Outlook Money
In order to improve the credit score, one should get a secured credit card preferably. This has the ability to build a strong credit history and facilitate credit access.
It is that type of credit card for which a cash deposit as collateral is required. The deposit acts as a credit limit and the card issuer holds it as security in case you fail to make payments.
Timely Payments:
It’s important to make payments on time. This ensures the credit score improves. Late payments not only incur fees but also harm credit scores.
Keeping credit utilisation low is essential for improving credit scores. One should aim to use less than 30 per cent of the available credit limit. High credit usage can negatively affect scores and limit the benefits of a secured card.
Many secured credit cards come with hidden fees, such as annual charges, late payment fees, or other costs. Review the card’s terms carefully to ensure you are aware of these fees and avoid any surprises that could add up over time.
Helps Build or Rebuild Credit:
By using a secured card responsibly, one can establish a credit history or improve a low credit score.
For individuals who may have difficulty in qualifying for unsecured cards, a secured card provides an opportunity to access credit.
After demonstrating responsible credit behaviour, some issuers may increase credit limits or even upgrade to an unsecured credit card.