So you either have no credit or have bad credit and need to fix it fast. You have to pay off credit to build credit. So how can you improve your credit if no one will lend to you in the first place? Secured credit cards work great for this situation. I have actually used secured credit cards to fix my credit twice (yes read that correctly).
With a secured credit card, you make a deposit to the account to “secure” your line of credit. If you charge the card and do not pay the money pack, the lender will keep your deposit. This security deposit lowers the risk to the lender and allows them to issue a card with a lower credit score.
It doesn’t matter how high of a limit you start out with but it does matter how much of you limit you use. A big part of your credit score is utilization, or how much of your credit limit you use. You want to keep this number under 30%. So if you start out with just a $200 limit, that’s fine, but don’t spend more than $60. Remember, this one is not really for financial leverage, its just to build your score so that you will have more opportunity in the future. You should notice your first big boost in your score after your first on time payment is reported.
The book “I Will Teach You To Be Rich” helped me a lot when it comes to managing finances. Follow the affiliate link below to check it out for yourself.
