or a refinance mortgage loan with prior bad credit can now qualify for home loans. Mortgage loan applicants with a prior bankruptcy, foreclosure, or charge offs and low credit scores can improve and boost their credit scores with secured credit cards.

  • Depending on how low credit scores are, a secured credit card can boost credit scores by 20 points to 50 points
  • The ideal amount of secured credit cards to have is 3 secured credit cards with at least $500 credit limits
  • Three secured credit cards can boost credit scores by 100 points or more in many cases

In this article, we will cover and discuss the use of Secured Cards To Improve Scores To Qualify For Mortgage.

Why Secured Credit Cards?

Why Secured Credit Cards?

Why secured credit cards?

  • The reason being is that it is pretty difficult to get an unsecured credit card with bad credit
  • Most unsecured credit card companies will require that credit scores be at least 700 FICO or higher
  • Consumers would eventually want to get unsecured credit cards

But the best ticket for an unsecured credit card approval is via the secured card means.

Optimizing Credit Scores With Secured Cards

Why three secured cards?

  • The first credit card with boost credit scores by 20 to 50 points
  • The second secured credit card will probably boost it by 15 to 30 points
  • The third secured card will probably boost credit scores by 10 to 20 points
  • The fourth or fifth secured card will probably have a 5 to 10 point boost if that

Three secured credit cards is the magic number.

How Many Secured Cards Should I Get?

How Many Secured Cards Should I Get?

I strongly recommend that you get a $500 credit limit or higher credit card and use it periodically but never pay the balance to zero.

  • Always leave a $10 dollar balance on all credit cards
  • Way to optimize the maximum effect on each credit card is by having an available balance factor
  • For example,  a $1,000 credit limit credit card and had a balance of $900, the factor is 0.90
  • This available balance factor is derived by dividing the $900 credit card balance by the $1,000 credit limit
  • However, if the credit card balance is only $100, then the factor is 0.10
  • The credit balance of $900 divided by the credit limit of $1,000, yields the 0.10 factor
  • The lower the factor, the higher the credit score
  • However, if there was a zero balance, the factor will be zero
  • Anything divided into zero yields a zero
  • There needs to be a number

The smaller the better, as a factor to optimize credit score.

What Cards Are Recommended?

Consumers can search on Google for secured cards.

  • Make sure that the secured card company report payment history to all three credit reporting agencies; Transunion, Equifax, and Experian
  • Three secured cards with $500 credit limits are the key to having great credit and re-establishing credit to qualify for mortgages

For more information about this article and/or other mortgage-related topics, please contact us at Gustan Cho Associates at 262-716-8161 or text us for a faster response. Or email us at The team at GCA Mortgage Group is available 7 days a week, evenings, weekends, and holidays. Gustan Cho Associates is a five-star national mortgage company licensed in multiple states with no lender overlays on government and conventional loans.

Related> How Can I Improve My Low Credit Scores

Related> Improving Credit Scores

  1. Ronald Kelly

    Before the COVID-19 pandemic my wife and I were looking to purchase a house with my VA benefits. Since, I was told that the credit requirement is a 640 score but I am currently at 586. So I am now in the process of trying to find a lender that will work with an individual with a fair credit score.

  2. Heather Candlestick

    Good afternoon,

    I loved reading your article about becoming an MLO with bad credit. I have been divorced and usually a stay-at-home mom so many of the items on my credit report I relied on income from someone else. In February I signed up to take the 20-hour course. I finished it. Then a week ago I paid for some training/study materials that guaranteed me to pass the test. On Wednesday, I took the test and passed. I was impatient and wanted to get my license so I searched all the states that I could to see which didn’t require extra hours (money), I found Iowa which also allowed “approved-inactive.”

    I would love to join your team if you are still looking to add MLOs.

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