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How Users Can Quickly Rebuild Their Credit Score?

Posted by creditcardsforbadcredit on September 8th, 2020

Many credit card users wonder how they can quickly rebuild their credit. Here they should not worry as even if their credit is destroyed, they can use credit cards with bad credit. For example Unsecured cards for bad credit. In this article let’s check out some methods which can help in rebuilding the credit quickly.

1.Purchase credit cards: The best way to quickly build the credit is by using credit cards. There are two types of Credit cards in the market which can help in building credit. These are best secured credit cards for bad Credit (Secured cards) and credit cards bad Credit no deposit (Unsecured cards for bad Credit)

While secured cards help slowly, Unsecured cards can rebuild credit quickly. Let’s check the working of both the cards one by one:

Secured cards: Secured cards are specially designed for people with low or bad credit. Because they cannot purchase unsecured cards due to low credit. Secured credit cards are very famous because of their security features. In secured credit cards, users have to deposit security amount equal to the credit limit of the cards. By adjusting the collateral, they can manage their Credit limit. For example, if they are depositing the security amount of 0 then they have a credit limit of 0.

The reason behind this security limit is to maintain trust. Credit scores tells us the payment history of the users, total debt and many other things. Thus, in case the credit scores are low or null then banks and companies cannot trust. That’s the reason they need to deposit security amount. In case any user defaults the credit then banks and companies can recover their money easily. After using Secured credit cards, users can upgrade to the Unsecured credit cards. In this condition, their security amount is refunded and the account is closed.

While purchasing secured credit cards, users should focus on the details of the company. They should check if banks or companies are informing the credit card bureaus about their credit usage. If the company is not informing the credit bureaus then even after timely repayments, the credit score is not improved.

Unsecured cards: There are two variants of Unsecured cards. These are Unsecured cards for bad credit and unsecured cards for good credit.

Unsecured cards for bad credit are used by users who are having bad credit score and want to rebuild credit quickly. As the name justifies, there are no security features in these cards. Users don’t have to submit the security amount or collateral. Even after bad or zero credit, they can purchase these cards.

Because the credit limit is high, users can quickly Improve the credit score. They should pay attention to usage. In the case of irresponsible usage, these credit cards can worsen the credit score.

While purchasing unsecured credit cards for bad credit, users should also pay attention to the terms and conditions. The interest rates and annual fees are high in comparison to the secured credit cards.

Unsecured cards for good credit: These are the cards generally preferred by most of the companies. Only users with good or excellent credit can use them. They offer many benefits like high cashback and other rewards. For example free air miles in case of a travel credit card.
These cards can only help if the company reports information/credit usage to the topmost credit bureaus. Thus, users should mainly focus on this.

2.Don’t keep any debt: Users can improve their profile by doing timely repayments of their loans and Credit Card bills. By diversifying the credit, they can make significant changes to the profile. In case they are having some unused credit cards then they shouldn’t close them. That’s because the information reported by the companies to the credit bureaus can help in improving credit score slowly.

3.Become an authorised user on bank accounts: This method can help in rebuilding credit score indirectly. Users can add themselves as authorised users on bank accounts of other users having excellent credit scores. This strategy mostly works in case of close relationships. For example, if any student wants to quickly Improve his credit score. In this condition, his parents can add him as the authorised user. This way he’ll get benefits of the accounts of his parents.

4.Avoid mishaps: It is seen that most of the users successfully improve their credit score. But due to irresponsible usage for a long period, their credit score is destroyed. There are a number of activities which can contribute to irresponsible credit usage. The users should avoid them. Let’s check out some activities:

Not reviewing credit reports: In case the credit is once destroyed, it may take more than six months just to collect correct information which can establish positive standings. Thus, the users should timely review their Credit reports. That’s because officials in credit bureaus are not robots. There can be some mistakes in collecting accurate data. By timely reviewing credit reports, users can eliminate those mistakes.

Don’t use more than 30% of the credit: Experts say that credit card users should not use more than 30% of the credit limit. That’s because using more than 30% can make them fall under high usage category. This can also affect the utilisation ratio. For example, if the credit limit is 00 then users should not use more than 0.

Check credit before applying for any credit card: Users should not apply for credit cards multiple times. That’s because when the applications are filed, all the details of the users are verified. Thus, too many enquiries can affect credit.

Don’t run for promotional offers: Many users purchase credit cards just because of promotional offers. For example 0% interest rate for 6 months. When the promotional offer expires, they change the credit cards. This is a bad practice as it is just discussed that multiple applications can affect the credit score.

Don’t maximize usage for rewards and cashback: Many companies offer rewards and cashback on certain milestones. For example, 5% cashback on the usage of 0 in malls and 10% in case the usage is 0. Here if the credit limit is 0 and the user uses 0 for 10% cashback then he is using more than 30% of the credit. This way he’ll get a cashback but ultimately because of high usage his credit score is affected.

Also See: Unsecured Cards, Credit Score, Credit Cards, Bad Credit, Users, Usage, Unsecured

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