Secured credit cards for bad credit are equivalent to getting a new start on re-establishing credit. The amount of the credit limit someone receives is usually equal to the amount of money they deposit into their account. These cards are great for being able to rent a car, and make purchases, but are they really effective for boosting credit scores?
The answer to that question is actually yes and no. Obtaining a secured card alone will not make a drastic change as far as boosting your credit score in the short term. On the other hand, if you make payments on time and maintain a low balance, you will notice a significant change in your credit score. The key relies on your ability to be discipline.
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The amount of points your credit score rises also depends on the amount of your initial deposit. The more money deposited into the bank account of the secured card provider, the better it will reflect to the credit bureaus. Since the majority of secured cards do not report to the credit bureaus as secured, bigger deposits give the appearance of being more granted credit.
Another determining factor is the length of time a secured card has been opened. A card has to show at least six months of on time payments to begin to have some real weight with creditors. Mortgage brokers and other big purchase lenders are looking for at least 2 years of good on time payments and also a low balance on the cards. A consumer can achieve great increases in credit scores if they can maintain these guidelines.
Some consumers that are serious about re-establishing their credit by utilizing bad credit secured credit cards have experience increases from 20 to 50 points. These results can vary for each individual and is can only happen if there are not any additional negative items being added to the credit profile.
When attempting to re-establish credit history, it is important to track the progress of your efforts. A good way to track progress is by utilizing a credit monitoring company. These companies can notify you when there are changes to your credit profile and also alarm you when new items appear. This can go a long way in letting you know what is working from what is not working.
Bad credit is a situation that unfortunately many people have to go through everyday. The good news is that there a ways to remedy the situation and get a second chance. Bad credit secure credit cards are definitely effective in helping consumers get that new start. The level of effectiveness these cards can generate is totally up to the discipline of the consumer.
Secured Credit Cards - How Much Will a Secured Credit Card Boost My Credit Score?
Getting a secured card is a good beginning to improving your credit score, the first step however must start with getting a copy of your free credit scores and report.