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How To Use A Secured Credit Card To Repair Your Credit

How To Use A Secured Credit Card To Repair Your Credit

One way to repair your credit is to obtain a secured credit card. You may wonder how this is possible with bad credit when you will most likely be declined when filling out a credit card application. However, without a credit card, you will have a hard time proving to creditors your responsibility in making payments on time.

If you have ever had credit cards, paid a bill monthly, or obtained a loan, you have a credit rating. When you make payments to a creditor, they report these payments to credit reporting agencies that compile your credit report and track your credit history. If you miss a payment, or even worse, your debt gets sent to a collection agent, this affects your credit rating negatively and may prevent you from obtaining more lines of credit when you need them in the future.

As soon as you realize you are in this situation, it is crucial that you immediately begin to make an effort to repair your credit rating. To most people, this seems like a difficult thing to do, but doing nothing to repair your credit will only prolong the damage for up to seven years. Until your credit is better, you will find that you are barred from any type of loan or even activities that require credit, such as renting a car.

Try a secured credit card. Secure credit cards are marketed especially toward individuals with poor credit. These credit cards work when the customer applies a deposit equal to their credit limit. For example, if you make a deposit of $100, your credit limit will be $100. The credit card company then uses your deposit toward any balance on the credit card resulting from late payments.

This type of credit card is risk-free for the company that issues it because they can always deduct the balance from your deposit, so it makes sense to issue these cards to people with poor credit. One drawback to secured credit cards, however, is the annual fee that most regular credit cards don’t charge.

After you have obtained one of these secured credit cards, use it sparingly but regularly, and make sure you mail all of your payments on time. This will enable you to slowly, but surely, repair your credit. You will demonstrate to your creditors that you are trustworthy, responsible, and pay your bills on time.

Taking steps towards repairing your credit will eliminate the risk of keeping your credit rating “poor” for up to seven years. However, after seven years the black marks on your credit will finally be taken off, so waiting is always an option. If waiting

Nothing But The Real Truth About Credit Repair

Nothing But The Real Truth About Credit Repair

Accurate and timely information cannot be removed from your credit report, even if you have paid off a once delinquent debt. The fact that it is paid off is to your credit; however, the fact that the account was once delinquent is also true and can remain on your credit files from up to seven years.

Bankruptcy information can be reported for up to ten years. Information reported because of an application for a job with a salary of more than $20,000 has no time limit. Information reported because of an application for more than $50,000 worth of credit line or life insurance has no time limitation. Default information concerning a US Government insured or guaranteed loan can be reported for seven years after certain grantor actions.

Information concerning a lawsuit or a judgment against you can be reported for seven years or until the statute of limitations runs out, whichever is longer. No one can legally remove accurate and timely negative information from a credit report. The law does, however, allow consumers to request an investigation or reinvestigation of the facts and information in your credit file that you dispute as inaccurate or incomplete. There is no charge for this information.

Credit repair clinics or services can’t do anything to improve your credit report that you can’t do for yourself, at little or no cost. Avoid companies that want you to pay for credit repair services before they provide any services. It is illegal for telemarketers who offer credit repair services to request payment until six months after they have delivered the service.

The Scam

Everyday companies nationwide appeal to consumers with poor credit histories. They promise, for a fee – usually paid up-front – to clean up your credit report so you can get a car loan, a home mortgage, insurance, or even a job. The truth is, says the FTC, that they can’t deliver on their promises and claims.

According to hundreds of reports, consumers pay hundreds or thousands of dollars in up-front fees and these companies do nothing to improve your credit report, many credit repair companies simply vanish with the consumer’s money. These companies do not tell you your legal rights and what you can do yourself for free. They often recommend that you do not contact a credit bureau directly.

Or they advise you to dispute all information on your credit report or to create a new credit identity which is illegal. If you follow any illegal advice or commit fraud, you also may be subject to prosecution.