Millions of consumers struggle with real life circumstances every single day. We wake up and tell ourselves that “one day” we will be in a better position to take action on our bad credit situation. We struggle with not enough credit, no credit history, collection accounts, charge off’s, repossessions and even foreclosures.

How do we bounce back after these devastating events show up on our credit report? When we apply for credit we get told, “You don’t have enough credit” or “You have a negative credit history”. The normal response is usually you need to rebuild your credit history. But, how do you rebuild your credit when no one is willing to extend you credit? Where do you turn to for help?

Now, you may hear all the time that a secured credit card is the best way to rebuild your credit. This is very true but there are some things that you need to watch out for.

1.       Does the secured credit card report to all three credit bureaus (Experian, Equifax, & Transunion)?
2.       Does the secured credit card report as a “secured credit card”?
3.       Can you increase your line of credit?
4.       Is there an option to convert a secured credit card to an unsecured credit card?

The first two questions are the most important, the last two questions are nice perks to have. When you start rebuilding your credit with a secured credit card, you need to find out if that secured credit card reports to all three credit bureaus. It is a must to report to all three credit bureaus to get the maximum benefit of the secured credit card. If the secured card only reports to one credit bureau then it may not be your best option. You want to be able to change all three credit report scores in a positive way.

Think of it like this, when you buy a house, lenders base your approval on your mid score. If your credit scores are 578, 605 and 620 your mid score would be 605. Now, if you choose a secured credit card that only reports to one of the bureaus, you’re still in the same situation as before. So, let’s say that 620 credit score jumps up to 640, a 640 credit score is perfect for FHA approval, however this only got reported to the one credit bureau, so you mid score did not change. Your mid score is still 605 so the secured credit card that you thought was going to be the difference to help you get that new loan did not benefit you at all!

If the secured credit card reports on your credit report as “secured” this doesn’t look good either. I’m not saying that it will not have a positive effect on your credit score, but, you really don’t want this. In a sense, when a lender sees only unsecured credit lines on your report, they may be influenced to think that you are not trusted with an unsecured line of credit. There are secured credit cards out there that report as unsecured, but they are very few and far between. One card that I can recommend is the Public Savings Bank secured credit card. This credit card reports as unsecured and it will also report to all three credit bureaus. This is a great way to rebuild your credit and show that you are trusted with an unsecured line of credit.

Empower – Educate – Take Action

H & I Credit Solutions

There are many consumers in the US today that struggle with the issue of having absolutely no credit. Once upon a time, I was one of them. I had no credit, no bad credit nor good credit. Over time having no credit became bad credit because my finances did not have a strong solid credit outline. To make a bad situation worse, when consumers have no credit it can be difficult to obtain credit. The good news is that there are solutions out there to help people wanting to better their future, you just have to know where to get them. The solid truth is, you need credit. Our country is based on credit and the American dream is very hard to achieve without good credit.

One solution to repair your “no credit problem” is to obtain a secured credit card that reports to all three credit bureaus. Obtaining a secured credit card can be troublesome if you don’t do the proper research, or even know what to look for in a secured credit card. The #1 rule when looking at a secured credit card is, that you want to be mindful on how that secured credit card reports to the bureaus. If the secured credit card reports as a secured credit card, the credit card will not be beneficial as far as building your credit. It is very important that you choose a secured credit card that reports as an unsecured credit card to all three credit bureaus.

Get a new & build your credit at the same time.

One solution for obtaining credit would be to open a credit line with one of the “rent to own” companies. One of the companies that come to mind is Conn’s Electronics. Conn’s is a great place for you to start building credit. Conn’s provides an easy approval process and easy payments that will build longevity in your credit file.

Add positive credit while you relax in a new leather couch.

Another solution for consumers with no credit is to apply to a furniture company that provides “in house financing” such as Ashley Furniture. An added benefit, Ashley Furniture is a great way to spruce up your house while building a solid credit history.

Empower – Educate – Take Action

H & I Credit Solutions

There are several different ways to boost your score fast. Adding positive credit is one of the most effective ways to boost your credit score. One of the most common is to speak with a family member that has a credit card with a great payment history. You will want to make sure that the account has been open for a while. The longer an account is open with positive payment history, the better!

Department stores and major credit cards will be your best bet for those accounts. You will want to ask the account holder if they can add you as an “Authorized User”. An Authorized User on an account will allow you to inherit the full account history of that account. This can be very effective when trying to boost your score only. This can have an affect of up to a 60 point increase. Keep in mind that if the original account holder is late or has a problem paying, it will have an effect on your credit report as well.

You do not have to physically hold the card as an Authorized User. The account holder can send the additional card to their house and keep it safe. You do not have to use the card at all. All you need is to borrow the account history for a short amount of time. Normally clients will use the history for about 6 months in order to get approved for a loan.

Empower – Educate – Take Action

H & I Credit Solutions