If you have had past credit issues or are having trouble getting approved for financing, it is important to get on a path towards improving your credit history as soon as possible.  One way to rebuild poor credit is by getting a secured credit card.  A secured credit card is similar to a debit card but spends like a credit card.  You deposit funds on to the card, which becomes your credit limit, and then spend against those funds.

Typically, bad credit is a result of bad payment habits.  With a secured credit card, debt is not an issue since you can only spend the amount you have deposited on to the card.  Use your secured card to make purchases you can afford to pay off at the end of the month.

Look for a secured card that reports to the credit bureaus as unsecured (Ask the bank representative who you speak with).  If you cannot find one, many credit card companies will allow you to convert your secured card to an unsecured card after you have established a good timely payment history.  Make sure that the creditor reports to all three credit bureaus (Equifax, Trans Union, and Experian). 

Of course, getting a secured credit card is just one tool to use in the process of rebuilding your damaged credit.  The thing to remember is that there are two important aspects to successful credit repair: 1) Removing negative and incorrect items and 2) Establishing new positive tradelines/accounts.  A secured credit card will help immensely to establish new credit, since it is often difficult to qualify for an unsecured credit card right away if you have had past credit issues.  A secured card is backed by your cash deposit, so your credit score is rarely taken into consideration when applying for this type of account.

If you need help setting up a solid long-term strategy for eliminating debt or rebuilding credit, feel free to call my office to set up a free no-obligation consultation.  You can reach us at 1-888-456-5635. 

Your Friend,

Robert Weinberg