Using Credit Card Accounts To Increase FICO Ratings

Years ago, getting a loan was a very simple process. All consumers had to do was walk into the bank with a firm handshake and a smile and ask! This would be enough to qualify consumers for loans. However, these days, getting a loan requires more of a process. One of the most important factors for consumers who would like to get a loan is their credit score. Credit scores are numbers that follow Americans everywhere they go. These scores tell lenders the probability of Americans paying loans back. With that said, people with low credit scores tend to have a hard time getting a loan.

If you are one of the Quite a few people that has bad or limited/no credit, chances are, you are looking for ways to increase your credit score! Through my research, I have found that Quite a few professionals suggest a slow and steady approach. However, I believe that people can build their credit scores within 12 months. This can be done through the use of secured credit card accounts!

Secured credit card accounts are specialty credit card accounts designed for consumers with bad or limited/no credit scores. Before people can use their new secured credit card accounts, they must first place a security deposit with the lender. This security deposit will then become the credit limit extended to these people. So, essentially people who use secured credit cards borrow their own cash alleviating the lender of any risk associated with loaning cash to Americans with low credit scores.

When using secured charge cards to build credit scores, the key is for consumers to use their secured charge card account properly. If their credit card accounts are used properly, consumers will generally receive a refund of their security deposits within 12 months. Once the deposit is refunded, the charge card account will become an unsecured charge card account and people will notice higher APRs. Here are some tips to using secured credit cards properly:

Tip #1: Never pay your minimum payment: I am going to start here by saying that minimum payments are just that, they are the minimum amount of cash that lenders will accept as a payment on a loan. However, they are not the maximum amount of cash that people are allowed to pay. To display signs of financial stability and avoid a great deal of interest and finance charges, it is best for Americans to try and send at least double their charge card minimum payment!

Tip #2: Keep balances manageable: When facing the early signs of financial hardship, Many Americans spend more than 50% of the credit limit available to them. This leads to it being harder for these people to manage their charge card account accounts. To keep credit cards in good standings, it is best for consumers to keep their balances below 50% of the credit limit allowed to them!

Tip #3: Send early payments: The final tip that I can give to Americans who would like great credit scores is to send early payments. By doing so, these consumers will display yet another sign of financial stability increasing their credit scores that much more!

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Author: StevenMartinez

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