Building credit and having a solid credit card score can be the difference between getting a mortgage or any financial assistance or missing the opportunity altogether. Therefore, getting the right credit card score should be the responsibility of each credit owner.
I have encountered many individuals who ask me a simple yet essential question; Can a secured credit card boost my credit fast? The answer is a definite yes. How is this possible? The answer lies in using Secured Credit Cards to boost your credit history. Still wondering how that is possible? Consider the following points.
Avoid Free Offers
I know you might have come across numerous advertisements that encourage you to open a credit card to get a discount on your purchases. As good as it may sound, there is a high possibility that once you open these discount-oriented credit cards, you will end up canceling them once you have redeemed your offer.The cancellation process will affect your FICO score since each cancellation is recorded on your credit history report.
Pay Your Bills on Time
Your overall credit report determines your credit score. If you are good at defaulting bills, then be guaranteed that building credit will be hard, and your credit history will be adversely affected since no lender will be willing to offer you a loan if you are poor in paying back.
Keep Your Bank Accounts Open
One of the simplest ways to improve credit history is by ensuring that your bank accounts are open and active. You can achieve this by regularly using your credit card. The notion behind this argument is based on the fact that, the longer you use your credit cards, the more “attractive” you will appear to lenders. Rather than shuffling from one credit card company to another, activate one or two Secured Credit Cards and use them. Additionally, each time you open a credit card and close it, your overall credit score is affected negatively. It is also important to know that the overall length of your credit card accounts to 15% of your total FICO score. Therefore, the shorter the duration of your card, the lower your FICO.
Keep Your Balance Low
The amount you owe to a lender accounts to 30% of your overall score. Your credit utilization plays a significant role in determining your score especially if you owe money to a lender. The higher your credit utilization, the higher the chances of overextending your repayment. You can boost your credit card history by keeping your credit balance low. You should be in a position to aim at a credit score of 30% or lower at all times. You can also keep your utilization low by ensuring that you pay your loan at least twice per month instead of waiting for your bank statement to arrive at the end of the month.
Keep Track of Your Spending
A significant danger of using a credit card is the fact that your balance does not change when you happen to make a purchase. However, this changes when paying your credit card bill. If you are not careful with this sort of spending, there is a high chance that you will lose track of your spending, and in the process, hurt your credit score. You can avoid this by:
- Keeping a budget on your spending.
- Treating your credit card as a debit card.
- Spend within your means and avoid things you can’t purchase.
Check Your Credit Report
You can improve credit history and repair your poor score by keeping tabs on your credit report. If you don’t have a report, get one from your credit issuer. In most cases, your credit card report brings together the data used to calculate your score, your balance, pending payments, and defaulted payments.Errors might occur when tabulating these figures, and if you are not keen enough, you can end up paying for money that you don’t owe anyone. This can then affect your score and history. Therefore, if you are still wondering or asking yourself can a Secured Credit Cards boost my credit fast? it is my hope that this article has been able to answer your question.