Secured loan or secured credit card for credit repair

[littlebird]

In the past 10 months, I've gotten my score up from 575 to 626 and am looking for ways to boost that number higher. I'm considering getting a secured loan for $500 from the bank and doing a fast pay back. I read somewhere though that a secured credit card works even better to boost your score. Any advice?

Thanks!

[chasmith]

Put $500 in savings to secure a 12 month installment loan - proceeds $500.00.

Put that $500.00 into savings to secure a $500.00 credit card...

You've done both with one $500.00 security investment.

[Anonymous]

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@chasmith wrote:

Put $500 in savings to secure a 12 month installment loan - proceeds $500.00.

Put that $500.00 into savings to secure a $500.00 credit card...

You've done both with one $500.00 security investment.

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Have to pick the bank or credit union wisely, though.  Alliant and, it seems, PenFed do not report their secured loans to the CRAs.  Another consideration is that once the loan is paid off you will get a reversal of your score gain from opening the loan.

Secured credit cards are good.  Try for more than $500, though, since higher limits beget higher limits when you try and leverage that secured card experience and obtain other non-secured cards.

[Anonymous]

Good morning, littlebird!

Yes, secured credit cards are a great way to boost your credit score. Just make sure that whichever card you choose reports to all three major credit bureaus. Also, be sure to pay your balances on time each month.

I've heard that Public Savings Bank's secured Visa credit card is a perfect card for rebuilding credit. I know it's built to help you either establish or re-establish your credit history. I'm pretty sure you can open up an account for $300 and up so it works perfectly for your $500.

I hope this helps