The power of secured credit cards to rebuild your credit
If you have bad credit, you will experience a difficult time in obtaining new credit. A bankruptcy and/or a foreclosure can wipe 200 points or more off your credit score. Late payments will cause your credit scores to plummet the following month. Too many credit inquiries will also drop your credit scores dramatically. A poor credit score can cause you a job because many employers check an applicant’s credit score as part of the employment application process. A low credit score can also cost you more in insurance premiums. All insurance companies run an insurance credit report when issuing an insurance policy to their insurance prospects and the insurance credit score is part of what determines the premium you will pay for your homeowners insurance, auto insurance, health insurance, and life insurance. People with bad credit can start rebuilding their credit and start improving their credit scores by the use of secured credit cards.
Re-establishing your credit with secured credit cards
Creditors are not willing to extend credit to people who have bad credit or no credit. Whenever you apply for credit, it shows up as an inquiry on your credit report. Multiple inquiries are not viewed favorably to creditors. If you get rejected by half a dozen unsecured credit card companies, stop applying for them because the chances of you getting an unsecured credit card approved is next to impossible. Plus the many inquiries that is posted on your credit report will worsen your credit score than it already is. You only hope to start your credit rebuilding process is to get three secured credit cards.
Secured Credit Cards report to three credit bureaus
Secured credit cards is an excellent way of rebuilding your credit. You need to put down a cash deposit with a secured credit card company. Make sure the secured credit cards you get reports to the three major credit reporting agencies. I strongly recommend that you get three, $500 limit, secured credit cards. By utilizing your three secured credit cards, you can pretty much bank that your credit scores will improve at least 20 to 30 points per secured credit card.
Make sure secured credit cards report to all three credit reporting agencies
Shopping for secured credit cards is shopping for anything else. Try to get the best deal for your money. All secured credit cards will charge an annual fee and the interest rates are normally higher than unsecured credit cards although you have a deposit with the secured credit card company. Many secured credit cards also charge an application fee and some are much more than others. There are some secured credit cards that have no application fees so see if you can get one there as long as they report it to all of the three major credit reporting agencies. Always read the fine print so you do not get any unexpected surprises.
Use secured credit cards on regular basis
Once you get your secured credit cards, use them on a regular basis and make sure you pay the balances off every month and just leave a $10 dollar credit balance on each card. Always pay your monthly credit card bill on time and make a point to pay them early. You do not want to blow your credit again by being late on your secured credit card payment.
Start establishing credit tradelines with secured credit cards
Getting an unsecured credit card will be your ultimate goal. Once you established your credit with your three secured credit cards for about six months to a year, apply for an unsecured credit card. Apply for just one and the chances are you will get approved. Wait 90 days and apply for a second unsecured credit card and the chances are you will get your second unsecured credit card. Keep utlilizing both your secured credit cards and unsecured credit cards and make sure you are religious in paying your credit card bills on time. If you develop a good payment history and longevity with your secured credit cards, the credit card company will get you a credit limit increase without asking you for any additional deposit. If you develop timely payment history with your unsecured credit cards, the credit card company will consistently increase your credit limit.
If you have any questions in rebuilding your credit via the use of secured credit cards, contact me at www.gustancho.com .
Gustan Cho NMLS ID 873293
Secured credit cards easiest and fastest way of rebuilding your credit
Now, keep in mind that secured credit cards are just one element of fixing your credit. In fact, before adding new credit to your history, focus first and foremost on the all-important debt validation process.