Stop worrying about your low credit score and read this blog.
I have a solution to help you improve your credit score.
Learning is the first step and you being here means you want to learn something that can set you apart from other entrepreneurs and consumers. Well done!
Someone familiar with credit understands there is personal credit and business credit. But how much do you know about secured cards?
As someone wanting to take advantage of credit to scale their business, should you be using a secured card?
What makes a card a "secured" card?
A traditional credit card is classified as an "unsecured" card. An "unsecured" card is where you open a card, spend money on it and then pay it off later.
A "secured" card means there is a collateral payment you need to make before you can use the card. You need to put money on the card before you spend it; that way you can "secure" the debt. It’s basically a boundary you’re putting around your credit card so you can spend within your means. It’s safe and it can improve your credit score. Hence the name.
How is this different from a debit card?
If you've made it this far you're probably wondering why they would even make a card like this.
The short answer: it can help you build credit.
Someone with a solid credit score and a history of using credit cards wouldn't have much use for a secured card. However, if you're working with a credit score that's 650 or lower, this is a great place to start.
If you can make the minimum payments on the card - usually $200 when you get the card - you can use the card and build up your credit history. Being able to do this will show the payment history and credit responsibility banks like to see in someone they can trust with a high-utilization card.
So if you're someone with a less-than-favorable credit score, there is hope for you yet!
How do I qualify for a secured card?
Getting a secured card is much easier than getting an "unsecured" card. To get one, you need to apply through the bank and follow these steps:
Must be 18 years old.
Have a social security number, U.S. address, and U.S. bank account.
Provide the required information in the online application.
Make sure you have the minimum payment ready and your account and routing number you can get started and you'll be on your way.
The benefits of a high credit score
While most experts talk about the negative side of credit, I'm here to help you understand the perks of it.
Credit, when used responsibly, can be a great resource to help you achieve financial freedom. I personally use my lines of business credit to scale and fund my business.
A great benefit to doing this is I can use the points to travel the world and stay at exotic locations for free. Being able to do this gives you a taste of the good life but you need to have good credit to do this.
If you're an entrepreneur who wants to scale your business, look into business credit. Think of how much you can achieve with a $50,000 credit card at 0% interest.
If this seems overwhelming or you don't know where to start, join my Credit Stacking mentorship.
I've helped more than 1000 entrepreneurs fund and scale their businesses by taking advantage of business credit. You also find ways to help improve your credit score and be part of a passionate and supportive community to keep you motivated.
I look forward to meeting you!