Almost everyone knows that a score of 620 and below means that you are in big trouble when it comes to your credit score. Regardless of whether this has occurred due to the mismanagement of funds or even a personal event of a disastrous nature, the reality of this situation is that you will have to find a way to improve your credit score.
Apart from the cash back credit cards that are available for people with bad credit, there are other offers that involve using a secured credit card as well.
So what is a secured credit card?
Most people who use credit cards (known as unsecured cards) are offered a credit line which when spent has to be paid back every month. The same applies to secured credit cards except for the fact that the bank which issues you this card will hold a deposit that is equal to the amount of the credit line that they extend you or just a part of it.
Not only is this one of the best ways by which you can build your credit score again but you can also expect higher interest rates and fees especially if you aren’t careful about which bank offers you this type of a card. The same goes for personal loans apply online as well.
You must also keep in mind that these cards should only provide you with a credit line of an amount that is not much (around $ 300 to $500) so that you can easily pay back what you’ve spent on your card as soon as possible.
Additionally, you must also remember to find out whether these cards have a interest-free grace period just in case you are late in paying the minimum payments as this will not only affect your creditworthiness but also result in high interest charges as well. Finally, when you have built your credit back to normal, remember to get your deposit back.
Posted By: Financial Resources 101