Raise Your Credit Score with a Secured Credit Card

Your credit score effects not just your ability to get a loan, but more and more employers are pulling credit to help make hiring decisions.  Landlords pull credit reports when making the decision to rent to you or not, and how much of a security deposit would be needed. Even when you apply for car insurance they are pulling your personal credit report and making a decision on how much to charge you by what they see!
Improving your credit score will not only save you money in finance fees, but it can also help you get that new job!  Here are a few tips on how you can improve your credit score by using a secured credit card

Using A Secured Credit Card To Improve Your Credit Score

Why a secured credit card. If you don’t have aStack of credit cards credit card yet or can’t qualify for a regular credit card because of a low score, you can get a secured credit card instead. Approval for a secured card is not based on credit history or credit score so you should be able to get approved right away.

However, be prepared to submit a security deposit which can be anywhere from $200 to $500, depending on the issuer. This deposit will serve as a security for your debts. In case you fall behind your payments, your issuer will tap into the security deposit to pay for any unpaid balance.

  • Make sure the card you choose that offers credit builder or will report to the credit bureaus.  Not all secured cards do!  So read the fine print and make sure the card you choose does.  The ones you will find on this page, will report to the credit bureaus
  • Understand the security deposit.  Most secured cards will give you a credit limit that matches your security deposit.  Some of them will give you a little bit over your security and some a little less, again this is where you need to read the fine print
  • Your security deposit is put into a savings account (some are interest bearing).  Try to save up as much as possible so that it looks like a large unsecured credit card on your credit report
  • Look for a card that will let you keep adding to your security deposit so you can give yourself credit limit increases
  • Use your secured card regularly. To build credit, you need to show that you are capable of managing debt and credit. Prove this by using your secured credit card regularly
  • Pay all bills on time. It’s not just your credit card bills you should pay on time. It’s also important to pay all your creditors promptly if you want to improve your credit score. This includes loans (such as car loans, personal loans, student loans, etc) and utility services (electricity, cable, internet, etc)
  • Do not send out too many credit applications. If you want to apply for a credit card, spend time doing research and compare deals before submitting your application. Don’t try your luck by sending out applications to different issuers at once. Doing so can badly hurt your credit as each hard inquiry will deduct a few points from your score.    The same principle applies when applying for a loan. You should compare offers from at least three different lending companies but you should not submit your application until you have completed your research.  Furthermore, consider waiting until your credit rating has improved before applying for new credit to qualify for lower interest rates and better deals.

About the Author
Tara Tiemann is the credit specialist for http://www.go-prepaid.com.  Which is a resource site for people who want to live debt free! If you are on a budget, using a secured credit card and merchandise credit cardscan save you big money!

About Liz Roberts

Liz Roberts is the new credit specialist for Go-Prepaid. If you are on a budget, we can get you discounted cell phone service from Sprint, Verizon and T-Mobile! NO CREDIT CHECK ! Using a prepaid services can save you a TON of money! Follow our blog to find out how!

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