Individuals who are attempting to rebuild a bad credit score have often used methods like obtaining a secured personal loan or secured credit card as a way to begin repaying these debts and building a credit history as a result. While it needs to be understood that secured loans or credit cards are no guarantee to a better credit score, individuals who have been successful in using these methods over the past months have simply been those who have practiced smart financial habits in the pursuit of a better credit score.
A bad credit history can come about for a number of reasons, and in cases where a bad credit score is in play, credit card opportunities and personal loans may not be available. Yet, secured credit cards and secured personal loans may offer opportunities for bad credit borrowers to find the access to capital they need in order to rebuild their bad credit history.
Typically, bad credit borrowers who simply want to begin establishing a better credit history can use a secured credit card to make purchases, which are affordable and easily paid off in full from month to month, as a way to begin establishing a more solid credit history. However, there are certain cases where secured personal loans may be needed for, obviously, personal reasons but can also be a way that a better credit history can be established.
Essentially, individuals who have used either secured personal loans or secured credit cards to build a better credit history and improve a bad credit score have been those who are in a financial position to quickly repay these debts without letting a balance remain and allow interest to accrue.
While not all consumers may qualify for these forms of secured credit, they have been valuable tools to help bad credit borrowers meet certain financial needs and also began repairing their credit history. Yet, financial advisers often warn against using secured loans or credit cards if a borrower’s financial situation may not allow them to easily meet or exceed repayment requirements, as these forms of credit can also do damage to one’s credit score and history.