Title:
How To Use A Secured Credit Card To Repair Your Credit
Word Count:
468
Summary:
If you have ever had credit cards, paid a bill monthly, or obtained a loan, you have a credit rating. When you
make payments to a creditor, they report these payments to credit reporting agencies that compile your credit
report and track your credit history. If you miss a payment, or even worse, your debt gets sent to a collection
agent, this affects your credit rating negatively, and may prevent you from obtaining more lines of credit
when you need them in the future.
As ...
Keywords:
credit repair, repair your credit, debt consolidation, fix bad credit, fix credit report, finances
Article Body:
If you have ever had credit cards, paid a bill monthly, or obtained a loan, you have a credit rating. When you
make payments to a creditor, they report these payments to credit reporting agencies that compile your credit
report and track your credit history. If you miss a payment, or even worse, your debt gets sent to a collection
agent, this affects your credit rating negatively, and may prevent you from obtaining more lines of credit
when you need them in the future.
As soon as you realize you are in this situation, it is crucial that you immediately begin to make an effort to
repair your credit rating. To most people, this seems like a difficult thing to do, but doing nothing to repair
your credit will only prolong the damage for up to seven years. Until your credit is better, you will find that
you are barred from any type of loans or even activities that require credit, such as renting a car.
One way to repair your credit is to obtain a secured credit card. You may wonder how this is possible with
bad credit, when you will most likely be declined when filling out a credit card application. However,
without a credit card, you will have a hard time proving to creditors your responsibility in making payments
on time.
Try a secured credit card. Secure credit cards are marketed specially toward individuals with poor credit.
These credit cards work when the customer applies a deposit equal to their credit limit. For example, if you
make a deposit of $100, your credit limit will be $100. The credit card company then be use your deposit
toward any balance on the credit card resulting from late payments.
This type of credit card is risk-free for the company that issues it, because they can always deduct the
balance from your deposit, so it makes sense to issue these cards to people with poor credit. One drawback
to secured credit cards, however, is the annual fee that most regular credit cards don’t charge.
After you have obtained one of these secured credit cards, use it sparingly but regularly, and make sure you
mail all of your payments on time. This will enable you to slowly, but surely, repair your credit. You will
demonstrate to your creditors that you are trustworthy, responsible, and pay your bills on time.
Taking steps towards repairing your credit will eliminate the risk of keeping your credit rating “poor” for up
to seven years. However, after seven years the black marks on your credit will finally be taken off, so
waiting is always an option. If waiting is not an option, take the necessary steps toward credit repair. Obtain
your secured credit card, use it responsibly, and reduce the seven-year sentence of bad credit.
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