Secured credit cards are becoming increasingly popular for those who are trying to rebuild their credit and get a new lease on life. There are many issues that can take place in life that can directly impact our credit score. Delinquent accounts, repossessed cars, and home foreclosure are three major reasons why some people have horrible credit ratings. If you are in the same boat as so many others, you should definitely take secured credit cards into consideration.
Secured credit cards work differently than all of the other type of cards that are on the market. Prepaid credit cards and debit cards do not report to the credit bureaus. That means that you may be able to keep your account in the green for months or even years, but the credit agencies will never be able to find out about it because the companies are not required to report if you have or have not made payments on time.
A secured credit card is reported and can help you learn how to repair your credit yourself. Getting a prepaid credit card is very easy because you are essentially loading money directly onto the card. A secured credit card requires you to put down a deposit toward the card.
This ensures that the company doesn’t have to worry too much about you failing to pay the bill each month. When you apply for the secured credit card, it is important to take the time to make sure you understand all stipulations associated with the card. The bills must be paid by a specific date. If the bills are not paid on time, the company will report the delinquency to the credit agencies and it will impact your overall credit score.
Likewise, if you pay the bills on time, the companies will report it to the credit agencies and you will be able to improve your credit score. It is often recommended to pay extra each month to ensure that you cut the repayment time down as much as you can. It looks good to companies when someone pays off their debts as quickly as they can rather than only paying the bare minimum.
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