Can I Get a Secured Credit Card With a 500 Credit Score?

Whether you're just starting to build your credit or you have a bad credit score, such as a 500 credit score, you might be wondering whether you can get a secured credit card with a 500 credit score? We will answer this question in much detail below.

Can I Get a Secured Credit Card With a 500 Credit Score?

Yes, you may be able to get a secured credit card with a 500 credit score because card issuers know that consumers with bad credit still need a credit card, as such, they offer consumers the ability to obtain secured credit cards where the risk to the card issuer is reduced by having you place a security deposit with the card issuer.

Secured credit cards are different from regular unsecured credit cards in that to obtain a secured credit card, you must place a deposit with the card issuer. The security deposit then determines your credit limit.

For example, if you place a $700 security deposit, the card issuer will give you a credit card with a $700 credit limit. Usually, card issuers will give you back your security within 12 to 18 months if you use your secured credit card responsibly and make your payments on time.

However, if you default on making payments on your secured credit card or you want to close the account while the card has a balance on it, the card issuer will use the security deposit to pay off your outstanding balance. The remainder of the security deposit, if any, will be returned to you.

If you have a 500 credit score, getting an unsecured credit card will be very difficult because your credit score is in the bad category. Lenders will see you as extremely risky to lend money to. As such, if you have a 500 credit score, your best option is to apply for and obtain a secured credit card. By paying a deposit, you represent a lower risk to the card issuer, and so they are more likely to allow you to borrow money from them.

When it comes to building and improving your credit, a secured credit card will allow you to build your credit just as would a regular unsecured credit card. This is so because your secured account status is reported to the credit reporting bureaus, so making your payments on time will help your credit score.

Can You Improve Your 500 Credit Score With a Secured Credit Card?

Absolutely, yes. Opening a secured credit card is one of the best ways for those who do not have credit and those who have bad credit to improve their credit. This is so because a secured credit card works the same way as does a regular unsecured credit card.

So, if you open a secured credit card and you make your payments on time, this information will be reported to the credit reporting bureaus, improving your credit score.

Those with no credit will be able to improve their credit score much more quickly than someone with bad credit. This is so because a person with no credit does not have any negative information on his credit report to drag down his or her credit score.

Nevertheless, secured credit cards are a great tool for consumers who want to build their credit from scratch or improve their bad credit.

So, if you want to improve your 500 credit score and you've been denied a regular unsecured credit card, you should explore the option of applying for a secured credit card to improve your credit.

How to Get a Secured Credit Card?

To get a secured credit card, you should first find a secured credit card, such as the Bank of America Secured Visa Credit Card or the Discover It Secured Credit Card. You should then submit your credit application online or by visiting one of the card issuers branches.

When you go to the secured credit card application, you will have to provide personal information, such as your name, date of birth, social security number, employment status, and income. Additionally, you will have to provide a security deposit to obtain the card.

Providing a security deposit is done by either giving the card issuer cash if you're applying in person or by providing your checking account information if you're applying online.

If you're approved, your security deposit will be deducted from your checking account, and your secured credit card will be mailed to you.

What Are the Best Secured Credit Cards For Someone With a 500 Credit Score?

If you have a 500 credit score, here are some of the best secured credit cards that you can apply for today.

  • Bank of America Secured Visa Credit Card - The Bank of America Secured Visa Credit Card is a great option for someone who wants a simple and straightforward credit card. This card comes with a $0 annual fee and you can deposit a security deposit of up to $4,900 for a $4,900 credit limit. The minimum deposit amount is $300 for a $300 credit limit. Also, the card comes with the ability to make contactless payments by tapping your credit card to pay. Unfortunately, this card does not come with any rewards, making it great for someone who wants a straightforward secured credit card with no annual fee.
  • Discover It Secured Credit Card - The Discover It Secured Credit Card is a great secured credit card that comes with a $0 annual fee. The great thing about this credit card is that it's one of the few secured cards that offer rewards. You can earn 1% cashback on all purchases, and 2% cashback on restaurant and gas station purchases. If you're approved for this credit card, you will be granted access to check your credit score for free.
  • Capital One Secured Mastercard Credit Card - The Capital One Secured Credit is a great option for someone who wants a simple credit card with a $0 annual fee. This card does not offer rewards but can be had for as little as a $49 security deposit that will unlock a $200 credit limit. You can increase your security deposit for a higher credit limit. The page for this credit card also states that every 6 months your account will be reviewed by Capital One. If you've used your card responsibly and you've made your payments on time, Capital One will consider raising your credit limit without you having to increase your security deposit.
  • First Progress Secured Credit Card - The First Progress Secured Credit Card comes with a $49 annual fee, however, the card more than makes up for it with an ultra low-interest rate of 9.99%. The other secured credit cards that we have included all come with a high-interest rate that ranges from 22.99% to 24.99%. So, if you're looking for a card with a low-interest rate, this card is the right one for you. The great thing about this card is that no minimum credit score is required, so whether you're just starting to build credit or you want to improve your bad credit, this is the right card for you.

