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Research: Turn Bad Credit into Good Credit - Credit-Land.com

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If you have bad credit, you may be still trying to fix it. It’s a long process fixing bad credit. The credit card companies don’t want to hear from you and you’re still fighting to pay them the money you owe them. In 2010, 11 percent of credit card accounts had been so default that they had to rendered non-collectable. This year the percentage is almost half of that, so progress is being made.

Most of that progress is being attributed to greater credit card transparency brought about by the Credit CARD Act of 2009 and lower interest rates by the Federal Reserve. In addition to those things, secured credit cards are proving really helpful in getting credit disabled cardholders back on their financial feet.

Secured credit cards allow you to build a new relationship with credit card issuers. Previously, the relationship may have been rocky, but secured credit cards allow you to build a new relationship built on trust with credit card issuers. Secure credit cards work like this: the consumer puts up a security deposit which is equal to the credit card’s spending limit. The security deposit is used as a protective measure in case the consumer happens to not pay the bill. Having a security deposit ensures the banks that you are not as high of a risk as they presume.

After the consumer pays the security deposit, then they are given a credit card which they can use like a traditional unsecured credit card. The card can be used to make purchases anywhere a normal credit card can be used. In order for things to go smoothly, all the consumer has to do is commit to on-time bill payments and their credit score will increase. Just make sure to double check that the issuer of the secured credit card reports the information to the main credit card reporting agencies, so your payment history on the card can be reflected on your credit score.

Approval for a secured credit card can take up to a month. Banks use this time period as a gage, because if you can go a month without the money that you put down as a security deposit, then you can afford to pay it back.

Secured credit cards are the way to go if you’re attempting to fix your broken credit. Changes in the industry have made secure credit more appealing to customers and they are one of the quickest ways to prove your worth to credit card issuers.

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