Can Using a Credit Card Help to Rebuild My Credit?
Rebuilding your credit can be enhanced by the use of a credit card. It is necessary, however, to follow a few steps.
Everyone has felt the effects of the credit crisis. It is now almost commonplace for consumers to default on personal loans or to miss bill payments. Those who have defaulted on a personal loan or missed multiple bill payments are now suffering from a low credit score. Lenders look for these types of scores and are wary to lend money if the score is below-average.
Even though it may seem impossible right now, you can raise your credit score. This can be done by obtaining and using a particular type of credit card. Once you have obtained one of these cards, it would behoove you to spend wisely and pay the bill every month on time. Once you begin to do this, you should see your credit score rising steadily.
Are you wondering what type of credit card you should or should not look for? Well, if your credit is suffering, it is wise not to apply for an unsecured credit card which generally offers a low annual percentage rate (APR) and many benefits. Your credit score can actually suffer even more if you apply for one of these unsecured credit cards and you are denied. Instead, search for a good quality secured credit card. Approval is normally guaranteed if you apply for a secured credit card.
Secured credit cards and unsecured credit cards are basically the same. Just like with an unsecured credit card, you should still be able to purchase goods and services and make cash withdrawals using an ATM. The major difference between these types of credit cards is that a “deposit” will need to be provided in order to begin using a secured credit card. Your credit limit will be determined by how much you deposit with the credit card company. Although the minimum is usually $100, you can deposit more if you would like to do so.
When shopping for a secured credit card, make sure that you choose one that reports to the three major credit reporting bureaus – Experian, Equifax, and TransUnion. If a credit card does not perform the reporting function, do not even consider it because it will be a waste of your time with regard to rebuilding your credit.
What should you look for in a secured credit card? You should find one that has the lowest APR possible and that has the lowest and fewest charges. Secured credit cards vary immensely in what they offer so you should be diligent in searching for the best credit card to accomplish your goal of rebuilding your credit.
So, now you have your brand new secured credit card in hand. What now? From this point forward you will need to handle and manage your credit card carefully and with great consideration. Remember, the idea is to rebuild your credit, not dig your hole deeper. You should consider purchasing a few “small” items on the card each month. Then, turn around and make payment well in advance of the due date. It is even more desirable if you pay the balance off each month. I did say “small” items!
You should see your credit score increase a little each month by handling your credit card responsibly. This careful use of your credit card should assist you in becoming a “good” credit risk.
Lexington Law Works. ManGot Results in– Days and Score Went Up163 Points.
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