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Tired of living with Bad Credit?​


                     Credit Building Credit Cards ​​

​​First things first — there are two different credit card options for people with poor credit, and those are unsecured and secured. Unsecured is what the majority of cardholders carry, and does not require any money down to get a line of credit. Secured, on the other hand, does require a deposit to secure a line of credit, hence its name.​​

Secured credit cards are generally for people on the lower-end of the credit score spectrum (less than 600), as the deposit is the issuer’s way of protecting itself in the event a payment is missed, in which case it’s then deducted from the deposit. Oftentimes, the amount you’re able to put down as a deposit is the credit limit you’ll be issued, and most issuers have minimums for this amount, usually ranging between
$300 and $500. 

Secured cards work well for those who do not need a large amount of credit (equal to the deposit), but also have the capital to put down for it. This is truly an option for someone who isn’t necessarily in need of a loan, but rather using the card to rebuild their credit. This works because payments will be reported to the credit bureaus, who keep record of your credit history, aka your credit report.

Click to view list of secured and unsecured credit cards that comes highly recommended.

​Now that you understand the difference between unsecured and secured, and have hopefully decided which is best for your credit and spending needs, the next step is learning how to use the card to achieve your credit repair goals.

First and foremost, choosing a card that reports payments to the credit bureaus – Experian, Equifax, and Transunion – is THE MOST IMPORTANT factor. Otherwise, your credit card is useless for improving your credit. A prepaid card, for example, will not have any effect on your credit score as prepaid cards do not report payments. Some cards may only report to one or two bureaus, while others will report to all three.

Simply being approved for a card and having it won’t magically improve your score, though it can have immediate effects on your credit utilization ratio or your mix of accounts, which is just a part of the factors that determine your credit score.

The reality is having a credit card can hurt your score the same as it can help improve it. It all comes down to responsible usage of the card, which can be done by following a few best practices:

Always pay your bill on time. On-time payments is the most heavily weighted factor used to determine your credit score.

Keep your credit utilization below 30%. This means if you have a limit of $1,000, never have a balance of more than $300 on your card. If you can go lower than 30%, even better! Using a high percentage of your available credit hurts your credit score. 

Pay more than the minimum each month, if possible. Better yet, always pay your balance in full to avoid paying interest and to increase your scores faster! This is especially true for cards with rewards, otherwise the interest paid will outweigh the rewards earned.

Try to select cards that give you the option of turning it into a Unsecured Credit Card after a certain amount of on-time payments.  Let’s face it; interest rates are high on secured credit cards; being able to switch over to an unsecured card as soon as possible will save you a lot of money over time in interest fees.