Over the past months some Americans have seen their credit score drop for various reasons and are presently looking for ways to repair a bad credit score. Obviously, by building a better credit history, almost any consumer can increase their bad credit score somewhat, if no major stains are on their credit history, like a default on a home loan.
Yet, consumers who may have a bad credit score due to either poor financial practices or because they were suddenly hit with financial burdens, like those associated with unemployment, do have trouble in some cases when it comes to finding access to credit. Obviously, repaying debts like personal loans or using credit cards is one way to build a better credit history and improve a bad credit score, but for bad credit borrowers this can be difficult.
Aside from simply practicing stricter financial habits, like paying bills on time or avoiding excessive credit card use, many consumers who are attempting to repair their bad credit score have turned to secured lines of credit like secured credit cards or personal loans in order to access the credit they need to begin repairing their credit history.
While options like a secured credit card may not be a good idea for individuals who has been weighted down with credit card debt due to bad financial practices and spending habits, those who have responsibly used secured credit cards in the past have found that these lines of credit can be helpful when it comes to increasing a bad credit score.
Obviously, secured personal loans or secured credit cards will require collateral, which will be lost if a consumer fails to pay their debts, but those who have implemented smart financial practices have benefited from these types of secured credit lines. Consumers, when using secure credit cards for example, often have simply made small, affordable purchases, which they can pay off from month to month and would obviously reflect well on their credit history.
However, many financial advisers often suggests that consumers do plenty of research before choosing a lender for a secured card or personal loan and be sure they are in the financial position to repay this debt as quickly as possible. While a secured credit card or secured personal loan is not a guarantee to rebuild a bad credit score, individuals who have selected secured credit cards from reputable lenders who report to the big three credit bureaus have an excellent opportunity to increase their low credit score.
Yet, despite the fact that secured loans and secured credit card opportunities have allowed many consumers to rebuild their bad credit history, many counselors state that smart financial practices over time are simply the best way to not only develop a better credit history but increase one’s credit score. For some consumers, repairing a bad credit history has taken some time, as again there are types of debt on a credit history which may take years to overcome, but individuals who may be early in their financial life, have simply made bad choices or have fallen upon difficult financial times may benefit from the use of secured credit card if they practice smart financial habits.