One’s credit history is directly related to a credit score, but for many cardholders they have seen a poor credit history develop over the past months and a bad credit score as a result. While there are individuals who have little or no credit history in which to begin building a positive credit score through the use of credit cards, some cardholders have simply made poor financial decisions, defaulted or missed payments on their credit cards, and as a result have a bad credit history and credit score.
Yet, there has been cardholders who have turned to tools like secured credit cards as a way to either rebuild their bad credit history or start on the path to a positive credit score. Some individuals who have a bad credit score or no credit history may have difficulty obtaining an affordable credit card, since interest rates can be quite high for bad credit borrowers, but secured credit cards have been a way that bad credit borrowers or individuals with no credit history can get the line of credit they need to begin making smart financial moves.
A secured credit card does require that a cardholder deposit money into a bank account, which secures the card lender against loss, this type of card has also been a valuable tool for building a better credit history. Secured credit cards can be more affordable or easier to obtain for some, so individuals who have the financial responsibility to make affordable purchases with a secured credit card and promptly pay them off from month-to-month may find this means of building a better credit history to be quite affordable.
Repairing a bad credit history or simply building a good credit score will take time but individuals who practice smart financial habits and have turned to resources like secured credit cards have seen positive results in the past. While various lenders offer secured credit cards, it will be important for anyone seeking this type of card to find a reputable lender who will charge minimal fees and offer an affordable interest rate.
Again, a secured credit card is no guarantee to a better credit history or a positive credit score but there have been many cardholders who have not only use this type of card to repair a bad credit history and increase their bad credit score, but there have been those who were offered an unsecured credit card after establishing a more positive credit history, which has allowed many cardholders to continue building their credit history through smart purchases and budgeting techniques.