Secured Credit Cards – Great Way to Rebuild Credit
Last Updated – June 24, 2010

Bounce back fast after a bankruptcy by carefully rebuilding your credit by applying for and using secured credit cards. A secured credit card requires you to deposit money with the lender and your credit limit is equal to the deposit.

There are a lot of “bad” secured credit cards, so you want to make sure you do your homeword first before getting one of these cards. Getting the right one and using it the right way, will go miles in the journey of rebuilding your credit and increasing your credit score.

A Secured Credit Card Should Have the Following:

• Have no application fee and a low annual fee.
• Convert to a regular, unsecured credit card after 12-18 months of on-time payments.
• Be reported to ALL THREE credit bureaus.

Reporting the Balance to the Bureaus

Credit scores take into account the total amount of credit available to you and the current balance you have on your cards. They use this to calculate your debt ratios which is:

Current Total Balances/Current Total Credit Limits = Debt Ratio.

If they are not able to do this calculation, they will just guess what the limit is and this is going to be your current credit card balance or 100% of your credit limit used. Remember in the credit scoring article, the scoring model likes to see 25% or less of your credit limit used.

Are They Reporting the Credit Line as “Secured”?

If you get a card which reports to the credit bureaus that it IS a secured card, your credit score will also take a hit, even if you are paying on time.

Similar Posts:

• Three Tips To Help Increase Your Credit Scores Fast
• They Reduced My Credit Card Limit – Does it Hurt My Credit Score?
• Secured Credit Cards Takes Financial Reform in Stages, Part II
• Does a Secured Credit Card Help Your Credit Scores or Not
• Increase Credit Score How Bad Credit Can Affect Your Life and What To Do About It