Lines of secured credit have been used by consumers over the past months as a way to repair a poor credit score, but individuals who are attempting to use these forms of credit have often been cautioned as even secured credit can cause damage to one’s credit score if not used properly. Numerous financial institutions offer secured credit cards, and there are opportunities for secured loans in certain cases, but using secured credit requires just as much, if not more, responsibility concerning one’s financial life.
However, individuals who are in need of a secured line of credit in order to repair their bad credit or simply begin building a credit history, do have opportunities which have been beneficial for many in the past. Yet, the Federal Trade Commission does offer advice for consumers who may be in need of this type of credit before they can begin repairing their poor credit score.
Understandably, since the recession and massive layoffs across the nation, many men and women had trouble repaying their debts or began relying on forms of credit like credit cards as a way to simply meet their basic financial needs in the hope that things would get better. Obviously, there were cases where some individuals were unable to find an employment opportunity or saw cutbacks in their wages, and in both instances saw their credit score drop as a result of missed payments or even defaulting.
While there are financial difficulties that remain for numerous men and women across the nation, some have gotten to a position where they can begin repairing your credit score, but a bad credit score does not always allow a consumer to find an affordable unsecured line of credit which can be used to begin building a better credit history.
Yet, the secured lines of credit which, again, can be obtained from a reputable institution, do come from numerous sources which may not have a consumer’s best interest in mind. For this reason, the FTC warns consumers about scams which may be perpetrated against consumers who are looking for secured lines of credit, like credit cards.
Obviously, consumers who have been most successful with using secured credit to repair a poor credit score have been those who have worked with reputable financial institutions, which reports activity to the big credit bureaus, and will only charge minimal fees for the usage of this credit. Secured credit often requires some form of collateral, like the deposit of money into an account, but consumers who are in the position to begin repairing their credit score should be prepared for this requirement and be on financial ground that is firm enough to allow them to begin repaying charges or debts which are associated with the secured lines of credit.