Millions of consumers struggle with real life circumstances every single day.
We wake up and tell ourselves that "one day" we will be in a better position to take action on our bad credit situation.
We struggle with not enough credit, no credit history, collection accounts, charge off's, repossessions and even foreclosures.
How do we bounce back after these devastating events show up on our credit report? When we apply for credit we get told, "You don't have enough credit" or "You have a negative credit history".
The normal response is usually you need to rebuild your credit history.
But, how do you rebuild it when no one is willing to extend you credit? Where do you turn to for help? Now, you may hear all the time that a secured credit card is one of the best way to rebuild your credit.
This is very true but there are some things that you need to watch out for.
1.
Does the secured credit card report to all three credit bureaus (Experian, Equifax, & Transunion)? 2.
Does the secured credit card report as a "secured credit card"? 3.
Can you increase your line of credit? 4.
Is there an option to convert a secured credit card to an unsecured credit card? The first two questions are the most important, the last two questions are nice perks to have.
When you start with a secured credit card, you need to find out if that card reports to all three credit bureaus.
It is a must to report to all three bureaus to get the maximum benefit of this tactic.
If the card only reports to one bureau then it may not be your best option.
Think of it like this, when you buy a house, lenders base your approval on your mid score.
If your scores are 578, 605 and 620 your mid score would be 605.
Now, if you choose a secured card that only reports to one of the bureaus, you're still in the same situation as before.
So, let's say that 620 score jumps up to 640, a 640 this score is perfect for FHA approval, however, this only got reported to the one bureau, so you mid score did not change.
Your mid score is still 605 so the secured credit card that you thought was going to be the difference to help you get that new loan did not benefit you at all! If the secured credit card reports on your credit report as "secured" this doesn't look good either.
I'm not saying that it will not have a positive effect on your credit score, but, you really don't want this.
In a sense, when a lender sees only unsecured credit lines on your report, they may be influenced to think that you are not trusted with an unsecured line of credit.
There are other secured type options out there that report as unsecured, but they are very few and far between.
One card that I can recommend is the Public Savings Bank secured credit card.
This reports as unsecured and it will also report to all three credit bureaus.
This is a great way to rebuild your credit and show that you are trusted with an unsecured line of credit.
If you play it smart you wont have to rely on this tactic, but it is helpful.
There are other ways you can get a huge increase in your score just by following some very simple credit repair tactics.