Should You Get a Secure Credit Card to Help Increase Your Credit Scores?

Hello and welcome to Houston First Time Home Buyers Edition, formally First Home Houston (FHH), where we provide useful information to help Houston first time home buyers make the most informed decision when it comes to buying, decorating, and maintaining their first home.

If you are thinking of buying your first home and need a bit of help to increase your credit scores, a secure credit card may be the answer. This is one of the most successful ways I have helped clients to increase their credit scores when they have limited or no credit history, or low credit scores.

Applying is easy. Complete your application online and wait for a decision. This can be less than 5 minutes or a few days. Once approved, you card will be activate after your security deposit is paid. Security deposit amount will depend on the issuing bank.

Once you obtain the card, a great rule of thumb is to use no more than 30% of the card balance. For example, if the security deposit limit is $300, you should use no more than $90 at any time. Once you receive the bill, you should pay at least $70 -$80. Never pay the entire balance.

Because you are trying to build your credit, it is not advisable to pay the entire balance. Always pay more than required, leaving about $10-$20. In addition, always make sure to pay your bill on time. Missing even one payment, or paying late will do far more harm than imagine. Here a few more things to know about secure credit cards:

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• Some secured cards do not require a credit check or a minimum score to apply.

• A security deposit will be required.

• You can obtain more than one secure credit card.

• Application may be rejected if security deposit is not paid within stipulated time frame.

• The card you choose will determine if usage gets reported to all three agencies.

• Not all secure credit cards report to all three credit agencies.

• Credit limit may be no more than $300.

• Some cards may charge a fee for opening the account.

• Interest rates may be higher than average.

• Application requirements are generally basic.

• The deposit you make during the application phase, serves as your credit limit.

• Your card may be upgraded if you use it responsible.

• If you choose to cancel your card, it may take between 30-90 days to process your request and refund your unused deposit.

• Remember, approval is not guaranteed.

• Make sure you take a bit of time to read all instructions and requirements before applying.

As always, thank you so much for stopping by. Remember, if you are thinking of purchasing your first home, please contact us. We are here to help. We have been helping Houston first time home buyers since 2011 and we can help you. I hope you have an amazing day. Until next time...Diana