Getting Credit Is Just The First Step

If you’ve tried a bank, department store, or even credit card companies directly and failed, not all is lost.

Secured credit is a last resort, but it is much easier to obtain than unsecured credit. When a credit card or loan is secured, it means that there is an asset linked to the account that the lender can take if you fail to pay your bill. A example of a secured loan would be a mortgage or a auto loan. If you fail to make payments, the lender will take your house or car in order to supplement the debt.

You can establish the same thing at most banks with a secured credit card. You can pledge money you pour in an account to secure the credit card. For example, you would obtain a secured credit card with a $500 limit if you put a $500 deposit in the bank that is linked to the card. If you fail to make payments on your credit card. Then the bank takes the deposit.

Again, you want to check and be sure that this secured credit is reported to the credit bureaus. If it is then it can be a useful tool to establish that first piece of credit history. After you maintain the account in good standing for a while, you may be able to obtain a regular credit card or loan.

Establishing Credit is Only the First Step

Establishing a good credit history takes time!. There are no shortcuts when it comes to establishing a good credit history. Your credit score is based on a number of factors such as payment history, length of time you’ve had credit, and much much more. Therefore, while it is vital to initially establish credit, it is even more important to take the necessary time to do the right things to maintain good credit.