Understanding and Improving Your Credit

How Can Secured Credit Cards Help Me?

admin — Thu, 18 Mar 2010 02:29:41 +0000

Are you looking for a credit line to solve your financial woes, but you don’t have a credit history to back you up in applying for a standard credit card? Then worry no more, because secured credit cards could help you solve your problems without the need for a credible credit history. But how do these credit cards work? What are some important considerations in choosing credit cards for no credit? The answers will be provided below.

What are Secured Credit Cards?

Secured credit cards as was mentioned above are good options for an individual who wants to build his or her own credit history. Most people use these cards as a way to prove their capability of managing their credit and finances so that eventually they could have good credit ratings that will help them qualify for standard and non-secured credit cards.

Companies offering secured credit cards usually require an initial cash deposit from credit card applicants. The initial deposit serves two purposes: first, it serves as collateral of extending credit to someone with no credit history, which could prove to be very risky; and second, the initial deposit serves as the credit limit that an individual could use for making purchases, settling bills, and others.

Still, there are some considerations before applying for a secured credit card. Remember that you need to cash out your initial deposit, so you could have a secured credit card. The amount is usually pegged at $200 or so, and for sure this is a large sum of money, especially when you are in a tight budget.

On Fees, Terms and Conditions

Secured credit cards may also require annual fees from credit card holders as payment for the use of the credit program. So, before getting a secured credit card, you need to read about the different requirements and terms that banks and credit firms provide through their websites and printed materials.

Through these, you could easily evaluate which secured card requires the least number of fees, the lowest rate of interest and the lowest initial deposit requirement. In so doing, you could be guided in choosing the best secured credit card provider that will be suitable to your needs. Once your application has been approved, use your secured card regularly but be sure to make your payments on time, so that you could establish a good credit history.

About the Author
Melanie Mathis is a credit analyst and a writer for 8 years. She has been participating in the programs of NHBS, Inc such as their continuous effort in giving out Free Credit Repair and Building Ebook. NHBS also has a list of recommended Credit Cards for Bad Credit.
Copyright 2010.

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Could I Really Get Credit Cards Even Without Credit History?

admin — Mon, 15 Mar 2010 15:30:01 +0000

The answer to the question above is a resounding yes. Credit firms and banks are now improving their programs so they could provide credit lines to people without credit history and even to those with bad credit history. The purpose behind this strategy is to ensure the continuous flow of money all throughout the monetary system, as well as to help individuals build or repair their respective credit history, so that soon, they might be able to apply for unsecured credit cards.

But what are some credit cards offered to people without credit history and to those who have accumulated large debts?

Build Credit with Secured Credit Cards

Among the most notable credit cards for no credit and bad credit history are secured credit cards. These credit cards may have low initial limits to give the cardholder a chance to build credit without incurring very large debts. Secured credit cards are especially designed for individuals who are about to establish their credit history.

The main requirement for this card is a minimal cash deposit, which will serve as collateral and an essential credit limit. So, the bigger the cash deposit an individual makes, the higher his or her credit limit.

The credit limit for a secured credit card could range from a minimum of $200 to $500 and above. The sum available for credit could eventually increase as long as an individual is able to pay his charges on time.

The high rates and fees are perceived to compensate for the risk of providing credit to an individual who has no credit rating yet or who has been battling a bad credit history.

Build Credit with Student Credit Cards

If you are a student, another way to build credit history is to get a student credit card. Even though college students do not have reliable credit histories yet student credit cards present themselves as effective means to assist young people in paying for their college education. (The New Credit Card Law requires a cosigner so if parents have bad credit, they cannot cosign for their kids)

Unlike a secured credit card, credit cards for students do not require the submission of cash deposit. Nevertheless, college credit cardholders are given an initial low limit until they have proven to be worthy of a higher credit line.

A Word of Advice

Before you go out and apply for any credit card for bad credit or no credit, you need to read the terms of payment and other relevant details about a credit card. Or you may call a customer service representative of a bank or a credit firm so that you could be guided in selecting the credit card that will be suitable for your needs.

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A Closer Look at Secured Credit Cards

admin — Wed, 10 Mar 2010 03:00:28 +0000

A secured credit card is not for everyone but if you are in process of building or rebuilding credit history, it may just be the tool you need. In this article, we will answer the most common questions people have about secured credit cards, also known as credit cards for bad credit.

