I have no credit, would it build credit faster to have a secured loan AND a secured credit card? or would just one or the other be the same? Also, anyone know any good secured credit cards?|||A secured loan is a fast way to develop credit.
It reports as an installment loan from day one.
Make the loan for at least one full year.
Why sometimes you don't hear much about this as a fast way to develop credit:
Secured loans require a minimum of $1,500 to $3,000 depending on the bank.
Most young people do not have this "extra" cash to spare
That is why you see a secured loan as a "secondary way"
A secured card is a much slower way to develop credit
It reports as a secured card for one year (at least)
Then after a year to a year and a half it reports as a credit card.
In 2009 only 10% of secured loans were turning into credit cards after a year.
Usually people with these have credit problems and cancel them.
Others, just can't use it wisely.
Wise use is just like if you had a credit card.
You charge small things each month, and pay in full "replace the money" each month.
You should never use more than 30% of your limit
Ex: $200 limit - never touch more than $60 at any time
As you see, you have to treat this card with respect and it will reward you with good credit
With a secured loan, be upfront with your bank about your plans.
You can purchase a 1 year cd, and make a loan against it.
They will usually charge you about 2% to 4% more over the cd rate
If you can do the loan, you will not need the secured card to establish credit
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