Repair Your Credit On Your Own

It's a sad reality that Americans have been facing a world wide financial recession for some time. This financial recession has forced many Americans into a financial hardship that they thought they would never have to face. However, now that these Americans have overcome the financial hardships behind them, it's time to start a new life when it comes to credit scores. Once a financial hardship ceases, it is important for consumers to start working on rebuilding their credit scores to avoid future financial hardships.

One of the best ways to start rebuilding credit credit is by using a credit card account. I'm not talking about one of the run of the mil charge cards. Sadly, consumers with bad credit cannot qualify for a standard charge card. I'm more precisely talking about secured credit card accounts. Secured credit cards are financial products that work just like any other charge card account. The only major difference between a secured charge card account and an unsecured credit card is that for secured charge cards, consumers must first place a deposit with the bank. This deposit is known as a security deposit. This security deposit then becomes the credit limit on the secured charge card. This credit limit is now secured by the security deposit.

I know what many consumers may be thinking right now. Why should Americans get charge card accounts that only allow them to borrow their own money? Well, the simple reality is, it is almost impossible to find an unsecured credit card that Americans with bad credit will qualify for. This is just too much of a risk for most banks to be willing to take. However, for rebuilding credit scores, it is imperative that Americans have a charge card account. The best way for consumers to rebuild their credit scores is to show that they are able to responsibly use a revolving credit line.

Now that you know what kind of charge card to get and why, it's time to get into the credit rebuilding part. Sadly, just having a credit card account isn't going to be enough to rebuild credit scores. It's important that people regularly and responsibly use their new secured charge card accounts to notice a growth in their credit scores. However, misuse of a charge card account can lead to more of a financial hardship so it is best to follow these simple guidelines:

Never spend more than 50% of your credit limit: The reason consumers should never spend more than 50% of the credit limit available to them is because this shows that these people may be facing hard financial times for which they need more loans. This action shows that this type of borrower will be more of a risk to the bank!

Always send payments 2 weeks in advance: I know that 2 weeks sounds like a bit of extra time to process. However, in some cases, this 2 weeks is vital. Also, the worst thing that will happen for sending a payment in early is that it is processed early helping the credit scores of the consumers who choose to make early payments.

After about a year of having the secured charge card account, the security deposits are usually returned provided that the credit card did not go into default during this time period. At this point, consumers usually notice that their credit score is 620 or above!