At the very least, you may raise your score enough to eventually qualify for a card that offers rewards or premium benefits.
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Some credit card companies will even upgrade you to an unsecured card and refund your deposit after six or more months of responsible use. Out of all the FICO score calculation factors, payment history and credit usage are the most important. Opening a secured credit card can help you build credit if you make payments on time each month and keep your balance low. Credit utilization ( 30% of your score).FICO credit scores², for example, are based on five factors: To answer that, it helps to know how credit scores work. So how does a secured credit card help you to build credit? It’s less common to find secured cards that reward you with miles, points, or cashback on purchases, though there are some that do. Secured credit cards can charge interest if you carry a balance from month to month, and some also charge an annual fee. Each purchase shrinks your available credit and making a payment frees up credit. Once your account is open you can make purchases with your card. You might be able to raise your limit by depositing more money with the credit card issuer. If you open a secured credit card with a $200 deposit, you’d have a $200 limit to start. Your deposit usually doubles as your credit limit. For example, you might be able to open a secured card with $50, $100, $200, or more. The minimum deposit for a secured credit card can vary by the card issuer. A secured credit card is a credit card that typically requires collateral – namely, a cash deposit – to open.
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