Repairing a bad credit score can take time and a great deal of work, but many consumers have turned to credit card use as a way to begin the process of developing a better credit history. Obviously, individuals who have seen their credit score plummet over the past months due to economic problems may not be in a financial position to use credit cards in an advantageous way, but consumers who are finding a firmer financial ground in their life have been able to use secured credit cards as a way to begin rebuilding their credit score.
Some individuals may have access to unsecured credit cards, which can be used to repair a bad credit score, but in cases where an individual may be unable to access an unsecured line of credit or may only find unsecured credit card opportunities that come with a high interest rate have, in some cases, benefited more so from secured credit card use.
Numerous reputable financial institutions offer secured credit cards, and financial advisers often counsel secured credit card seekers to shop around and find not only an affordable credit card, but one from an institution which will not charge excessive fees for its use. However, despite having access to a secured credit card which one can use to repair their bad credit score, these types of credit opportunities are no guarantee to a better credit history.
While using a secured credit card has been most successful over the past months for cardholders who simply made affordable purchases and paid them off in total from month-to-month, cardholders can still do damage to their credit score if they are not careful. Secured credit cards often require the deposit of a sum of money into a bank account, which secures the card and sets the limit. If a cardholder fails to make these payment requirements, they will simply lose money from their secured account.
Secured credit cards, while no guarantee to a better credit score, have helped many build a better credit history over the past few months and gained access to affordable lines of unsecured credit. Yet, without smart spending and repayment habits, these cards can hurt one’s credit score even more, so for this reason, advisers have suggested that individuals who have outstanding debt remaining or may not be in a good financial position avoid seeking a line of credit until they are in a more favorable position to repair their bad credit.