Not everyone has the security of a healthy bank account or an easily secured credit card, though it may seem a very commonplace accessory in one’s wallet. For some, what should be the simple task of creating a credit account is not an easy feat at all, as they can be hampered by poor credit or payment history, outstanding debt, or no credit history at all. But secured credit card options are never out of reach for anyone willing to put in some small effort, a few changes in their spending habits, and just a bit of time. You could even have a credit card within a few days of reading this paragraph!
Typically, the main problem of trying to obtain card secured credit is one’s credit history. A person’s credit history is the key factor all companies or institutions look to when deciding if a person is a credit risk. The credit report is a document displaying one’s financial history. An individual is scored on this document between good and bad history of payments, credit, loans, prior or current credit cards and the length of the credit history itself. The end tally is known as the FICO score. The higher the score the better the history, and the more likely a person will obtain a secured credit card. Because of its importance, knowing and understanding what information the credit report tells others about you is essential.
The first step in gaining secured card credit is to obtain your credit report and see where you stand. As of January 2004, all credit bureaus are required to give you one copy of your credit report for free each year. Any time you apply for credit of any kind, the lender will contact one of the three big credit bureaus to obtain a copy of your credit report. But keep in mind that the companies can charge you for doing so- always contact the company first either online or by phone and examine their policy. Doing so can save you some much needed cash.
When you have obtained your report and gone over your strengths and weaknesses and checked for mistakes (they do happen and it is important to get them corrected), figure out what you can do to better your history. This is the toughest part, because it means changing your spending habits, and even your lifestyle choices. But it is essential to maintaining a healthy financial history and securing future credit. See if you can consolidate your debts through consultation with your banking or credit institution; there are even free credit consultation firms that can assist you. Figure out a budget for yourself that only focuses on the essentials- food, transportation, clothing, etc. Figure out what is important, and what is unnecessary.
Now it is time to get your credit card. You can do it by mail, in person, over the phone, or online. Online can be fastest, and is equally safe and secure. Credit card companies can vary in their interest rates and incentives, so do your research and choose one with terms and conditions that match your requirements. Each company you apply with will run credit checks. The number of credit checks can negatively impact your history so don’t apply for too many cards at once.
Remember that these institutions want your business, and are willing to compete with each other for that business. Secured card credit is available to everyone. Take your time, don’t be intimidated, do your research and choose what is right for you.
Christopher M. Luck has an extensive background in dealing exclusively with the secured credit cards and is now offering his free professional credit card secrets to the public. If you are at all interested in Christopher's professional advice, tips, or secrets, you can visit his finance blog.