Years ago, a good firm handshake and a smile was all it took to get a good loan. However, these days, tracking systems and credit scores have come into play to show the bank the probability of a loan being paid back. Higher FICO ratings mean that lenders take less of a risk when giving a loan. Adversely, lower FICO ratings mean that lenders take more of a risk when giving a loan. Therefore, people who have low credit scores are most likely looking for a way to increase them.

Through my research, I found that a few people say slow and steady wins the race. But, what if you don’t have time for slow and steady? What about the consumers that need better FICO ratings fast? Well, I believe that I’ve found the answer you are looking for. The fastest way to build credit is through the use of secured credit card accounts. Secured credit cards are a specialty charge card type designed for those people who have bad or limited to no credit. Before using a new secured credit card account, people must first place a security deposit with the bank. This security deposit will become the Americans spending limit. So essentially, the people who use secured credit card accounts are simply borrowing their own money. This process alleviates the lender of any risk associated with loaning to consumers with less than perfect credit!

When building credit ratings, it is important that Americans remember what this is all about. Building credit ratings is the process of displaying financial stability and independence to lenders and credit reporting agencies. Therefore, when using secured credit cards to build credit, it is important that people do this. It is also important to veer away from anything that would suggest current or future hardships. Here are the tips consumers should follow when it comes to using a secured credit card account to build or improve credit ratings.

Tip #1: Never make minimum payments: When people face the early signs of financial hardship, they tend to look at their bills a little differently. Instead of paying extra to stay ahead of their debts, consumers tend to pay the minimum payment in this situation. Because building credit is all about showing signs of financial stability, minimum payments are a big no no! As a matter of fact, it is a best practice for Americans to at least double their minimum payments when using secured charge card accounts to build credit ratings.

Tip #2: Make early payments: Another early sign of financial hardship that consumers show is making payments either right on the due date give or take a few days. Once again, when building credit scores, Americans should not show any signs of financial hardship. Therefore, to display financial stability, it is a best practice for Americans to try and make payments at least 2 weeks in advance!

Tip #3: Don’t spend more than 50% of your credit limit: Finally, when people face financial hardships, they tend to spend more than 50% of their credit limit simply trying to make ends meet. To display signs of financial stability, it is a best practice for consumers to keep credit card account balances below 50% of their credit limit!

If Americans follow these tips when using secured charge card accounts, they will be able to enjoy good credit in as little as 12 months. However, not following these tips can lead to financial hardship! Please be responsible when using charge cards!

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