Best Cards for Building Good Credit Score

In order to maintain a quality lifestyle in America, you may need to make several big purchases from time to time. It may be regarding home or car, and to complete these purchases, you may also need to take loans from financial agencies.

Generally, credit is determined on the basis of your frequent credit activity. Experts say that in order to maintain good credit activity, you may first need to pay pending bills of your student loans, medical debt, utility accounts, credit card bills, and other regular bills as well. The credit score is ultimately calculated based on your FICO score.

The missed payments or late transfers may lead to a negative impact on your FICO score. It is generally calculated by tracking the amount of credit you have; how timely you make payments or the credit balance in your account. The monitoring task is done by three different credit agencies: TransUnion, Equifax and Experian. They follow different techniques for credit tracking; hence, you basically have three different FICO scores. The lenders usually check the middle score while making decisions about lending money. The bad range for the FICO score is between 300 to 500, whereas the excellent score ranges from 700 to 850.

Image Credit: https://www.robtalksmoney.com/blog/credit-score-and-debt-free-lifestyle

Below we have highlighted a few details about different credit cards that can help you to maintain great credit history:

  • Secured Vs. Unsecured Credit Cards:
    Most people believe that unsecured cards can help them to maintain credit scores but not everyone can qualify for them. In order to get these cards, there is no need to make any security deposit, and one can spend freely up to a prescribed limit. The amount can be paid back on a monthly basis including fees and interest. But in order to get them, you may need to maintain average credit. A higher score leads to a higher credit limit.
    On the other side, the secured credit cards need security cash deposits that may protect the bank from default. However, it is still important to pay the bills on time. Note that the interest rates for secured cards are usually higher than the unsecured ones.
  • Capital One Secured MasterCard:Capital One can help you get a variety of credit cards and it can be the best fir for people who have no credit or poor credit score. They do not charge any annual fees, but you may need to make a huge refundable security deposit. The credit limits are based on the credit score and history; it may usually start from $200. However, one can raise the limit by making a higher initial deposit.
  • Fingerhut Unsecured Card:
    Here is another amazing option for people with a poor credit score. It doesn’t ask you for an annual fee and the interest rate also varies as per credit score. The online application can be submitted quickly as these unsecured cards don’t demand any initial deposit.
    Other than this, you can think of Discover It Secured Credit Card, and First National Bank Platinum Edition Visa Card. They can protect you against a huge burden of the annual fee and heavy interest rates.

Sources:
https://www.doughroller.net/credit/a-rare-glimpse-inside-the-fico-credit-score-formula/
https://www.debt.com/credit-repair/how-long-does-credit-repair-take/
https://www.nerdwallet.com/article/credit-cards/secured-credit-cards-vs-unsecured-difference
https://www.nerdwallet.com/blog/credit-cards/credit-card-raise-credit-score/
https://en.wikipedia.org/wiki/Loan