Consumers who are currently looking for a secured credit card available to bad credit borrowers here in July may have noticed that, since the first of the month, there has been relatively little movement in the average rates that these bad credit credit cards are offering to consumers, and even rates from June fell into a similar range that we are currently seeing on this particular line of credit. Cardholders know that it depends on their financial position and the severity of their bad credit situation as to what rate they receive, but may find that they are looking at an average of around 22% to 24% on a credit card available for bad credit borrowers, but there may be fewer options in some cases when it comes to this particular type of card.
Yet, consumers often feel that a secured card, or an unsecured credit card tailored specifically for borrowers with a low credit score, will be their only option when it comes to repairing a poor credit history, as some men and women may have credit cards in place that led to their poor credit score when missed payments occurred. However, consumers need to understand a few factors about repairing a low credit score before jumping into a secured credit card opportunity, as many consumers understand how secured credit cards work but are unaware of issues that also factor into their credit score.
Aspects of the consumer’s credit history like mistakes, foreclosures, or defaults can all attribute to a poor credit score, as does the missed payments on monthly obligations like loans or credit cards. However, some of these items on a credit history will remain longer than others, since a consumer who has faced foreclosure will have to combat this particular stain on their history for quite some time, but that does not mean that an individual should give up on the bad credit repair process.
It’s been mentioned previously that credit counselors or proper secured credit card use are just a few of the options that a bad credit borrower may have but consumers need to understand that the amount of debt they carry in relation to the available credit they have, their payment history, the length of their credit history, as well as, the types of credit then they may have are all pieces of the puzzle that go into calculating that consumer’s FICO score.
What this means is that some consumers may be able to use current unsecured lines of credit that are available for their bad credit repair needs, but if poor financial practices have led to an increase on a consumer’s unsecured card, it will be even more important in this case to keep charges low and affordable so that a cardholder can avoid paying interest charges when they carry a balance. Yet, getting out of debt is also a large aspect of a consumer’s credit score too, so before turning to alternatives like unsecured credit cards for the purposes of bad credit repair, consumers will need to focus on lowering their debt, since this will not only potentially help their credit score, in certain situations, but it will make the bad credit repair process easier as a consumer can focus more funds towards paying off charges that are meant to be a building block when establishing a more positive credit history.