Secured credit cards for bad credit are equivalent to getting a fresh start on re-establishing credit. The amount of the credit limit someone gets is usually in the amount of money they deposit into their account. These cards are able to rent a car, and make purchases, but are they really effective to increase credit scores?
The answer to this question is actually yes and no. Obtaining a secured card alone is not a drastic change as far as increasing your credit score in the short term. On the other hand, if you make on time payments and a low balance, you will notice a significant change in your credit score. The key is based on your ability to be discipline.
The number of points increases your credit score, also depends on the amount of your first deposit. The more money deposited into the bank account of the secured card provider, the better it will reflect to the credit bureaus. Since the majority of the secured cards do not report to the credit bureaus as a secured, give the appearance of being larger deposits more credit granted.
Another crucial factor is the length of time that a secured card is opened. A card must begin to show at least six months of on time payments to have some real weight with the creditors. Mortgage brokers and other large purchase lenders are looking for at least 2 years of good payments on time and also a low balance on the card. A consumer can achieve great gains in credit scores if they can stick to these guidelines.
Some consumers who are serious about restoring their credit by using bad credit secured credit cards have experience increases of 20 to 50 points. These results can be different for each individual and can only be done if it does not add any additional negative items with the credit profile.
In an attempt to re-establish credit history, it is important to track the progress of your efforts. A good way to track progress is by using a credit monitoring company. These companies can notify you if there are changes to your credit profile and also alerts you when new articles appear. This can go a long way in letting you know what to go by what does not work.
Bad credit is a situation that unfortunately many people go through everyday. The good news is that there is a long way to rectify the situation and get a second chance. Bad credit credit cards are safe definitely effective in helping consumers get that fresh start. The degree of effectiveness can produce these cards is entirely up to the discipline of the consumer.
Getting a secured card is a good start to improve your credit score, but the first step must be getting a copy of your free credit scores and start reporting....
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