Find a Secured Credit Card So I Can Fix My Credit Score
You must be asking yourself how can I fix my credit score? Your three-digit FICO credit score matters. Lenders will study this score when you are applying for a mortgage loan. They’ll weigh it when you need an auto loan. And they’ll focus on it when they are assigning you interest rates for the loans they give you. Sometimes you need to rebuild credit, and the easiest way to do this is with a secured credit card.
In this article: Get a low fee secured credit card with no annual fee!
Having a low credit score, then, can be a financial hurdle. It can make qualifying for a new loan or credit card a challenge. Low fee and no annual fee secured credit cards are the least expensive way to rebuild and repair credit.
It’s important, then, to rebuild your credit score if it is damaged. One of the best ways to do this? Find a secured credit card — one whose credit limit is tied to a deposit you make with the bank issuing it — use it and make your payments on time every month.
Do this for a long enough period of time, and you will steadily rebuild your ailing credit score.
I Need to Fix My Credit Score – How do credit scores work?
Your FICO credit score measures how well you’ve paid your bills and managed your credit in the past. Several factors make up your score. In general, though, if you pay your bills on time each month and don’t run up too much debt on your credit cards, you’ll have a good score. If you do the opposite, your score will tumble.
What makes for a good FICO score is up for discussion. But most banks consider FICO credit scores of 740 or higher to be excellent credit scores. If your score is at this level or above, you’ll usually qualify for loans and credit at lower interest rates.
If your score is too low, below 640, you might struggle to qualify for loans or credit at lower interest rates.
You can access each of your three credit reports — one each maintained by the three national credit bureaus Experian, Equifax and TransUnion — once every year at AnnualCreditReport.com. These reports list your open lines of credit and any missed or late credit card bill payments you might have.
They don’t, though, list your three-digit credit score. If you want your FICO score, you can pay about $15 to any of the three credit bureaus. They will then send them to you.
Rebuild and Fix My Credit Score
If your credit score is weak, there is one solution: You can rebuild and restore credit by paying your bills on time every month and by reducing your credit card debt. This requires balancing how much of your available credit lines you should be using monthly.
You want to know how to repair credit yourself. Just don’t expect this to be a quick process. It can take months or a year or more to boost your credit score back to an acceptable level. There are no shortcuts for this. No company can magically wipe away legitimate late or missed payments or other negative financial marks such as bankruptcies or foreclosures.
You can, though, speed along the process by using credit wisely. This can mean making regular payments with a credit card and then pay off what you charged in full every month, so you won’t have to worry about paying interest. Making these on-time payments every month will provide a steady series of bumps for your credit score. The key, of course, is never to charge more than what you can pay off in full each month. You don’t want to carry a balance from one month to the next.
But what if you have no established credit history and no credit cards? And what if your FICO score is so low that you can’t qualify for traditional credit cards? It might be time to choose a secured credit card.
I Need to Fix My Credit Score – How a Secured Credit Card Works
With traditional credit cards, the bank or financial institution issuing the card assigns you a set credit limit based on the strength of your credit. With a secured credit card, though, you set the credit limit yourself with an initial deposit.
When you apply for a secured card, the bank issuing it will require a deposit of your money. If you deposit $1,000, the credit limit on your new secured credit card will now be that same $1,000. You can charge up to $1,000 with your card, but no more.
Other banks will use secured credit cards in which your credit limit is a percentage above what you deposited. So if you deposit $500, you might end up with a higher credit limit of $600.
It’s far easier for consumers with low credit scores to qualify for secured credit cards. That’s because the bank issuing these cards is eliminating its risk by securing the card with your initial cash deposit.
Low Fee Secured Credit Card With No Annual Fee
A secured credit card that earns rewards – The Discover it® Secured Credit Card
A secured credit card in most cases won’t come with the rewards programs. One exception is The Discover Secured Credit Card. While it won’t come with a large credit line, this Secured Discover Card will earn cashback rewards from day one. With on-time payments, your credit line will increase. There is no annual fee with The Discover IT® Secured Credit Card.
Lowest Fee Secured Credit Card – Capital One® Secured MasterCard®
The lowest fee secured credit card is the Capital One® Secured MasterCard®. This card has the same fee structure as the Discover secured card, but one difference. With the Discover Secured Card, the deposit minimum is $200. The minimal refundable security payment of the Capital One Secured card is $49, $99 or $200 for a $200 credit line. With Capital One if your credit isn’t too bad your security deposit is less. There is no annual fee with Capital One® Secured MasterCard®.
But making payments on a secured credit card will help your FICO score increase over time. The key, again, is to use the card each month but only to charge what you can afford to pay off in full on each payment deadline date.
Fix My Credit Score – Secured Credit Card
As you make payments on time, the bank issuing your secured credit card might automatically increase your credit limit past the amount you initially deposited. And as your credit score improves, you’ll be able to qualify for traditional credit cards.
You will, though, have to shop around before selecting a secured card or credit card application for bad credit. As with all credit cards, secured ones come with a range of interest rates, fees, and penalties. Make sure to choose a secured credit card that doesn’t come with an exorbitant interest rate. And never choose a credit card that requires an application fee.
Your secured card might charge an annual fee, many do. Shop around to find the card that charges the lowest yearly maintenance fee.
Secured credit cards aren’t ideal. Their lower credit limits mean that they are not as flexible as traditional credit cards. But if you are saddled with a low FICO credit score, applying for, and properly using, a secured credit card might represent your surest path to healthier credit.
Reviews of the Best Secured Card Offers With Applications
|Capital One ® Secured MasterCard ®||Discover it® Secured Credit Card|
|Citi® Secured Mastercard®||OpenSky® Secured Visa® Credit Card|
CreditSoup® Secured Cards
Advertiser Disclosure for the CreditFast website – CreditFast.com, provides information about the best credit card applications, as well as other financial products and services. Our goal is to provide you with fair, balanced reviews. Some credit offers that appear on our website are from companies from which CreditFast receives compensation, and some are not.