Repair Bad Credit Through Secured Credit Cards
A credit score is used to determine a person's credit worthiness
. Let us say you are applying for a new credit card or a new loan, your credit score will affect the fees and interest rates the company will offer you.
It also plays a role when you are applying for a job, planning to lease an apartment or office space, etc. A good to excellent credit history will definitely help you in obtaining a more pleasant and positive impression or response.
However, just because a person has bad credit does not mean he/she is not a responsible individual. Aside from overspending, there are other possible reasons why people suffer from bad credit. Unavoidable circumstances and/or wrong decisions can be the culprit. As a famous adage says, "Everybody deserves second chances." This popular saying proves true for people suffering from bad credit. There are ways you can improve your credit rating. Secured Credit Cards for People With Bad Credit
One way of improving or rebuilding your credit score is to get a secured credit card. Some people are opposed to this idea thinking that getting another card may only lead to bigger debts. Let us get to know more about secured credit cards.
Just like a traditional card, a secured credit card can be used to make purchases or pay bills. By submitting timely payments, you can rebuild your score one step at a time. You are required to deposit a sum of money when applying for a secured credit card for this will serve as collateral of your purchases when you are a. In the event that you cannot make payments on time, the bank will use your deposit to pay off your debts. The amount you deposited acts as your credit limit.
Improve Your Credit Score
Be sure to submit your monthly payments on time and avoid exceeding your allotted credit limit. This will help you improve your credit rating. Most card companies offering secured credit cards report to the three major credit bureaus. Know how you are being scored and make an effort to improve all the factors that affect your credit score.
How to Apply for a Secured Credit Card
Most credit card companies have their own websites and offer online applications. This makes the application and approval process faster, easier and more convenient. You can also visit their office and talk to their representatives.
Is it worth getting a secured credit card if you have bad credit? Yes. Although you will be required a security deposit plus a plus a considerably higher interest rates and fees, there is no doubt that secured credit cards is an effective way to rebuild your credit history.
Note that the reason why most credit cards for bad credit come with higher fees and interest rates is because of the high risk involved. There are even credit card companies requiring you to pay application fees, processing fees and annual fees.Do your own research and compare all your possible options before choosing the credit company to deal with. Negotiate with your chosen credit card issuer for lower interest rates and fees. Lastly, make it a point to pay your obligations on time and avoid making purchases that will exceed your credit limit. Keep in mind that the reason why you obtained a bad credit credit card is to improve your credit score. Late or missed payments can result to paying additional penalty charges plus another negative remark on your credit report.
Copyright (c) 2010 Tara Tiemann
by: Tara Tiemann
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