Secured Credit Cards: How To Rebuild Credit With Secured Credit Cards?
Rebuilding credit is a long process that needs patience and consistency. Creating good payment track record is the ultimate way to rebuild credit. Interestingly, the most important way to rebuild credit is to apply for a secured credit card. Whether you are an online trader or a product buyer, applying and getting secured credit card approval will help you rebuild your credit score and get loans in the future. You can successfully rebuild credit if you use your prepaid credit card in a positive manner which means paying all credit card dues on time.
Step 1: Apply For A Secured Credit Card
If you have a savings or checking account in the bank where you are applying for the secured credit card, then that is a plus point. If not, then for getting secured credit card approval, you need to deposit a certain amount in the secured credit card account. Minimum amount required to deposit in your secured credit card account is $500. But the catch here is that you will not get a credit limit same as the amount deposited. Your credit limit will be anywhere around 60% to 70% of what you deposited initially.
Step 2: Getting Secured Credit Card Approval
After getting approval of your secured credit card, start using the card for online shopping, trading, paying grocery bills, utility bills, etc. But always remember to make the payments back in your secured credit card before the due date. Keep on doing this for a few months or a year to rebuild credit. Some prepaid credit card companies increase the credit line of a customer above the deposit amount if they see timely payments. This is a positive sign and is your first step towards rebuilding credit.
Making timely payments and good customer track record utilizing a secured credit card will help you rebuild credit. If you see an increase in your credit limit, then you can also apply for a non-secured credit card. It may be possible the credit card company consider your present track record and give you a non-secured credit card. If you get one, then congratulations as it is a proof that you have already rebuilt your credit score.