Many people try to use personal loans, both secured and unsecured, to improve their bad credit score. However, this can cause trouble, as those who have a bad credit score usually can’t get a loan that comes with a low interest rate, when it comes to unsecured loans, but a secured loan can cause the loss of collateral if you default.
A safer route to take might be a secured credit card. While you are required to deposit money into an account to secure the credit card and that money can be taken if you miss a payment or default, it is still a safer venture than putting your home or property up as collateral in the hopes of getting a personal loan to rebuild credit.
Typically, a secured credit card will bring a lower interest rate and give you the ability to improve your credit score by making charges and paying them off each month. This may be a better option than a personal loan, since a secured credit card is an ongoing way to improve your credit score, where as getting and paying back a loan is a one-time deal.
Using a secured credit card in an intelligent manner is going to go a long way in helping you improve your credit score and, again, can be an easier way to do so as opposed to getting a personal loan. Take the time to research secured credit card offers and see if they are going to be in your personal, best interest for rebuilding your credit score.