I am applying for a secured credit card after bankruptcy (due to medical bills), Is it to my advantage to get 2 or 3 secured credit cards to build history or only use one? I dont really need or want any loans/credit cards right now and I am big on paying cash but I need to rebuild my credit rating. Will 2-3 secured cards build my credit faster then 1 secured card?
I totally understand you wanting to pay cash for everything you buy, and not wanting to have any loans or credit cards, but you’ve got to understand that credit is a game, you just have to learn how to play it.
These unsecured cards are the only thing that’s going to help you rebuild your credit. Even more, in most cases, than getting negative marks removed from your credit report.
I took my credit score from 580 to over 700 in under 6 months by doing two things, disputing negative marks on my credit report, and getting these merchandise cards.
See what you’ve got to understand is that the biggest mistake average people make with their credit, is that they pay everything off in full every month. In order for your credit score to steadily rise, you’ve got to keep a 10 to 30% debt to credit ratio on all unsecured debt, i.e. store cards, credit cards, and merchandise cards.
You determine your "high credit limit" by simply adding up the credit limits on all those cards or unsecured debt, and simply have balances that add up to 10-30% ratio of your high credit limit.
For example let’s say you have three credit cards with a $5,000 limit each, so you’d have a $15,000 high credit limit. So you’d need to have a balance from these three cards of at least $1500 to get, and keep that 10% debt to credit ratio, and of course like I mentioned you could keep a higher balance than that, as long as that ratio never exceeds 30% you will certainly see your credit score rise consistently.
Now the problem for most people with bad or problem credit is that they simply can’t get approved for regular credit cards, so they must get these merchandise cards instead. The key here is that a merchandise card and a "regular" credit card report and are considered the same on your credit report. So the credit limit on the merchandise care gets counted as part of that high credit limit we talked about earlier.
So for example: Joe wants to raise his credit score. He currently has two credit cards that have $2,000 limits on both. So currently his high credit limit is $4,000. But he has maxed out both of them. So his debt to credit ratio is 100%…not good.
So what does he do? He gets several merchandise cards. One with a limit of $10,000 and two more for $5,000 each. So now, Joe’s high credit limit has suddenly gone up to $24,000. Now considering Joe doesn’t abuse his merchandise cards and only uses $1,000 between the three of them, he now has $5,000 in debt to his available $24,000 which gives him the debt to credit ratio of about 21%. Which as we talked about, is between the 10-30% range.
Now Joe will continue to make the minimum payments on all his cards in order to show a good payment history, and this will allow his credit score to quickly and consistently rise.
This example can be done the exact same way if you’re starting with no cards or no high credit limit at all.
Also, check out the credit secrets bible at the website I’ve listed in the source section of my answer here. I don’t make any money if you buy one, or whatever, it just really helped me get ahead in the credit game, and change my life as far as credit goes. I tell all my friends and family that have credit problems about it.
Hope this helps,
Matthew