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Sooo, ever felt like you were sitting in the middle of the credit ocean in a tiny canoe…breathing heavily …paddling to gain control…with a credit score that was STILL sinking or barely moving anywhere?

Come on, I can’t be the only one that’s felt like this.

Ugh!!!

When your credit score is in desperate need of a lifeline, there are a number of possible culprits.

Some obvious, and some…not so easy to pinpoint.


Bad credit

If you’re behind or late on credit card or loan payments, it’s likely that you understand how that predicament can directly impact your credit profile in a very negative way.

Your payment history (whether or not you pay your debt on time) accounts for a whopping 35% of your credit score.

That’s a whole lotta influence!

The more recent the missed or late payments are, the worse the impact on your credit profile.

The more time distance you can put between that negative payment history and your current positive credit behavior…the better!

You can begin to improve your score by catching up on missed payments, not paying late, and… there’s another trick up my sleeve to help offset that negative history…that I will get to shortly.

But what about those factors that may be dragging your credit life down that aren’t quite as easy to put your finger on?

I know one- often overlooked-  credit “situation”, in particular, that can really hold you back from smooth sailing on the vast credit sea.


Little to no credit history

If you’ve ever applied for any type of credit account and got a big fat denial for a reason like “not enough credit history”, you already know what I’m talking about. Ouch!

If you have zero credit established (meaning: no credit cards or loans in your name), or your credit history is fairly new…you may run into some trouble qualifying for things we traditionally need a little credit/loan assistance from at some point – think car loan, mortgage, etcetera.

It’s a bit of a catch-22 because lenders are reluctant to extend credit to you if you don’t already have a strong credit history track record.

Say what?

Yes!

They prefer to see a long history of you using the credit given to you (by someone else) responsibly.

Sigh. So now what?

Now…DON’T worry!

What if I told you I have a tool that can help you navigate your way around all of these potential credit “best life” roadblocks?

It’s a credit hack of monumental proportions if I do say so myself!

Introducing the secured credit card

Keep reading!

 


Secured card 411

What’s a secured card?

I thought you’d never ask!

Secured cards are credit cards that you can get approved for with little to no credit history or even with poor credit history.

To do so, you use your own money to put down a cash deposit (typically $200 to $600) –  which then serves as your official credit line.

For example, if you put a $200 deposit down, you can charge up to $200.

Remember I mentioned how creditors are hesitant to lend money to individuals with limited credit history length or those who have not been totally responsible with money lent to them in the past?

Boom! Problem solved!

It’s much easier to be approved for a secured card because it’s less of a risk for the financial institution that lends it to you.

How so? Because if you don’t pay your balance as you should, the financial institution will take your remaining cash deposit to pay themselves back.

Please do NOT test this one out; just trust me that it’s true.

Once you prove you can pay on time, the deposit is eventually refunded!

Moving on…


How to “secure” one for yourself

One of the biggest challenges to finding a great secured credit card is learning how to avoid the scammy “offers” and information from not so reputable companies that specialize in taking advantage of folks that are in a bind.

Here’s what you should be looking for:

  • Reasonable start-up fees: Be cautious of companies asking for outrageous start-up or other fees (some places try to charge upwards of $200) or will ask you to call a 1-900 number that charges you money. Uh-uh! We’re not falling for that. Don’t confuse this with the deposit you’ll have to put down. That’s normal.

 

  • Credit bureau reporting capabilities: Be sure to confirm that your secured card transactions will be reported to all three major credit bureaus (Equifax, Experian, and Transunion). You want these reporting agencies to see that you’re paying off your debts in a timely and responsible manner.

 

  • A decent bank: Try to select a bank you would want to do business with for the long-term. After about 12 months of on-time payments, your ultimate goal will be to ask if you can switch to an unsecured (regular) credit card. More about that later.

Now that you know what to look for (and what to look out for)…guess what?

I have a Budgetnista-approved solution to take all the guesswork out of finding a reputable secured card with the best benefits and features!

