Rebuilding your credit can be enhanced by the use of a credit card. It is necessary, however, to follow a few steps.
We have all heard about and felt the credit crisis in one way or another. Many consumers have missed one or more personal loan payments or have defaulted on a credit card. As a result, many consumers are now hampered by a below-average credit score. This, in turn, raises red flags for lenders and, in their eyes, makes you a bad credit risk.
If you find yourself in this situation now, be assured that you can dig yourself out of this proverbial hole. One way to do this is to use a particular type of credit card to help rebuild your credit. After obtaining this credit card, you will need to use it wisely, which means paying the monthly bill on time every month, and not overspending. By doing this, you will begin to see your credit score rise as you improve your spending and payment history.
Now, let's talk about the type of credit card you should or should not be looking for. Do not attempt to apply for an unsecured credit card with low annual percentage rates (APRs) and lots of benefits if you have bad credit. If you do apply for one of these cards and are rejected, the rejection will show up on your credit history, thus lowering your credit score even more. Instead, look for a good quality secured credit card, which normally offers guaranteed acceptance, even if you have bad credit.
Most secured credit cards provide the same benefits as an unsecured credit card. You should be able to make purchases of goods and services, as well as online purchases and ATM withdrawals. The difference between the two types of credit cards is that, with a secured credit card, you will need to provide a "deposit" as security against your default on the card before you can begin using it. This deposit then becomes your credit limit. You can decide for yourself how much you would like to provide for a deposit, however, the minimum is normally $100.
Since your goal in obtaining a secured credit card is to rebuild your credit, it is necessary to make sure that the credit card company reports to the three credit reporting agencies - TransUnion, Experian, and Equifax. Do not even consider a card which does not report to the credit reporting agencies.
Also, make sure that you find the secured credit card with the lowest APR, as well as the fewest and lowest charges. The various fees, penalties, charges, etc., vary greatly between the credit card companies so make sure you consider all the angles before you apply. Prior to submitting an application for a secured credit card, make sure that you have found one that will meet your need of rebuilding your credit, while not charging you an arm and a leg.
Once you obtain your secured credit card, you will need to begin using good spending habits. Begin by charging "small" amounts each month and then be sure to pay the monthly bill on time every month. Do not be late with your payment! It would be even better if the balance was paid off each month.
If you are using your credit card wisely, each month your credit rating should increase a bit. Before too long, you will be considered a "good" credit risk. - 31377
We have all heard about and felt the credit crisis in one way or another. Many consumers have missed one or more personal loan payments or have defaulted on a credit card. As a result, many consumers are now hampered by a below-average credit score. This, in turn, raises red flags for lenders and, in their eyes, makes you a bad credit risk.
If you find yourself in this situation now, be assured that you can dig yourself out of this proverbial hole. One way to do this is to use a particular type of credit card to help rebuild your credit. After obtaining this credit card, you will need to use it wisely, which means paying the monthly bill on time every month, and not overspending. By doing this, you will begin to see your credit score rise as you improve your spending and payment history.
Now, let's talk about the type of credit card you should or should not be looking for. Do not attempt to apply for an unsecured credit card with low annual percentage rates (APRs) and lots of benefits if you have bad credit. If you do apply for one of these cards and are rejected, the rejection will show up on your credit history, thus lowering your credit score even more. Instead, look for a good quality secured credit card, which normally offers guaranteed acceptance, even if you have bad credit.
Most secured credit cards provide the same benefits as an unsecured credit card. You should be able to make purchases of goods and services, as well as online purchases and ATM withdrawals. The difference between the two types of credit cards is that, with a secured credit card, you will need to provide a "deposit" as security against your default on the card before you can begin using it. This deposit then becomes your credit limit. You can decide for yourself how much you would like to provide for a deposit, however, the minimum is normally $100.
Since your goal in obtaining a secured credit card is to rebuild your credit, it is necessary to make sure that the credit card company reports to the three credit reporting agencies - TransUnion, Experian, and Equifax. Do not even consider a card which does not report to the credit reporting agencies.
Also, make sure that you find the secured credit card with the lowest APR, as well as the fewest and lowest charges. The various fees, penalties, charges, etc., vary greatly between the credit card companies so make sure you consider all the angles before you apply. Prior to submitting an application for a secured credit card, make sure that you have found one that will meet your need of rebuilding your credit, while not charging you an arm and a leg.
Once you obtain your secured credit card, you will need to begin using good spending habits. Begin by charging "small" amounts each month and then be sure to pay the monthly bill on time every month. Do not be late with your payment! It would be even better if the balance was paid off each month.
If you are using your credit card wisely, each month your credit rating should increase a bit. Before too long, you will be considered a "good" credit risk. - 31377
About the Author:
Lexington Law Fixed this Man's Bad Credit and Raised His Score by 163 Points. See Why it Works at www.lexingtonlawreviews.com.