How To Improve Your 500 Credit Score?

If you aren't approved for a regular unsecured credit card because you have a 500 credit score, there are a number of things that you can do to improve your 500 credit score.

Payments

The best thing that you can do to improve your 500 credit score is to make all of your credit card and loan payments on time. This is so because your payment history makes up 25% of your credit score. So, making your payments on time should boost your credit score.

Credit Utilization

The second best thing you can do to improve your credit score is to reduce the balances on your accounts. This is so because 20% of your credit score depends on the amount of your avaialble credit that you're using. The higher your balances, the lower your credit score will be. As a rule of thumb, you should strive to keep your credit utilization between 5% and 10% and to never use more than 30% of your available credit. Reducing your account balances may boost your credit score.

Reduce Applications

To improve your 500 credit score, you should refrain from submitting too many credit card and loan applications within a short period of time. This is so because every time you apply for a credit card or a loan, a hard inquiry is placed on your credit report. Although a single hard inquiry will only lower your credit score by 5 to 10 points, racking up too many hard inquiries can significantly reduce your credit score. So, to improve your credit, avoid applying for unnecessary credit cards and loans.

Keep Old Accounts Open

To improve your 500 credit score, you should keep your old accounts open. This is so because your overall average account age affects your credit score. The older your accounts, the better your credit score will be. So, although it may be tempting to close an old account or credit card, you should keep it open to improve your credit.

Check Your Credit Report

If you're not already in the habit of checking your credit report, you should periodically check your credit report. You can do this by signing up for any of the free credit report services currently available. Review your credit report and dispute any inaccurate items that appear on your credit report to improve your credit score.

Credit Score Planet Frequently Asked Questions (FAQs)

1. What is the Difference Between a Secured vs Unsecured Credit Card?

The only difference between a secured vs unsecured credit card is that a secured credit card requires you to place a security deposit with the card issuer before your credit card account is opened for you. Other than that, a secured credit card functions the same exact way as does a regular credit card

2. Can I get a regular credit card with a 500 credit score?

You may be able to get a regular credit card with a 500 credit score, however, it will be very difficult to get approved with such a low credit score. A 500 credit score is considered as very poor, so most card issuer will probably deny you if you apply for one.

3. How fast can you build credit with a secured credit card?

If you're just starting to build your credit, you can build credit with a secured credit card in as little as 6 months, however, if you're fixing your bad credit, it may take longer to improve your credit score. Some consumers have reported being able to improve their bad credit within as little as 12 to 18 months after opening and making timely payments on their secured credit card.

4. What is the minimum credit score for a secured credit card?

There is no set minimum credit score for a secured credit card. Card issuers offering secured cards know that consumers who apply for these cards are either starting off or have bad credit. As such, so long as you have the money for the security deposit, you should be approved for a secured credit card.


How Do Title Loans Work?

Being strapped for cash is not the best feeling in the world. If you've ever seen those cheesy commercials on TV advertising title loans, you might be wondering what a title loan is and how does a title loan work? We will explain what they are and how they work in much detail below.

How Do Title Loans Work?

Title loans, commonly known as car title loans work in that a car owner who needs cash deposits his car title and keys with a lender in exchange for a short term loan. If the borrower pays back the money he owes the lender, the title to his car is returned to him, but if he fails to pay back the loan, the lender will repossess the vehicle and sell it to recoup the amount you borrowed from them.

Although you may be tempted to borrow money using a title loan, you should avoid them at all costs. Title loans are extremely expensive and failing to pay them off in time could cost you your vehicle.

Title loans are attractive to people with bad credit because car title loan lenders often do not check a borrower's credit since the loan is secured by the title of their car or motorcycle. The more valuable your car, the more you will be able to borrow.

Due to how aggressive title loan lenders are, many states such as California, Arizona, Florida, Illinois, and many more have outlawed the practice.

How Can You Get a Car Title Loan?

Although we advise against getting a car title loan, you can get a car title loan by applying online or visiting a title loan store and filling out the application in person. When you fill out the application, you will typically be asked to provide basic information, such as your name, date of birth, employment status, income, and vehicle information.

