Secured Credit Card (DOC)

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					Rebuild Your Credit With Secured Credit Card

Having good scores and history is a necessity if you want to be able to get approval
for loans at good terms. Many people with bad credit find to their horror, that it is not
easy for a person with bad credit to get loans, utility services, employment and some
even get passed for promotion. When they realize this, they try to rebuild their credit.
One of the best ways in which you can begin this work is to get a secured credit card.

Secured credit cards are those that use the money in your checking account as the
limit of the card. When you are using such a card, you are paying for all your
expenses from the money in your account. Therefore, you cannot cross the limits and
will have to make do with what you have. This is a good way of building credit as
there are no chances of debt incurred.

To get a secured credit card, contact your bank and get yourself approved for such a
card. You will have to deposit money that is equivalent to the limit of the card and
can use it. It is like a collateral and when you make regular payments with these cards,
they get reported to the credit bureaus causing an improvement in your report and
increase in your credit scores. You can now establish a good credit history that shows
payments made on time.

It will be easy for you to get carried away when you are using a secured credit card
but remember that though you are paying for expenses incurred from the money that
is available in your account, the rules of credit utilization ratio are still applicable.
Follow the rule of 30% balance that is applicable on other credit cards and never max
them out. This will not help you to build good credit.

Over a period of time, if you are good with your payments, do not max out your card
and follow all credit rules, you will be able to get an unsecured credit card with a
good credit limit. But do not make the mistake of cancelling your secured credit card
as it can be used for calculating the length of your credit. Quite possibly, when you
become eligible for unsecured credit cards, you will find that you have fallen into the
habit of using a secured credit card and may not want to change.

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