Bad credit? Raise Your Score With A Secure Credit Card

More and more consumers are finding themselves with below average or poor credit due to the recession. Unemployment, foreclosed homes, and late payments can all damage credit. Because of this, many are trying to repair their credit; for example they may want to improve their credit so they can get pre approved and  buy a home. One way to get back on track and prove that you are worthy of credit is by way of prepaid credit/debit cards, or bank secured credit cards.

How do secured credit cards work? Among credit cards, the secured card differs in that it allows people with bad credit to obtain a credit card and gives them a chance to improve their credit over time. A secured or prepaid credit/debit card allows you to give the card issuer a deposit so that they can offer you a line of credit.

This protects the issuer in case you fall behind on your payments or even default. It protects you because if you do fall behind, your deposit can make up the balance and keep your credit on track.

How do you get started with a secured credit card? First check with your bank or credit union and see if they offer a secured card. If not, there are secured credit card offers online. When you sign up for an account you will make an initial deposit which normally equals your line of credit. Then you will get your card mailed to you and you can begin to use it like a normal credit card.

Prepaid credit/debit cards come with a lot of benefits that an unsecured card comes with, including:

A major credit card logo. Your card will have the logo of one of the major credit cards, meaning you can use it anywhere major credit cards are accepted.

Credit bureau reporting. The issuer will report your payments to the three major credit bureaus just as they would with an unsecured card.

Other benefits may include low or no annual fees, identity theft protection, fraud protection and emergency card replacement.

There are disadvantages of secured bank cards, however. Be sure you read the terms of any secured bank card before signing up.

You may have additional obligations, such as a monthly insurance premium that you are obligated for in exchange for the 0% APR on the card.

The APR may start out very low, but in six months you may find it has skyrocketed.

Because there are advantages and disadvantages to a secured credit card, you should look at all offers carefully. If you decide a prepaid credit/debit card is for you, it can be a great option for repairing your credit.

Credit Score Secrets Exposed

So Many Scores so Little Time

There are lots of different credit scores offered on the web. If you are starting a credit repair program you may want to benchmark your scores. So you are likely to go online, pick out a website and pay the price. Unfortunately, the odds are that the scores you purchase will have no resemblance to the scores a lender will use to underwrite a loan.

The Real Scores

There is only one website where you can purchase the same scores lenders use; this is MyFico.com, the website for Fair Isaac Corp the developer of the FICO scoring model. As a credit repair consultant it is a matter of daily consternation to me that the same bureaus that sell these important FICO scores directly to lenders will not sell FICO scores to consumers.

The Wrong Scores

You can purchase credit scores from Experian, Equifax, and TransUnion, but they are not FICO scores, and therefore of no real credit repair value. These credit bureau scores are of their own creation and exist solely for the purpose of cashing in on the ignorance of consumers. I cannot imagine any scenario where there would be no moral culpability on the part of the bureaus.

No Practical Application

I have heard it said that although these bureau scores are not the same as FICO scores they are a way for consumers to track changes in their reports. This is not so. The bureau scores just don’t behave the same way. In other words, changes in your credit affect your FICO scores differently that they do the bureau scores. These bureau scores have no practical application, for credit repair or otherwise.

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