If approved, you will be able to get a loan up to 50% of the value of your car. For example, if your car is worth $10,000, you may be able to get a loan up to $5,000 without having to undergo a credit check.

Most title loan lenders will only lend you money if you have the title of your vehicle. If you're approved, you will need to deposit the title with the title loan lender, as well as an extra set of keys to the car.

Once you've deposited your keys and car title with the car title lender, you will be given the amount you're seeking to borrow.

If you pay off the car title loan, your vehicle's title and keys will be returned to you. That said, you can continue to drive your car normally while you pay off the loan.

If you do not pay off the loan, the lender will proceed to repossessing your vehicle and selling it to recover the amount of money that you failed to pay back.

If your vehicle is repossessed, some states require that the car title loan lender use the proceeds of the sale of your vehicle to pay themselves back and return the remaining amount to you. That said, some states do not have this requirement and allow the car title loan lender to keep the entire amount.

How Much Do Title Loans Cost?

Although title loans may seem like a great option for those who have bad credit and want to borrow money, title loans are very expensive, so you should be cautious before applying for one. Title loans usually charge an interest rate of 25% per month. So, if you were to borrow $1,000 for 30 days, you would need to pay $250 in interest just to borrow $1000 for 30 days.

In addition to interest, title loan lenders will charge you a finance charge, as well as a title certification fee. Finance charges usually amount to $150 and title certification costs approximately $30. So, to borrow $1,000 for 30 days, you're looking at approximately $430, which makes title loans extremely expensive. You should approach using title loans with extreme caution. This is so because if you fail to pay back the money that you borrowed, you will lose your car, which for some is one of their most valuable possessions.

Do Title Loans Hurt Your Credit?

No, a title loan is unlikely to hurt your credit because title loans are not reported to the credit reporting bureaus, as such, they have no impact on your credit score. Even applying for a title loan is unlikely to hurt your credit because credit checks are not required to qualify for a title loan. This is so because title loans are secured with the title to your vehicle. If you default, a title loan lender will repossess your car to recoup the unpaid debt you owe to them.

In the event that your title loan lender checks your credit before lending you money, a hard inquiry will only lower your credit score by 5 to 10 points. That said, your payment history is not reported to the credit reporting. So, whether you make payments or miss them, they will not affect your credit score.

Defaulting on a title loan is unlikely going to affect your credit. This is so because if you default on the loan, the title loan lender will repossess your vehicle to recoup the outstanding amount that you owe them, so it's not necessary for a title loan lender to sell the debt to a collection agency, which can cause damage to your credit by adding a collection account to your credit report.

Alternatives to Using Title Loans

If you need access to cash, here are some alternatives to using car title loans:

Personal Loan - If you have good credit, you're better off applying for a personal loan because personal loans are less expensive since they have lower interest rates and fees associated with them. If you have bad credit, you may qualify for a personal loan with lenders that cater to people with bad credit. That said, be ready to pay more in interest than someone with a good credit score.

Cash Advance - If you have a credit card that allows you to take out cash, you are better off using it to get quick cash than you are by using a title loan. That said, using a credit card for a cash advance is expensive but is still cheaper than using a title loan. That said, if you default on making payments on your credit card, you will not lose your car because credit cards are a form of unsecured debt.

Family & Friends - If you need quick cash and you have a close family member or friend, you may want to ask them to lend you the money. This way, you can avoid paying interest all together. This is a significantly better way to borrow money than using a title loan where there is a big chance that you will lose your vehicle if you do not make timely payments on the loan.

Are Car Title Loans Worth It?

If you need cash quickly and you've exhausted all other options, a car title loan will be worth it if you need quick cash and are willing to risk your vehicle. Title loans are extremely expensive, often costing more than 40% of the amount you intend to borrow. For example, if you need to borrow $1,000, you could be looking at approximately $400 in fees, making you responsible for repaying $1,400 to borrow $1,000 for 30 days. So, if you value your vehicle, you should approach them with extreme caution.

Do Title Loans Appear On Your Credit Report?

No, most title loans will not appear on your credit reporting because they're usually not reported to the credit reporting bureaus. As such, whether you make payments or fail to make them, your credit will not be affected. However, if you default on a title loan, you could lose your vehicle.

What Happens If You Do Not Pay Back a Title Loan?

If you do not pay back a title loan, the title loan lender will repossess your vehicle and sell it to recoup the amount you borrow but failed to pay back.

Is It Hard to Get a Title Loan?

