What Are The Advantages?
Do you know 10% of your credit score is derived from the type of credit you have on your credit reports?
What does that mean exactly?
Contrary to popular belief, it does not mean that you should have an American Express, Visa, MasterCard, and Discover Card. Instead it means that you should have different types of credit lines open to improve or maximize your credit scores.
For example, an ideal mix of credit should include:
A mortgage
A car loan
A couple of major credit cards such as Visa or MasterCard
One or two department store or gas credit cards
If you don’t have a mortgage or car loan, it doesn’t mean that you need to immediately run out and buy a car just to raise your credit scores. Buying a home and buying a car are two of the largest purchases you will make and the last thing you want to do is to finance either one at a high interest rate.
So what can you do?
The key is to use a mainstream credit card issuer that reports to all three major consumer credit agencies; Equifax, Transunion, and Experian.
With a secured credit card your deposit equals your credit limit. The money you deposit is untouched and is simply a security measure in case you default.
Remember, the larger the deposit, the greater the limit which also plays a factor in establishing your creditworthiness. A $500-$1,000 credit limit is much more powerful compared to only a $300 limit.
The 3 secured credit cards listed below are each designed specifically for re-establishing credit. Even though the interest rates may be higher, since it’s for high risk individuals, not to worry because you’ll only be carrying very small amounts of revolving debt which we’ll go into greater detail in step three.
First Progress Platinum Select MasterCard® Secured Credit Card
- Monthly reporting to Equifax, Transunion & Experian
- Refundable deposit of $200-$2,000
- 24/7 online access to your account
- Get your card in as little as 5 days
- Issued by Synovus Bank
First Progress Platinum Prestige MasterCard® Secured Credit Card
- Monthly reporting to Equifax, Transunion & Experian
- Refundable deposit of $200-$2,000
- Variable APR of 11.99%
- Get your card in as little as 5 days
- Issued by Synovus Bank
The First Progress Platinum Elite MasterCard® Secured Credit Card
- Monthly reporting to Equifax, Transunion & Experian
- Refundable deposit of $200-$2,000
- Variable APR of 19.99%
- Get your card in as little as 5 days
- Issued by Synovus Bank
Don’t worry if you are unable to obtain all three secured cards today. You really only need three if you have no other active credit cards. The goal is for you to have at least three major credit cards actively reporting on your reports.
At least start with one so you can establish an active/positive trade-line. The other mix of credit such as a car loan and mortgage come later.
Remember, the types of loans and trade-lines you have only make up 10% of your score overall. The most important factor in your credit score is undeniably carrying a low balance and credit usage which we’ll cover in more detail in the next step.
USAA Secured Credit Card for members of the military and their families
Call Today for a FREE No Obligation Credit Consultation:
1-517-518-8847
Stay Tuned for Step 3!
Step 1
To your success in credit and life,
Marco Carbajo