Do secured credit cards actually raise your credit score if used correctly?

Question

Also... please share your experiences with secured credit companies.... How long did it take to raise your FICA score using your secured card?

Answer 1

Yes they do. And not only do they raise your score if you use it wisely, you'll have an excellent chance to convert it into an unsecured card and get the deposit back with some interest. I had a secured card with my bank that I put up a $1000 deposit to get a $1000 line of credit. I bought small items on it and quickly paid it in full each month. It took me about 9 months before the card became unsecured and I got my deposit back. I ended up redepositing the money back into a certificate of deposit which I used as collateral for a signature loan that I quickly paid off to boost my score even higher. My advice with a secured card is to start off small (like $200-300), charge less than $30 on it, pay it in full every month, and increase the security deposit as much as you can every couple of months if you have the extra cash to spare it will be temporarily tied up in the security deposit. The higher you can get the limit while it's secured, the better it will look when it's unsecured. Remember, if you use it wisely, you'll get the deposit back, you will have saved you quite a little nest egg emergency fund and you'll have an unsecured card to boot.