If you have the title to your vehicle, you will likely be able to qualify for a loan that's worth 25% to 50% of the cost of your vehicle. That said, you should keep in mind that if you default on a title loan, your car will be repossessed and sold to satisfy the debt that you owe the lender.

How Much Money Can You Get From a Title Loan?

You will usually be able to get 25% to 50% of the value of your car by obtaining a car title loan.

Bottom Line

Title loans, commonly known as car title loans, allow a person to borrow money by depositing the title to their vehicle and a set of keys with a title loan lender in exchange for a short term loan. If the borrower pays back the money he has borrowed, his title and keys will be returned to him. However, if the person fails to pay back the money, the lender will repossess the borrower's vehicle and sell it to satisfy the unpaid debt. If you have any general questions or comments, please feel free to leave them in the comments section below.


Does Financing a Phone Build Credit?

Smartphone prices around the world are always increasing, making purchasing a cell phone in cash difficult. so, if you're like many people in the United States, you've probably considered financing a phone. We often get asked: Does financing a phone build credit? We will answer this question in much detail below.

Does Financing a Phone Build Credit?

In most cases, financing a phone through a wireless carrier will not help you build credit. When you finance a phone, your account status is not reported to the credit reporting bureaus. Therefore, whether you make your payments on time or don't make them at all, they will not be reported to the credit reporting bureaus and will therefore not affect your credit.

That said, with some phone makers, such as Samsung and Apple, financing a phone with them directly may help you build credit, so if you make your payments on time, you will build good credit.

This is so because when you finance a phone through Apple or Samsung, they are essentially opening a line of credit for you, which is usually reported to the credit reporting bureaus as would a credit card. In such a situation, making payments to finance a smartphone will help you build credit so long as you make your payments on time.

Financing a Smartphone With a Wireless Carrier

When you purchase a cellphone or smartphone and agree to a payment plan with a wireless carrier, such as AT&T, T-Mobile, Sprint, or Verizon, your phone payments will not help you build credit because phone payments and bills are not reported to the credit reporting bureaus, so if you think that making phone payments will help your credit, you're mistaken as they will not help your credit. The same applies if you miss payments. If you miss payments, the missed payments will not affect your credit as your account is not reported to the credit reporting bureaus.

Financing a Smartphone With Apple

If you want to finance an iPhone or any apple product with Apple, Apple will open a credit card through which you can finance your phone. The Apple Card is reported to the credit reporting bureaus. So, making payments on an iPhone will help you build credit. If you miss any payments, you could cause significant damage to your credit. This is so because the status of your Apple Card is reported to the three major credit reporting bureaus. As such, your payment history will affect your credit score.

Does Financing a Phone Affect Your Credit?

When you first open a wireless account or apply to lease or finance a smartphone, the wireless carrier may conduct a credit check. That said, wireless carriers often conduct what is known as a soft pull or soft inquiry to review your credit when determining whether to allow you to finance or lease a phone. A soft inquiry does not affect your credit score, as such, it will not lower your credit score.

That said, if you're financing a phone directly with Apple or Samsung, a hard inquiry may be placed on your credit report. This is so because Apple and Samsung open a line of credit for you to allow you to finance one of their smartphones. A line of credit almost always results in a hard inquiry on your credit report.

A single hard inquiry could lower your credit score by a few points, but the impact is negligible and shouldn't keep you up at night.

Also, if you finance a smartphone through Apple or Samsung, missing a payment could hurt your credit score because the status of your line of credit account is reported to the credit reporting bureaus. As such, if you make payments, you will build credit, and if you miss payments, you will damage your credit.

Does Paying Your Phone Bill Build Credit

Now that you know that leasing or financing a phone with a wireless carrier does not build credit nor does it affect your credit, does paying your phone bill build credit? No, paying a phone bill will not help you build credit. That said, Experian has launched a service known as Experian Boost that allows you to improve your credit score whenever you pay your phone bill. However, a phone bill will not affect your credit unless you subscribe to Experian's service. Also, paying or failing to pay a phone bill will not affect your credit score with Transunion and/or Equifax.

Other Ways to Build Credit

If you're just starting to build your credit or you have bad credit, one of the best ways to build credit is to obtain a secured credit card. A secured credit card works the same way as does a regular credit card, the only difference between the two is that with a secured credit card, you will have to place a security deposit with the card issuer.

If you use the secured card as agreed, the security deposit will usually be returned to you within 12 to 18 months. However, if you stop making your payments on time, the security deposit will be used to satisfy your outstanding balance.

That said, if used properly, a secured credit card will help build your credit just as would a regular unsecured credit card.

So, if you want to build credit without financing a phone to build credit, a secured credit card is a great way to do so.