Yay!

—-

The Creditcards.com team evaluated more than 200 secured credit cards based on criteria like rates and fees, deposit amounts, the ability to improve credit, customer service, and other miscellaneous features and benefits.

Ummm yeah…they literally did nearly all of the work for us!

I’m ok with that. 🙂

They break down the latest and greatest picks for the best-secured cards and provide lots of valuable information to help you make your decision

Find your best-secured card option HERE.


How to use it to your advantage (hack alert)

Whew!

Now that you have the right card secured (lol, get it!), here’s the hack that’s going to help take your credit score to the next level!


Charge one tiny bill each month on your card

Simplify things by making this charge a standing monthly bill (i.e. magazine subscription, Netflix, gym membership).

Don’t try to pick and choose what you are going to pay from month to month because that means you have to physically take the card out of the house or pull it out to charge something online…and that can get you into spending trouble fast…so I’ve heard. 🙂

That one standing bill should be the ONLY thing your secured card is used for.


Automate your payment

What’s the best way to ensure that you pay your secured card on time and in full each month?

You guessed it…sign up for automatic bill-pay (a free service) at your bank.

Arrange for your bank to send the full payment of your tiny bill, from your checking account to your secured card each month. Make sure to pay AFTER the statement date (the day your bill is issued), and BEFORE the due date. This is important if you want the credit bureaus to know that you used and paid off your card each month.

Automating both the monthly charge AND payment on your secured card will keep the biggest threat to success (hint: it’s you) from messing this good thing up!

 

How a Secured Card Can Save Your “Credit” Life

The big payoff

So what’s the big return on your investment for following my blueprint to the tee?

You now have the power to help your credit score jump like Jordan!

What do I mean?

Well…something awesome happens when you pay off your debt in full each month.

Your credit score begins to shoot up!

And it doesn’t matter if you pay off $5000 a month or $5 a month because it’s not the amount that boosts your score.

It’s the consistent, on-time payments that matter.

Imagine all the credit score gains you can make with twelve consecutive months of responsible secured card use!

 

Note: Applying for new credit WILL create a hard inquiry on your credit report (unless otherwise stated) that will cause your credit score to dip a few points initially. Don’t worry, you will make those up (and more) if you follow the steps outlined.

After you’ve shown your creditor how trustworthy and responsible you are with their money, it’s time for the “big ask”.

Meaning…ask your new best bank buddy for a credit line increase and a switch to their unsecured credit card option. Sometimes they will do this automatically! When a bank switches you from a secured to unsecured “regular”, credit card, you get your initial deposit back too!

 

This will begin to open up a whole new world of opportunity for you: lower interest rates, credit card reward points, and more!

See how everything works together?

Awesome, right?!

So now that I’ve shared with you the exciting “who”, “what”, “when”, “where”, and “why”, details about secured credit cards…I have a question for you?

Who are you going to share the BIG news with?

Hello!

We just tackled two major credit problems (bad credit, little to no credit) using only one small, but mighty tool!

There’s probably someone right in your immediate circle of friends and family whose credit profile needs a bit of a rescue!

 

Have them start right here to find their perfect secured card fit!

In no time, we’ll all be exchanging our canoes for speed boats -with our best credit life coming up FAST in the horizon.  Woot woot!

 

This credit hack is helping get my credit score together! Click To Tweet


 

My Lisa Rule: I have 4 sisters and Lisa is the baby (well she’s not a baby anymore). Of all of my sisters, I’m the most protective over her. Before I share any product or service with you, it must pass my Lisa Rule.

What’s the Lisa Rule? If I would not advise Lisa to use a product or service, I won’t advise you to either. YOU are my Lisas. I feel protective of you and your financial journey.

The products and services I recommend, like CreditCards.com, pass my Lisa Rule. Yes, I am an affiliate and earn a commission off of referrals, but I would not recommend a product or service that I didn’t believe was helpful and useful.