subject: How To Re-establish Your Credit Score [print this page] So, we all know, it's almost impossible to get by with bad credit. For consumers to move into an apartment, get a charge card account, rent a house, buy a house, buy a car or really buy anything big ticket, a great deal of people need to face the credit check! This is when the company checks the Americans credit to see what risk is involved in loaning money or space to that consumer. So, with that said, it's hard to get by without having at least fair credit.
Now, I have read a few articles that say people can establish credit using new cell phone contracts, cable contracts or even by buying a car at a buy here pay here. However, cell phones take a while to build credit and so do utilities bills. And, who wants to buy a car from a buy here pay here? There's got to be a better way to build credit than that!
Actually, there is. Many consumers have have established good credit scores by using secured charge card accounts. Secured credit cards are like any other kind of charge card. Consumers can use secured charge cards for purchases and even cash advances. The only difference between secured charge card accounts and unsecured charge card accounts is that unsecured charge cards are backed by the signature of the consumer using the charge card and that is it. However, with secured charge cards, Americans must place a security deposit that will now back the purchases should the consumer not make payment.
Getting a secured charge card is pretty simple. There are quite a few credit card account websites that offer them. Two that come to mind off the top of my head are JEMCreditCards.com and The-Card-Mart.com. Simply apply for the best offer available and send in the security deposit. After the deposit is paid, Americans will receive the charge card account shortly.
Once Americans have the credit card account, it is important to use it responsibly. This is the real "credit building" process. A few tips to help build your credit with secured credit cards:
Always keep balances below 50% of the credit line on the account. This means if you can spend $500 on your credit card, you should only have a balance of $250 or less at any given time. Spending more than 50% of the credit line signifies financial hardships and can actually cause harm to consumer credit scores.
Never make a late payment: This is a big part. It is important to always send payments at least 2 weeks in advance. This is because it takes time for the banks to process payments and it allows for the occasional delay in postal service! Making a late credit card payment can have adverse affects on consumer credit scores.
Send more than the minimum: Many Americans get caught up in what I like to call the minimum payment trap. This is when all they send to their credit card companies is minimum payments and it takes forever to pay off the debt. Also, sending only the minimum payment can signify financial hardship and delay the credit building process. It is a best practice to try and at least double the minimum payment each month!
