As you start analyzing your credit repair situation, you’re probably noticing how it will be a lot harder to get out of the situation than it was to spend yourself into it, but fortunately there are a few tools available to you. One of them is the secured credit card. When it comes to credit repair, one of the essential steps of the process is to put your hands on some new credit and manage it properly so that you can prove that your little credit repair adventure was worth it and that you’re ready to use credit responsibly again. Depending on what has been showing on your credit report lately, you might or might not be able to get some new credit through traditional applications. In that case, you can get a secured credit card.
How a secured credit card works
If you’re wondering how a secured credit card works you will be happy to know that it’s not that different from what you’ve been using for all these years. The main difference between an unsecured credit card and a secured credit card is that you need to make an initial deposit into a secured credit card to give you a starting balance to charge off of. Now you can use this secured credit card like an ATM card - but the secured credit card counts towards you building credit because the secured credit card issuer reports your activity to the credit bureau(s) just like the normal unsecured credit card issuers do.
Of course, as with anything that concerns credit repair, you will want to be careful and only choose the right products. Secured credit cards can often demand that you pay more so be aware of the fees you’re going to pay if you choose to get one. The criterias when selecting a secured credit card are about the same as with regular unsecured credit cards : minimal fees and great interest rates should retain your attention.
Put it to good use
Once you’ve gotten your hands on a secured credit card, it’s time to put it to good use. Months after months, you must demonstrate that you’re on top of things and that you’re taking this secured credit card thing seriously, and not just as another opportunity to enhance your lifestyle through credit. The best way to use it is to make small purchases and to not put any big amounts on it or fill it in a few days. Spread your purchases and take the time to look at what you’ve done and how you will pay off the balance - preferably at the end of the billing month.
Go from secured to unsecured
Manage the use of your secured credit card strategy responsibly and you will paint some new healthy credit history on top of your old credit history that will appear on your credit report - that will begin to tell the story that you are regaining financial balance and credit worthiness. Soon you could be ready to switch back to a regular credit card if you used the secured credit card effectively and responsibly. The process might vary from one credit card company to the next, but usually a simple conversion is necessary upon approval to get your hands on an unsecured credit cards once again. Only make your request once you think your reputation has gone up and if you don’t get the green light, don’t insist – go back to using it with great discipline, and eventually you will succeed in obtaining your unsecured credit card privileges.
So, secured credit cards can be very useful for credit repair and act as a bridge back to unsecured credit cards. The simple fact that you apply for a credit repair tool such as this one shows you want to make things better and you must then act accordingly to gain back your privileges.