Who needs a secured credit card?
You may need a secured credit card if you have no credit or bad credit history. Since approval is not based on your credit rating, anyone can easily open a secured account with not hassle.

What is a secured credit card?
This type of card requires the submission of cash deposit in the cardholder’s account. The amount deposit ranges from $200 – $500 and up. Typically, the value of your deposit will also determine your borrowing limit.

Take note that a secured card is different from a debit card. While both require cash deposit, only a secured card provides the cardholder with a credit line. That means it can be used much like a regular credit card where you can pay only the minimum due and carry over your balance for the next billing period.

Should I apply for a secured credit card?
Having a spotty credit or no credit history may prevent you from getting approved for standard credit cards. To build credit, you may start with a secured account.

It is important to choose a secured card Issuer that will report your payments to the three major credit reporting agencies as it is the only way to build credit. By regularly using your secured card and submitting payments on time, you can build-up a solid foundation or repair damaged credit history.

What factors should affect my choice?
In choosing a secured credit card, you need to be very particular about the rates and fees. Understandably, credit cards for bad credit may come with slightly higher fees than regular credit cards. However, by doing research, you can find Issuers that offer a reasonable credit card deal.

Aside from the fees, consider the conditions of the credit card Issuer on specific situations. For example, will you be able to upgrade to an unsecured account after proving your capability to make payments? How long will it take for you to qualify for an upgrade?

How can I rebuild credit with my secured credit card?
Since payment history makes up 35% of your FICO score, you should strive to be consistent and prompt in paying off your balances. Furthermore, just storing your secured card in your wallet will not improve your credit rating. You will need to use it regularly to raise your score.

Does that mean you should carelessly use your credit card for all your purchases? Apart from being an active credit card spender, you need to be a good payer as well. Thus, keep your purchases minimal so you can pay your monthly balances in full and on time.

It is also recommended that you check your credit card bills regularly to make sure that there are no unauthorized charges in your account. Get a copy of your credit report at least twice a year so you can keep track of your progress.

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Do’s and Don’ts On Acquiring a Bad Credit Personal Loan

admin — Mon, 08 Mar 2010 01:02:06 +0000

If you are in need of a personal loan but with bad credit, you can turn to lenders who provide loans for those who are credit challenged. But before you do, below is a list of do’s and don’ts that you must remember.

What You Should Do:

Do check your credit report. You need to know your exact credit standing prior to submitting your bad credit loan application. Why is it important? First, it gives you the chance to correct errors in your report. It is common for consumers to have a lower credit score than they should have because of inaccurate reporting.

Second, knowing your FICO score will help you negotiate for a better deal. Yes, even if you are credit challenged, requesting for a lower rate is still worth a try. Watch out for loan sharks who may try to tell you that have an extremely low score and therefore is not qualified for a good deal. If you know your credit standing, no one can tell you differently.

DO shop around and compare. Never sign up for a bad credit personal loan offer, no matter how great the offer may seem to be, without taking some time to explore your options. Use the internet to gather rates from potential lenders. You can also check the background and reputation of a lending company by reading reviews online.

Do ask for professional help. People who are stuck in bad debt are advised to seek help from a legitimate credit counselling agency or from a trusted credit repair specialist. A counsellor who specializes in bad credit cases can assist you, not only in finding the right lending company, but also in managing your finances and in creating an efficient debt repayment plan.

What You Should Avoid:

Don’t look at the rates alone. The interest rate is important but that’s just one factor with a loan. Aside from finding a reasonable rate, you’ll also want to compare the fees associated with your bad credit loan. Some lenders may try to entice borrowers into signing up by offering an incredibly low rate – one which is bound to increase the moment your cash is released. If you look closely, you may be surprised that there are lots of extra fees and hidden charges.

Don’t take out a loan unless it’s an emergency. Ask yourself, do I really need to apply for a loan or do I have other options? It would be better for you to focus on improving your credit by paying off your debts and keeping up with your current payments. Taking out a new loan can only add up to your burden.

Don’t borrow more than what the situation calls for. Even if you can get approved for a bigger loan amount, it’s best to keep it minimal. Remember that the best deals are exclusively offered to customers with good to excellent credit. Since you have an unimpressive credit rating, you will not be able to qualify for the best possible deal. Therefore, borrow only the amount you need and be cautious about your spending.

