Can You Boost Your Credit Score With a Secured Credit Card?
When thinking about improving your credit score, you may want to consider getting a secured credit card. Max CashⓇ is here to help you learn more about reading through your credit report, accessing your credit score, and obtaining a secured credit card!5
While you might already know how important your credit score is in terms of getting a loan, apartment, or credit card, you might not know how regularly you should be checking your credit score. Most financial experts recommend that you check your credit score at least once a year and more often if you are planning to take out a loan or get a new credit card in the near future. Checking your score regularly can help you identify any issues and take the necessary steps to improve your score. Accessing your credit score and reading your credit report should be simple, especially if you have the right tools to get the job done. Responsible use of this card can build your credit, improve your financial stability, and help you achieve your financial goals.5
- Check Your Credit Report at Least Once Per Year
- Understand that Secure Credit Cards Will Require You to Put Down a Deposit to Secure Your Available Credit Line
- Learn How to Use Your Credit Cards Wisely
What is a Secured Credit Card?
A secured credit card can be an ideal option for building credit, whether you’re just starting out or rebounding. Secured credit cards offer many benefits, such as building a solid credit history, helping you establish a positive payment history, and providing you with access to credit.
How To Use a Secured Credit Card To Build Credit
Secured cards work like training wheels for credit.
You put down a deposit as collateral, and that becomes your credit limit. The amount that you can put down will depend on the provider you are working with, along with a few other factors.1
As you use the card and make payments on time, you’ll build your credit history over time. Make sure to choose a secured card that reports to all three credit bureaus, and preferably one that can be upgraded to an unsecured card down the road.
In order to make the most of a secured credit card, use it responsibly, pay the full balance each month, and never max out your available credit line. Doing so will increase your overall credit utilization, which will often negatively impact your credit score.
How to Boost Your Credit Score with Secured Credit Cards
Here are a few tips on how to boost your credit score with secured credit cards:
Select the Right Card
If you want to establish a positive credit history using a secured card, then choosing the correct credit card that will suit your requirements is needed. This stems from the fact that not all secured credit cards are equal.
When opting for a secured credit card, numerous factors must be considered, such as the annual fee (if applicable) and its associated benefits and bonuses.4
Note: Not all secured credit cards are equal. Make sure to carefully review your options and select a card with the most competitive rates for your situation.4
Pay the Security Deposit
Paying a security deposit is something that can’t be skipped with secured credit cards, as credit card providers ask for it when you are opening an account. Therefore, you need to pay the security deposit to establish your credit limit. Without the security deposit, you will not be able to use the card.
Use it Wisely
When opening a secured credit card, you should know how to use it wisely, as its purpose is to improve your credit score, not cover everyday expenses. Therefore, consider making a small number of manageable purchases with your secured card and avoid spending beyond your means.
Upgrade to an Unsecured Credit Card
Keep your credit utilization low and pay your entire balance on time each month. If you do this consistently, your credit score will improve. Then, you will be more likely to get the upgrade you are searching for.5
Pay your Balance on Time
Paying your balance on time and in full is critical as the secured credit card interest rate remains high. You can go without late fees and interest charges that could negatively affect your credit score when you pay the entire balance for your credit on time.
Additionally, paying your balance in full shows proper credit behavior that keeps the account active. With this being said, it is highly advised you pay the entire balance on your credit card on time each month.
To make sure you never miss a due date, you can set up an automatic payment time and date or set an alarm to constantly remind you.
Monitor your Credit Score
Since having a secured credit card establishes your credit, you need to look at your credit score. Regularly checking your report allows you to monitor your improvement and spot areas for development.
If your score increases, you are moving in the right direction. If it is not moving forward, you should request a copy of your credit report. This will help you identify any problems affecting your score and address them accordingly.
When Should You Upgrade to an Unsecured Credit Card?
When you have successfully paid off your secured credit card, you may be offered a chance to obtain an unsecured credit card from the same provider. If your credit score has been boosted enough from your efforts, you can hunt for an unsecured credit card on your own. Or, just let Max Cash connect you to a new credit card offer today!2 5 Upgrading to an unsecured credit card can be a great way to increase your credit limit and access better rewards and benefits. Just make sure you review the terms and conditions carefully before making a decision.4
You can contact us at 1-833-207-9052 today or at email@example.com to learn more!