Author: Farra L. Winters

Secured Credit Cards #WhatAreThose

Do you have bad or wavering credit? Are you trying to rebuild your credit so that you can progress towards your goals of financial stability? Secured credit cards can help you obtain the desirable credit score that you crave. Credit cards of this caliber require a down payment of around $200 of your own cash. This initial investment goes towards improving your damaged credit score.

An article on Bankrate provides 10 questions to ask before getting a secured credit card paired along with answers that will help you determine whether or not these cards are the right choice for you. The most vital question to consider before committing to a secured credit card is “are you able to pay the entire bill each month?” If the answer is no, then secured credit cards are not for you. These cards carry a heavier interest rate than unsecured cards. So paying them off each month is quite imperative.

Tina Fey Credit card

Keep Credit Utilization Under 30%

Credit utilization accounts for 30% of your total credit score. People with credit scores within the range of 701-759 have an average utilization of 27%. For individuals with scores within the range of 651-700, the average credit utilization is 47%. This accounts for the largest credit utilization gap of any score band. Average balances for people with scores within the range of 651-700 are about $3,000 higher than those with scores within the range of 701-750. To check your score for free and to dispute discrepancies with your credit score, download the Credit Karma App on your phone today.

Been there done that

Pay in Full Each Month

The best way to ensure an immaculate credit score is to, of course, pay your credit debts on time and in full each month. If this is a new practice towards rebuilding your credit, remember that a raise in your credit score will not happen overnight. The Mint app can help you track your payments on the go and best of all, for free.

Payment history accounts for 35% of your overall credit score. Therefore, this practice must manifest into a habit that occurs once every month. Stay mindful, keep an alert on your phone that notifies you that it is time to pay your bill, or better yet check your email. Most credit card companies keep their debtors informed about their upcoming payment at least 28 days before the payment is due.

overdue

Do not let this be you at the end of the month.

Myths Busted

Inexperience and lack knowledge about the world of finance and credit could lead someone to believe that simply closing older accounts may improve their credit score. The truth of the matter is that closing old credit accounts, even if they have a zero dollar balance, will NOT affect your credit score positively. In many cases, it will have a negative effect. In fact, there are five different types of credit accounts that you should never close due to the negative impact it will have on your credit score.

 

 

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