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Instant Credit Approval Credit Card – Is It A Wise Choice?

admin — Thu, 04 Mar 2010 15:43:26 +0000

Before applying for an instant approval credit card, consumers are warned against making hasty decisions. Since the application process is so quick and easy, you’ll want to spend more time in evaluating what each card offers and compare it with your personal needs and lifestyle.

What Are Instant Approval Credit Cards for Bad Credit?

For people with a high credit score, getting approval from the best unsecured credit cards in the market should not be a problem. Nonetheless, for those with a history of bad credit or with a low credit score, they can count on instant approval from credit card companies that offer secured cards or bad credit credit cards.

Secured credit cards are also known as “credit cards for bad credit” or “credit cards with instant approval” because anyone can get approved regardless of his/her credit rating. However, the applicant will be asked to submit a security cash deposit. Thus, in case of default, the Issuer can tap in the cardholder’s account and use the security deposit to pay off the charges.

Instant approval does not mean you can expect to get a credit card on the same day you submit your application. After submitting your application online, you can get a response from the Issuer within minutes. If approved, your credit card will be sent to you through post mail and may arrive in your doorstep within 5 to 7 banking days.

The Do’s and Don’ts

It is important to note that your interest rate may also depend on your credit score. Although you are guaranteed to get an approval, your APR will still be based upon your rating. Therefore, it is still recommended that you check your credit report before applying for an instant approval card.

Should you find errors in your report, do send a dispute letter to the bureau that issued your report and request for corrections. Improving your credit score even by a few points can significantly reduce your credit card’s APR.

Never sign up without reading the complete Terms and Conditions. Pay attention to the interest rates as some cards may impose three different APRs on purchases, balance transfer, and cash advances. Although the new credit card law restricts credit card companies from increasing their rates without warning, you may find yourself stuck in bad deal if you do not check the fine print.

In addition, do not submit multiple applications to different Issuers just to see which one will give the quickest response. Doing so will result to too many inquiries in your credit report and may only do more damage to your credit history.

Is it A Wise Choice?

Should you apply for an instant approval card? When used correctly, instant approval credit cards can be great tools for rebuilding bad credit history. Find a secured credit card that will report your payments to major credit reporting agencies (Equifax,TransUnion,Experian). This way, as you use your secured card for paying bills or making purchases, you are also improving your credit score one step at a time.

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Can I Get An Instant Approval Credit Card?

admin — Mon, 01 Mar 2010 06:38:29 +0000

If you have an excellent credit history, finding a credit card with instant approval should be easy for you. However, for people with unimpressive credit rating, getting approved can be a little more difficult. The good news is that there are credit card issuers that offer guaranteed approval even for those with bad credit.

This post provides practical tips on how you can obtain an instant credit approval card. But first, let’s define what the term “instant” really implies:

Instant or Quick Approval

Many Issuers today enable consumers to submit their applications online. Some Issuers even offer a response within 1 minute upon receiving your application. Such a process is definitely quicker and more convenient than going to your nearest bank to fill out an application.

Once approved, your instant approval credit card will be delivered via registered mail which can take between 5 to 7 banking days. After receiving your card, you must activate your account by calling your Issuer and then you can use it for payments.

Why Check Your Credit Report

Before sending out your application, it is recommended that you get a copy of your personal credit report so you can check it for errors or any inaccurate information. You may ask, since I can expect instant approval, why should I bother to look into my credit report?

Errors in your report could be unnecessarily pulling down your credit score. Remember that your actual rating can actually make a big difference with your credit card’s interest rate. Raising your score by even a few points can reduce a significant percentage in your APR.

Instant Approval for Bad Credit

Yes, you can still get a guaranteed approval credit card despite a poor credit rating. Needless to say because you are considered as a high risk customer, you will be offered a secured credit card. Is there a special requirement that you need to know?

The only requirement for a bad credit credit card is the security deposit. The amount can range from a minimum of $200 to as much as $500 for personal secured cards. Meanwhile, a higher security deposit may be required ($1,000 and up) for those who need a higher credit line. Generally, the credit limit extended to the cardholder will be equal to the value of the security deposit.

