Do Secured Credit Cards Help Build Credit?

A secured credit card, is a credit card that requires a cash collateral deposit that becomes the credit line for that account. For examply, if you put $300 into the account, you can charge up to $300 on that card.

Using a secured card can be a very effective way to start establishing a positive credit history. However, there are certain things that you must do to ensure it helps your credit score in a positive manner.

Secured credit cards work just as an unsecured card. Your payment history will be reported to the credit bureaus. It is very important to ensure that all your payments are made on time, as a late payment could affect you negatively instead of helping your credit score. Remember 35% of your entire credit score is based off your payment history.

Apart from making your payments on time, we recommend never carrying more than 10% for your credit limit over to the next month. This will ensure you keep your debt ratio low, as it is worth 30% of your credit score.

Keeping a secured card in good standing for one year, in most cases, your deposit may be refunded, and it will then turn into an unsecured card. Your credit limit may raise or stay the same. Your length of credit history is worth 15% of your credit score.

Making all your payments on time, keeping a low debt ratio, and keeping that account open for at least a year may help you in 80% of your entire credit score. Every case is different and your score increase may vary, never the less it will help.

If you have any questions concerning how to best help your credit score rise, please contact us as there may other factors preventing you from boosting your credit score.

We can definitely help each and EVERY situation, please give us a call at 844-FIX-URCR or to schedule your FREE consultation!
*Individual results may vary. Please call for more details and to discuss your own individual situation.

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