Friday, November 23, 2007

In attempt to rebuild my credit, what type of card will I most likely be approved for?

In attempt to rebuild my credit, what type of card will I most likely be approved for?
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Should I apply for a credit card through my bank or should I try to get one from a department store? I've had my bank account for about 5 years. I have had a couple of overdraft issues but have taken care of them within a matter of 2 or 3 days. No overdrafts in the last year though.I don't want to go through the trouble of applying just to get denied and have that show up on my credit report.
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The Answer : You may want to check with your bank to see if secured credit cards are offered. Secured credit cards are the easiest credit cards to get mainly becuase you have to place a deposit upfront as collateral to secure a credit line. For example you place a deposit of $300, your credit line would be $300.
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By being able to add to the deposit to increase the credit line, it gives you more control over your credit line, while also allowing you to create a savings for yourself. Since the deposit is usually tied to a savings account or a CD, the deposit would gain interest while you're building credit, so you could think of this as an investment.
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As long as you maintain a low balance by making small purchases ($20/month) that can be paid off on time every month and add to the deposit as much and as often as possible, usually after a year the card either converts to a regular card, ora better card is offered, and most importantly, the deposit is no longer needed and is given back.
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Not only will you have built your credit by custom building a high limit credit card, but saving money also in the process.Department store cards are somewhat easier to get than regular cards, but since the number of inquiries (credit apps) count 10% of your score, whether you're approved or declined, it's important to make each application count. So that's why I stress the importance of getting a secured credit card. While you would be using your own money, you would be building credit and creating a savings for yourself

1 comment:

Anonymous said...

That answers a lot of my questions thank you so much . would you provide us with more in the near future.especially about secured credit cards !!!