Do Secured Credit Cards Report to Credit Bureaus?
One great way for consumers who have seen their borrowing histories take a bit of a hit in the last few years to rebuild their credit rating is to obtain a secured credit card. But one problem you may encounter is that not all these accounts work the same way.
Secured credit cards may all be marketed as a great way for consumers to rebuild a healthy borrowing history and gain access to credit they otherwise would not be able to receive, but some of these accounts may not be able to help them do so. That's because some secured credit card lenders do not report to the three major credit bureaus. For this reason, you should always ask your potential lender whether your borrowing activity on the card will be reported to these firms before you sign up for the account.
In addition, asking whether the card will be reported as being secured or not may also be important, as some lenders may view the presence of a secured card on your borrowing history as a negative even if you have used it well.
And of course, using a secured credit card account responsibly is key to rebuilding your credit rating when your account reports to the bureaus. There are a number of ways to do this, but chief among them may be making sure to find a card that will allow you enough credit to give you a little spending flexibility while still being low enough that you can keep your balances reasonable. The best secured credit card accounts are those that do not require an application fee on top of the amount you'll pay to establish your credit limit, as well as lower rates on any balances you may end up carrying from one month to the next.
By keeping your purchases on these cards limited, you'll be in a better position to pay down your balance at the end of each billing cycle and better avoid running into credit card debt. This can be helpful because rates on secured accounts are typically much higher than those for standard credit cards.
Of course, before applying for such a card, you should closely review all aspects of your finances, as well as a number of offers for secured credit cards, to determine which account is right for you and your current situation.