In this article I’m going to cover the simplest yet safest ways to regain your credit score after you’ve finally rid yourself of that bothersome debt.
A secured credit card is tied to a certain amount of cash collateral you put up when you sign up for it. Unlike a debit card, this deposited money is not used for purchases or to pay down your balances. You still have to make monthly payments just like any other credit card, but if you default on a secured credit card, the card issuer doesn’t have to go through the trouble of harassing you via mail and phone, they just keep your collateral. Because of the lower risk of losing money, credit card companies are much less selective when it comes to issuing secured credit cards than unsecured credit cards.
Student loans have federally protected low interest rates and deferred payments until you are out of school. At the worst, it’s a cheap loan that help builds your credit. At the best, it’s free money for your education. So if you are in school, go apply for a student loan now!
Charge cards are commonly mistaken for credit cards but they actually differ from credit cards in that you can’t carry a balance from month to month. If you buy $500 worth of groceries in March, you have to pay the $500 when the bill arrives. If you don’t, you immediately default and are charged hefty penalties. The plus side: it will build your credit over time. Oh, and since there’s no monthly balance, there’s no monthly finance charge. However, there is usually an annual fee.
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Become an Authorized User
You can be added to a trusted friend or family member’s credit card as an authorized user and get a small credit boost. But the condition is you have to be a legitimate user. You have to be able to make charges and payments on a card opened by someone else. In most cases, this means actually carrying around a credit card with your name on it but the same number as the original user’s. To do this, just call up your credit card company and say you want to be added as an authorized user and they will send you a card immediately. Because of the quick process, it’s pretty clear that the selection process is less rigorous than applying for a credit on your own.
These few examples of ways to build your credit without signing up for one of those arduous prepaid credit cards or “bad credit” credit cards with tons of fees and unforgiving interest rates should help you safely and effectively work your way towards standard credit cards and good credit.
For those of us reading this that are not rid of their debt yet, the National Debt Relief Group can help find the right solution with a free consultation. You can fill out our Short Application and one of our debt specialists will contact you within minutes, or you can call now – (888) 703-4948.
www.nationalrelief.com