Unsecured debt such as a normal unsecured credit card is frequently reported to the credit bureaus--especially if it is to report negative information such as a late payment or other default status. Anything negative obviously hurts your credit rating, because more than 33 percent of your credit score is based on timely payment history. Therefore, what you need is significant on-time payment history reported to the credit bureaus.
[Let CardRatings.com help you find the right cash back credit card for you.]Secured credit such as a mortgage, auto loan or secured credit card reports to one or all three credit bureaus regularly--typically every month. When you consistently make on time payments, a secured credit card is the fastest way to rebuild credit. However, to get a secured credit card requires a savings deposit account to secure the card. Most banks require a balance of $250 or more, and the amount of your savings determines your credit limit. You can go to most major banks in your community, and they will probably have a secured credit card program.
When determining which program to sign up for, you might ask how often they report to the credit bureaus, and whether they report to only one or all three. You should also determine the purchase APR and not make a decision based upon a promotional APR. Also, ask if after a certain length of time your card can be automatically converted to an unsecured card freeing up your savings account.
If you simply cannot qualify for an unsecured card, this is clearly the fastest way to rebuild credit and your best option.
- I am looking for a credit card that offers cash rewards, with no annual fee. I filed for bankruptcy in 2004, but my credit scores are in the 680s.
- I have some medical bills that have been turned over to a credit collector and my credit score is 640. Am I eligible for a credit card for travel?
- I have fair credit 630-690 post deed in lieu of foreclosure. Can I transfer a balance of $16,500 with this type of credit rating?
How many secure credit cards does one need to rebuild credit following a bankruptcy dismissed a year ago and one secure credit card for a year paid on time and paid in full each month?
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