Wells Fargo is one of the many lenders across our nation who is offering assistance to bad credit borrowers by offering a secured credit card to repair one’s bad credit score. Many individuals have seen their credit score drop over the past few months due to financial troubles that are, mostly, related to unemployment. Many unemployed men and women have been using credit as a means to stay afloat, and since many household incomes have dwindled, payments are usually missed and a bad credit score soon follows.
Yet, those who are in the position to do so, have been able to use cards like a secured credit card from Wells Fargo or another financial institution to begin the process of repairing their credit history. A credit card holder or borrower who has a bad credit score may find it difficult to get the access to credit they need to begin repairing a poor credit history, thus increasing a bad credit score.
However, a secured credit card from a reputable lender can be a valuable tool when used properly and responsibly. While a secured credit card does work similarly to other credit cards, this type of card requires the deposit of a sum of money into a bank account which will set the credit limit and secure a lender, like Wells Fargo, in case the cardholder defaults or misses payments.
It will be important to remember, for anyone considering a secured credit card, that this type of card does not guarantee a better credit score. Also, anyone who still has a large amount of debt must first get debt-free before a secured credit card will be beneficial. The only way in which a secured credit card has been helpful for individuals trying to repair a bad credit score is by budgeting money, saving, and making small purchases with the secured credit card that can be paid off monthly.
Responsible financial habits are vital to the proper use of this card, but also, finding a lender who offers a good rate on a secured credit card, reports to the big three credit bureaus, and will not charge excessive fees will also be necessary when using a secured credit card to repair a bad credit score. While Wells Fargo does offer these types of cards they are not the only financial institution to do so, so financial advisers often tell those who are looking for a secured card to shop around and find the best rate they can for their personal situation.