One of the challenges many people face when applying for credit for the first time is that lenders want to see that you have a good credit management history. The problem is this: how do you prove that you can manage credit effectively if you have never been granted credit before? Likewise, people who have had credit problems before and who have worked hard to solve past difficulties also find it difficult for them to obtain credit. Even if these past difficulties arise from events beyond the borrower’s control, such as long illness or loss of employment, past credit problems can prevent many people from obtaining credit.
In fact, even a poor credit history can have a huge impact on your financial well-being. Routine services, such as car loans or mortgages that many people take for granted, can be out of reach if your credit history is a bit unfavorable. Even if your credit rating is average, you can get additional credit, but you may be charged a higher interest rate to account for the perceived increase in risk. Over the life of a mortgage, for example, this could translate into tens of thousands of dollars in additional costs. Obviously, having a good credit history has tremendous benefits, but how do you go about fixing past credit problems when you are no longer eligible for credit? One of the most common ways is to use a secured credit card. Here’s how it works.
Secured or unsecured credit cards
Before we get into the details of how a secured credit card can help you restore your credit history, let’s start by explaining what we mean by “secured credit card”. While there are a multitude of credit cards – each offering a variety of incentives and benefits – all credit cards fall into two broad categories: secured and unsecured. Unsecured credit cards are the most common type, and this is what most people tend to think of when talking about credit cards.
An unsecured credit card is not tied to any form of security, and when you charge the credit card for the purchase of goods or services, you are actually borrowing money from the issuer of the credit card. menu. The amounts charged to the credit card must be reimbursed according to the terms agreed when you accepted the credit card.
However, a secured credit card is covered by collateral – usually in the form of a cash deposit – that you provide to the issuer of the secured credit card. If you do not make the required payments, the card issuer deducts the amount from these funds to recover its costs.
LikeTrust Guaranteed Visa Card
The LikeTrust Guaranteed Visa credit card is available with credit limits equivalent to the amount of the security deposit provided; from a minimum of $ 500 to a maximum of $ 10,000. Applicants can choose between two interest rate options: the low rate option has an interest rate of 14.9% on all outstanding balances and a monthly fee of $ 5 ($ 59 annually). The No Annual Fee Option, as the name suggests, has no annual fees, but has a higher interest rate of 19.99% on outstanding balances.
Not only can you make purchases with your guaranteed LikeTrust Visa card wherever Visa cards are accepted, but you can also access funds at over one million ATMs worldwide. Just look for the Visa or Visa Plus logo and you can withdraw money from your account quickly and easily. Note that additional fees apply for these services. Please see the LikeTrust Guaranteed Visa Card web page for full details.
Restoring Your Credit History
The LikeTrust Guaranteed Visa Credit Card is a very effective way to restore your credit history. Because it is guaranteed by a deposit, virtually all claims can be approved. Even if you are recovering from bankruptcy or a consumer proposal, you can still enjoy the convenience and benefits of a Visa credit card.
LikeTrust reports the monthly status of your account to Equalfax and Put-upUnion. Updating your credit activity with these credit reporting agencies is essential to restoring your credit. Using a guaranteed LikeTrust Visa card and paying the monthly balances in full on time will help speed up the process of restoring your credit rating.