Secured Credit Card Advantages

Secured Credit Card Advantages
Secured Credit Cards have many advantages for someone who
does not have any credit, or someone with challenged
credit. It is hard to do a lot of things without credit
cards. In this article I will discuss why you need credit,
and if you don't have credit or your credit is challenged,
how secure credit cards will benefit you.

Establish good credit
One of the hardest challenges is to get a creditor to
extend credit to someone that has no credit. There was a
trick used for years, and that trick was having a family
member ad you to there credit card as an authorized user.
Recently the FICO® score model was changed because of
the fraudulent use of selling authorized user accounts by
credit repair companies. This motivated Fair Isaac to
change there FICO® score model. So if you are added to
a credit account as an authorized user, this can hurt your
credit score. This loophole has been closed. The best way
to get started in the credit building process or the credit
rebuilding process is too get a secure credit card. Secure
credit cards require a deposit into a designated account by
the credit card company. This is the quickset way to start
establishing good credit.

How much credit do you need?
Once you start building your credit, most creditors like to
see at least 3 lines of credit reporting on your credit
report for 12 months. The standard is getting 3 secure
credit cards or at least two will suffice. Once the lines
of credit have been reporting to all 3 credit bureaus for
12 months your credit score will start to appear or get
better depending on your circumstances. Remember secure
credit cards are just a way to get the ball rolling. After
you have been paying on your credit cards with no late
payments other credit card companies will start offering
you credit cards with small credit limits. Typically they
will extend around $1000 line of credit to you. With good
history they will increase that limit over time. Your
credit card balance should never be charged over 30% of
allowed credit limit. Fair Isaac talks about this in their
score model. Be careful with credit cards, they can consume
you if you are not careful. You should never charge more on
a credit card than you can pay off that month.

Payment History
If you have one late payment on your credit card, you just
defeated the entire purpose of this article and the credit
building process. One late payment will slaughter your
credit scores. Typically your credit score will drop 100 to
150 points. So if you had a 720 credit score, you now have
a 570 score. A 570 credit score will get you denied for all
types of credit. So make sure your payment history is in
good health. Never be late on anything. Make sure you get a
copy of your free credit score report to see where you
currently stand.

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About the Author: Mike Clover is the owner of
http://www.creditscorequick.com/ . CreditScoreQuick.com is
the one of the most unique on-line resources for free
credit score report, fico score, Internet identity theft
software, secure credit cards, and a BlOG with a wealth of
personal credit information. The information within this
website is written by professionals that know about credit,
and what determines ones credit worthiness.