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Is A Secured Credit Card A Means To Lift Your Credit Score |
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Written by Webmaster
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Thursday, 21 May 2009 |
By Alisdair Cosgrove
 By using an unsecured credit card, you have a simple and convenient way to build your credit history because it does not require any form of collateral. However, if you happen to have poor or bad credit, it may be almost impossible to obtain approval for an unsecured credit card.
If you do not qualify for an unsecured credit card, you could always apply for a secured credit card. These types of card use a savings account monitored by the card company to store a cash deposit. This deposit acts as a form of collateral.
Unsecured credit cards typically have their payment histories monitored by the three big credit bureaus. The same is not always true for secured credit cards; many do not report their payment histories at all. .
Since the goal is to raise your credit score by using a secured credit card, you should locate those cards that take the extra measure to report their payment histories to credit bureaus. The benefits of taking this step are typically outlined
in a cards application form. If you cannot find such a provision, then you may need to contact the card issuers customer service department by phone or email to learn more.
The process of raising the credit score is rather simple. You can take the secured credit card, make a payment for any purchases, and make sure that any payments due are paid on time. One notable different between secured credits cards and other forms of credit cards involves default payments. The amount is taken from the money held in the savings account.
Generally, the approval process for a secured credit card is remarkably easy. There is far less hassle with these than any other credit card. There will be no required credit check since the saving account will be the source of collateral on the card. The only restrictions on getting approval for secured credit cards involve age and US residency; you must be 18 or older and living in the United States.
Your cards credit limit is determined by your savings account cash deposit. If you are interested in raising that limit, you merely deposit additional funds. This cash will also earn interest as long as you avoid defaults. This idea is what makes secured credit cards such an advantage over standard credit cards. With limits on funds available, you will avoid serious credit card debt.
If you happen to have poor credit or having built credit at all, a secured credit card is the best bet. Once you use the card on a regular basis and make payments on time, you will start to see improvements to your credit score. With time, you may even qualify for additional credit and other benefits.
Alisdair Cosgrove has been writing finance articles for many years and can find more of his work at the UK site CreditCardsWeb.co.uk, offering credit card offers for UK residents and also a great selection of 0% credit cards.
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Last Updated ( Thursday, 21 May 2009 )
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