Don’t Hurry, Shop Around

Although approval is guaranteed, consumers are strongly advised to spend time comparing choices. You can use credit card review websites to see which Issuers provide the best instant approval cards in the market.

Whichever you decide to choose, see to it that you have carefully read and understand the fine print before submitting your application. Last but not least, make sure that your chosen instant approval card offers credit reporting to the three major credit bureaus.

As soon as you get your card, use it to start rebuilding your bad credit rating. Truly, instant approval credit cards offer consumers the chance to rehabilitate their damaged credit history by making prompt and consistent payments.

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How to Avoid Unscrupulous Bad Credit Loan Brokers?

admin — Fri, 26 Feb 2010 14:19:55 +0000

Seeking approval for a bad credit loan, particularly a home loan can be very difficult if you have bad credit history. If you are in the same situation, you may consider getting assistance from a mortgage loan broker.

A mortgage loan broker is a specialist in the field of mortgage lending and would surely be able to help you find a suitable lender to finance your home purchase. Aside from getting approved, a broker can assist in getting you the best possible rate despite your poor credit rating.

Nevertheless, consumers must watch out against unscrupulous bad credit loan brokers. Who are these people and how can you avoid dealing with one? Check out the rest of this article to find out.

Signs of Unscrupulous Bad Credit Loan Brokers

Irresistible Offer. A dishonest broker may trick you into signing up for the wrong mortgage loan by making a very tempting offer – one that’s hard to resist. For instance, you may be offered an incredibly low interest rate, a low down payment, and an instant approval despite your bad credit. What’s the catch?

As soon as you sign up your bad credit loan contract, that’s when things can get ugly. You may suddenly be informed that the terms of your repayment has changed and you are left with a mortgage that is packed with high interest rate and expensive fees.

Although this is an illegal lending practice, there are predatory lenders that get away with it. And with the help of deceitful brokers, many borrowers become victims of predatory lending each year.

Instant Approval. Watch out for brokers who guarantee your loan’s approval without going through the standard validation process. If a lender is willing to grant approval without first considering the risks, you have every reason to doubt the motive behind it.

For instance, lenders who provide bad credit home loans do conduct income verification or require permanent employment from a potential borrower. To make up for your bad credit history, you need must be able to show proof that you are capable of repayment, especially since mortgage is a long term debt.

Miscellaneous Fees. If a certain broker demands upfront fees without showing you the actual Terms and Conditions of the loan, you might as well look for another broker. It is true that loans for bad credit may have higher interest rates and require a larger down payment but you should never hand out money to your broker unless you have already signed up for the loan.

Never sign up a loan application without examining the Terms and Conditions yourself. Verify if the information you get from your broker are facts by doing your own research as well. Check the broker’s background and credentials before hiring their assistance.

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Improve Poor Credit Rating with Bad Credit Credit Cards

admin — Mon, 15 Feb 2010 11:06:02 +0000

The way to get a credit card with the best deal (low rate, low fees, high credit limit, big rewards) is to have good or excellent credit history. But what if you have an imperfect credit rating? Does this mean you cannot apply for a credit card?

Use a Credit Card to Recover from Bad Credit

The good news is that you can use a subprime credit card to recover from bad credit history. Bad credit credit cards are especially offered to people who cannot qualify for standard credit cards because of poor rating.

Even with bad credit, anyone can get easily approved for a secured card. The only requirement is to submit the required security cash deposit. The deposit can range from $300 to $500 or higher depending on the Issuer. Usually, the amount you deposited will match your credit limit. Although Issuers may offer a credit line slightly lower or higher to the value of the deposit.

There are three important things to remember when choosing a bad credit credit card. First, is to find a credit card that will report your payments to the major credit bureaus. Second is to choose a card with a reasonable fees and interest. Third is to submit your payments on time at all times.

After a least a year of consistent payment, your Issuer may automatically give you an upgrade to an unsecured account. That means enjoying a lower APR and a higher credit line. Nevertheless, if your Issuer does not automatically give an upgrade, don’t forget to make the request.

Strategies to Rebuild Bad Credit

It is recommended to always pay your full balance to avoid the additional interest rate fees. Keep in mind that secured cards usually have higher APR than credit cards that require good credit. Submitting only the minimum required due can be risky. The longer you delay in paying off your outstanding balance, the more it will cost you due to the interest rate costs.

