Three Guaranteed Tactics
In the next three episodes I want to go over three guaranteed tactics that will increase your credit score regardless of where you’re at. Let me say this slide, you should use all three.
These absolutely increase your credit and therefore your credit score anywhere from 20 to 100 point; and if you use all three it might even be more than that! They are CD or savings account loans, the shopping cart trick, and secured credit cards. In this episode I’ll be going over secured credit cards.
To Access the Course Material:
Click HERE for the Ultimate Credit Repair Course! >
To Access the Free Webinar:
Click HERE to Watch the FREE Webinar! >
To Access the FREE LIST:
Click HERE to Get The FREE Shopping Cart Trick LIST! >
Who Should Use Secured Credit Cards
We all know mistakes happen. We all know that bad things sometimes happen to good people. All of us at some point in our life may find ourselves in a position to where we have to rebuild our credit
There’s no doubt the secured credit cards are going to cost you something, and perhaps it would be good to explain who should be using this sort of scenario.
- If you have Declared bankruptcy in the past and is trying to recover secured card may be for you.
- or if you have Defaulted on payments in the past
- or A lot of credit inquiries been declined often
- or perhaps you have Made late payments in the past and had their accounts closed because of this
- or finally, maybe you simply don’t have a credit score at all, and you’re trying to establish one.
Secured Cards VS Unsecured Cards
A secured card is different because you have to deposit money into some sort of savings account in order to use the card and even then the bank will only allow you to charge a percentage of your deposit. When your credit score is low the limit may be as low as 50% of what you have any account. As your credit score improves the bank may or may not increase your limit.
The good news about a secured credit card is that pretty much anybody can get one even if you had a bankruptcy, You should have a fairly easy time getting secured card in that there is little to no risk for the bank. Also secured cards are an excellent way to get credit started when you have none for a variety of reasons. Not only will it help a young or new consumer establish credit, but it will also show them how to live within a budget in that Limits will be pretty strictly observed with secured cards. If you reach your limit, a secured card typically will not let you go over that limit it will simply decline it. Sometimes unsecured cards will let you go over your limit and just charge you an extra fee for having gone over..
Finally the jury’s out on whether a secured card or an unsecured card is better in terms of credit Bureau reporting and an overall credit score. Generally a secured card is going to be a lower limit card and your total credit is always going to be a factor in your score. You certainly want more credit than less credit if you want high score. That would lead one to believe that a secured card is not as good. However if you have a non-secured card and you always carry a balance, even if the credit limit is higher, that still not going to be as good as a secured card that you pay off each month. As a credit repair and credit building teacher I am a big fan of secured credit cards for both newbies and for those having to start over.
How it Works
Secured credit cards are easy and most of the companies that offer unsecured credit cards also offer a secured version. I recommend working with those folks and your local bank first because typically after you’ve proven yourself for some period of time with secured card they can turn around and give you an unsecured card without too much hassle through a process they call a conversion. Sometimes without even a hard inquiry.
The steps are pretty much as follows. You make a deposit they give you a card and your limit is based on the deposit. If you fail to pay on time they will simply take the money out of the account that you offer as security. You will have no access to the account typically while you have any sort of a balance on the credit card.
typically there’s yearly or monthly fees but honestly if you look around you can find secured cards that have no annual fee, and even if there is a fee there’s plenty of them out there so you shouldn’t pay more than $50 as an annual fee.
And finally be sure that they report because not all credit card companies report to the credit bureaus. You deftly want to do that before you sign up with any company.
Secured VS Prepaid Cards
At first glance a prepaid card also called prepaid debit card might seem like a good way to go.
Here’s the problem with prepaid cards, there really just a debit card meaning you’re using your own money to make the purchases not borrowed money from an issuer. You put money on the card then you use the card, simple as that.
Since these cards don’t extend credit that activity of buying and selling that you’re doing is not reported to credit bureaus therefore it cannot help you build credit history.
Prepaid debit cards typically also have fees that secured cards do not have.
Due to pin numbers they tend to get hacked easily and unlike a credit card there’s no financial recourse.
Generally speaking there are rip-off, and I don’t recommend them.
Using a Secured Card Effectively
Although they require deposits into some sort of an account, secured credit cards are an awesome tool for rebuilding or starting credit. the trick to using a secured card effectively is simply the same as using any other credit effectively.
Use it sparingly. Don’t run it up to the limit every month.
Pay the balance in full every month before the due date. Most often this will mean that you didn’t pay any interest in interest is what affects your standard of living.
If it has the ability to build the limit by adding more money to the account, then do so every month as you can.
After approximately six months, if you’ve paid on time, you can ask the issuer about upgrading to an unsecured card. Sometimes it can take about a year, but if you been paying on time six months would be a good time to start calling them.
To Access the Course Material:
Click HERE for the Ultimate Credit Repair Course! >
To Access the Free Webinar:
Click HERE to Watch the FREE Webinar! >
To Access the FREE LIST:
Click HERE to Get The FREE Shopping Cart Trick LIST! >
