You need a good credit rating in order to obtain loans and credit, but just how do you do this if you have never had credit?
Credit Builder Credit Cards—A step to good credit score
A bad credit rating can limit the borrowing options of a person. Defaulted payments and bankruptcy orders leave a black mark against one’s name. It is essential to start improving the credit score as soon as possible.
Credit Builder Card
A damaged credit history can be repaired by some pre-paid credit cards. It is helpful in boosting a poor credit score. These cards are different from others as they have the credit builder facility.
The Credit builder cardholders pay a monthly fee to have the card which is paid for a year. Thus these cards appear as loan cards on credit records.
The benefit of these cards is that the credit reports have no entries of missed repayments. This helps in building the credit score. It is also wiser to possess 3-5 credit cards for different purposes to obtain personal credit. Credit limit can also be asked on current cards
Other Steps to boost ones credit score—
• Deleting Errors in a short time is the fastest way to correct errors on the credit report. This can be done through a bank or a mortgage company. The credit will improve to a certain extent and allow loan at lower interest.
• Playing Round Robin is one of the oldest strategies for credit building. This done by secured saving account or by secure credit cards. The new checking account is used to make payments on the new credit cards regularly on time. This way the credit score will improve because there are new perfect payment cards.
• Pay on Time will increase the credit score. Credit companies make lots of money when loans are not paid in time, but the credit goes down.
• Never close accounts because the longer an account is open with no negative reports, as it reflects a better credit score.
• No New Credit should be taken if the credit score needs to be increased. Each credit will call for an inquiry that is added in the report. This naturally drops the credit score. A fresh credit card will be helpful if credit is to be taken because there is no the new credit card.
Credit Builder Credit Cards may not always be useful for bad credit. Credit cards with high fees and credit cards that are not reported in the credit bureaus should be avoided. An independent cared used for a single payment is much more useful. Try and maintain a good credit score in all the possible ways.