Secured Credit Cards Help Repair A Bad Credit History–Can Consumers With Bad Credit Increase Their Score?

Numerous consumers have difficulty when it comes to their credit history and credit score, and these problems can be caused from a variety of factors. Problems that lead to a bad credit history or poor credit score can come in the form of identity theft, poor financial practices, or economic factors like unemployment. However, there have been more consumers who are concerned with rebuilding their bad credit history as of late, and many are turning to secured credit cards as a way to increase their bad credit score.

Secured credit cards, which are similar in function to an unsecured card, are typically used by those who are looking to either repair or build a good credit history. Interest rates can be a problem on unsecured cards in the case where a bad credit score is present, but secured cards can be accessible to bad credit borrowers.

While a secured credit card should be sought out from a reputable financial institution and a secured card lender should report activity to the big credit bureaus, simply using this type of credit will not guarantee a better credit score. While the use of credit cards to make affordable purchases and promptly pay off credit card balances each month can build a better credit history, it takes financial discipline and smart credit card practices before a consumer will see any benefits from their secured card.

Despite the fact that a secured credit card is typically not meant to carry a balance and is usually only used by consumers who are looking to repair their bad credit history, proper use of a secured credit card can lead to unsecured credit card offers in the future. A secured credit card has been helpful in repairing bad credit scores and building better credit histories for many, once the cardholder has learned to properly manage their credit, unsecured card offers may be more affordable than a secured credit card. These unsecured cards may then assist the consumer in not only keeping a good credit score, but may be beneficial when it comes to maintaining a positive credit history for years down the road.