Almost everyone knows that credit repair involves getting negative items removed from your credit report. But what most people fail to realize is that there is a second part to credit repair, re building your credit standing with new accounts!
What Is The Best Way To Rebuild Your Credit
The absolute best way for consumers with bad credit to re establish their credit worthiness is with Secured Credit Cards. A secured credit card is just like a normal credit card, only it is secured by your money.
How Does a Secured Credit Card Work
The lenders who issue these credit cards will ask you for a cash deposit that is equal to 50-100% of the cards limit. That means that if your limit is $500 you would need to deposit $250-$500 dollars with the lender.
What Is This Money For?
This money is held in a special account and is there to protect the lender and you in the event you default on your account. If you default the lender gets the money and cancels your account. This protects the lender from a financial loss and you from additional collections accounts on your record.
Will The Card Always Be Secured
In lots of instances the lenders will refund your money and make the account an unsecured account if you maintain a good standing with them. This normally happens in 6 months to a year.
Benefits Of Secured Credit Cards
One of the best parts about these cards however is that they are very very easy to get. In most cases all you need is sufficient income and a good employment record and you can have your account approval in minutes. And most secured credit card companies will let you apply online making the process much faster and easier.
Getting The Most From Your Secured Credit Card
Just make sure that you are responsible with your secured credit card and never take the balance over 50% of the cards limit. And never pay the account late, in fact you may want to set up automatic payment with the card issuer to make certain you are never late! Do this and your credit scores will rise fast!
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