Whether you’ve gone through some hardships in life or simply made some bad financial decisions, rebuilding bad credit can be a long uphill battle. The good news is there are several strategies you can implement to speed up the process, and working with credit rebuilders is highly recommended. One of the top strategies credit rebuilders often suggest is using a secured credit card. It’s not a one-size-fits-all solution, but here are some of the things you should know to determine whether it’s the right option for you.
What Are Secured Credit Cards?
When you have a secured credit card, you must make a deposit before opening the account. It helps you build your credit by protecting you from charging too much to your credit card and being unable to make regular payments. Lenders and other agencies look for responsible use of credit cards when considering loan applications, so a secured credit card can help you be more responsible in this regard.
Using Secured Credit Cards As A Credit Building Resource
When you use a secured credit card to build your credit, be sure to pay the minimum balance every month. Or if you can pay more than the minimum, then doing so will be beneficial. One thing to consider is whether the card issuer regularly reports your credit card status to the main credit reporting agencies. Doing so can help you build your credit naturally by using your secured card responsibly.
Always Make Timely Payments
All it takes is one late or missed payment to damage your credit score. It’s essential to make timely payments on your secured credit card just as you would an unsecured credit card. If you need to, set reminders to make payments on time. And you can go a step further by creating a budget and sticking with it to ensure you don’t charge more than you have to spend.
Consider Requesting A Credit Limit Increase
Once you get a handle on your spending and have made several monthly payments on time, you can take the next step in building your credit. Increasing your credit limit can improve your credit utilization ratio, which is what a lot of lenders evaluate. Credit card issuers need to see a consistent positive payment history before increasing your credit limit, so take your time before requesting it.
Core Credit Solutions is here to help you fix credit in Los Angeles. Our team has more than 25 years of experience helping people rebuild their credit and giving them more financial flexibility. To learn more about how we can help your financial situation, contact us today to schedule a consultation.