Take note that you should use your credit card regularly to improve your credit rating. Just having the card in your wallet will not make a difference. However, if you want to use your card, see to it that you can afford to pay off your balance on time.

Before signing up for a bad credit credit card, make sure that you have considered the complete Terms and Conditions. Different Issuers have varying rules in providing credit cards for people with poor credit history. You need to know what these exact rules are right from the beginning. If there are certain phrases or terms in the fine print that you do not understand, do not hesitate to do more research or ask an explanation from the bank’s representative.

Getting the Best Credit Card for Bad Credit

admin — Thu, 11 Feb 2010 03:02:58 +0000

Are you in search for a bad credit credit card? If yes, then this article can help you better decide which credit card for bad credit can truly help you rebuild credit history.

The Hunt for the Right Bad Credit Credit Card

Many credit cards for bad credit are associated with high interest, high fees, and high deposits. Although you may not be able to qualify for the best deal because of your poor credit history, bear in mind that you must never settle for a credit card that can only put you at a greater risk of bad debt.

The New Credit Card Law has imposed a new restriction on bad credit credit card fees. Today, upfront fees cannot exceed more than 25% of the cardholder’s credit limit. Also, watch out for no annual fee credit cards for bad credit. If indeed, no annual fee is required, see to it that there will be no hidden fees or expensive interest rates to make up for the free yearly cost.

Choose a Card that Matches Your Personal Needs

The amount of security deposit required depends on the Issuer and can range from $300 to $500 or more. If you really need a higher credit line, then you should be ready to submit a higher cash deposit. Nevertheless, it may be smarter to start with a low credit line so you can control your spending and focus on rebuilding your credit history.

Use a comparison tool from a reliable credit card review website. Match up the interest rates, fees, credit limit, etc. Once you have narrowed down your choices, visit the official website of the credit card issuer to review the complete terms and conditions.
Make it your goal to use your secured credit card to rebuild your bad credit. See to it that your payments will be reported to the major credit bureaus (Equifax, Experian, TransUnion). Also, ask your Issuer if you can automatically get an upgrade to an unsecured account you have shown consistent payment for a certain period.

After receiving your secured credit card, use it to pay for your important bills. However, avoid the risk of debt build-up by paying off your full balance on time at all times. Stick with just one bad credit credit card and be sure to review your billing statement each month.

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How the New Credit Card Law Can Help You

admin — Mon, 08 Feb 2010 11:33:09 +0000

President Barack Obama signed the New Credit Card Law on May 22, 2009. The first batch of changes already took effect on August 2009 while the rest will take effect on February 22, 2010. Below are the highlights that you’ll be glad to know:

Controlled Interest Rate Hike. Increased rates are still allowed but only on these three conditions:

The promotional rate has expired
The Variable Index Rate has increased
The cardholder has been delinquent for 60 days or more

Under the New Law, the “Universal Default” clause is not allowed. Furthermore, if the rate will change, the Issuer must give advanced notice at least 45 days prior to the new rate.

The privilege to opt out. If upon reviewing the changes in the Terms and Conditions, the cardholder is unhappy about it, he/she can opt out, close out the account and pay off the balances under the old Terms. The repayment period can last up to 5 years.

Student credit card restrictions. Young people under the age 21 cannot open an account on their own (co-signer is required) unless they can show proof of independent income. In addition, Issuers are not allowed to do advertising campaigns within 1,000 feet from college campuses.

More opportunity to make payments on time. The new law requires Issuers to send a billing statement 21 days before the due date. That is a much longer time compared to the old 14-day billing notice. Cut-off times must be set after 5 pm. Also, late fees cannot be imposed if the due date falls on a weekend or a holiday.

Highest rate balance must be slashed off first. Payments made must be applied to the highest-rate debt first. Thus, quick debt build-up can be avoided and cardholders will have an easier time paying off their entire balance.

No double-cycle billing. The double-cycle billing is based upon the previous and current balance so finance charges can be higher than its supposed to. Under the New law, the double-cycle billing is not allowed.

Lower fees for subprime credit cards. People who want to apply for a bad credit credit card can find relief knowing that the upfront fees cannot exceed 25% of their credit limit.

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