Credit Score Planet Frequently Asked Questions

1. Will financing a smartphone help my credit?

Financing a smartphone or any phone through a wireless carrier will not help your credit because your account status is not reported to the credit reporting bureaus. However, if you finance a smartphone through Samsung or Apple, making payments on your phone could help your credit because they typically open a line of credit on which you make payments.

2. Does paying a phone bill help your credit?

No, paying a phone bill will not help your credit. However, if you signup for Experian Boost, paying your phone bill could help your credit. That said, generally speaking, paying a phone bill will not help your credit.

3. How can I improve my credit score?

You can improve your credit score by making payments on your loans and credit cards on time, reducing the balances on your accounts, keeping old accounts open, and refraining from submitting too many credit applications within a short period of time.

4. Can a phone company ruin your credit?

Yes, a phone company or wireless can ruin your credit. The way this typically happens is that if you leave an unpaid balance on your account for too long, the phone company may sell the unpaid debt to a collection agency. The collection agency will then add a collection account to your credit report while attempting to recover the debt. A single collection that's added to your credit report can cause significant damage to your credit.


Will Disputing Items On Credit Report Hurt My Credit Score?

If you're like many Americans and you have uncovered an error on your credit report, you may be thinking about disputing the error to have it removed from your credit report. So, does disputing an inaccurate item on your credit report hurt your credit score? We will explain this in much detail below.

Will Disputing Items On Credit Report Hurt My Credit Score?

No, disputing any inaccurate or incorrect items on your credit report will not hurt your credit score even if the dispute is unsuccessful. That said, if the negative item that you're disputing on your credit report is removed, the removal will raise your credit score. So, if you find an inaccurate item on your credit report, you should not hesitate to dispute it.

For example, if you disputed a collection account that does not belong to you and the dispute results in the removal of the collection account, you will see a significant boost in your credit score, especially if you had a high credit score, to begin with.

However, if the item you disputed is not removed from your credit report, you will see no change in your credit score as it will remain the same.

The same applies if you are able to successfully remove a late payment, charge off, an account settled for less than the full balance and any other derogatory mark that may appear on your credit report.

That said, removal of or correction of inaccurate information, such as the misspelling of your name or an incorrect address with neither hurt nor help your credit score because it's not the type of information that's factored into your credit score.

In most situations, a dispute will take 30 days to complete a dispute from the date that you filed it. Once your dispute is processed and the investigation is completed, the credit reporting bureau with witch you filed your dispute will inform you about the status of the dispute.

So, now that you know that disputing an item on your credit report will not hurt your credit score, how long does a negative item stay on your credit report.

How Long Does a Negative Item Stay On Your Credit Report?

A negative mark, such as a late payment, foreclosure, or repossession will stay on your credit report for 7 years from the date that you first became delinquent on making payments on your account. For example, if you failed to pay a credit card bill that was due on January 1st, 2022, a late payment notice will remain on your credit report until January 1st, 2029.

After 7 years, the mark will be automatically removed from your credit report. If for any reason, the negative mark is not removed after 7 years of appearing on your credit report, you should file a dispute with the credit reporting bureau reporting the negative information and asking them to remove it. After you've made the request, the credit reporting bureau will conduct an investigation, and if they find that the derogatory mark has expired, they will remove it from your credit report.

The best thing to ensure that a derogatory mark is not added to your credit report is to always make your credit, loan, and other bill payments on time. This ensures that you do not owe anyone money and that your credit report remains free of derogatory marks.

How to Dispute an Item on Your Credit Report?

Before disputing an item on your credit report, you need to pull all three of your credit report. You should then examine your credit reports to find any incorrect or derogatory information.

If you find negative information that is incorrect or does not belong to you, you should dispute it with the credit reporting bureau reporting the inaccurate information.

For example, if you review your Transunion credit report and you find a collection account that does not belong to you or a late payment where you were not late, you should file a dispute with Transunion.

Each of the three major credit reporting bureaus (Transunion, Equifax, and Experian) offer consumers the ability to file dispute for free online.

Just follow the instructions that they've provided to submit your dispute.

After submitting a dispute, the credit reporting bureaus have 30 days to conduct an investigation to verify the accuracy of the information you've disputed.

If the credit reporting bureaus conclude that your claim is correct and the information that's being reported is incorrect or does not belong to you, they will remove it from your credit report.

How Will the Results of Your Dispute Affect Your Credit Score?

If you have disputed a derogatory mark (negative item), such as a late payment, or collection that does not belong to you, the removal of such an item will likely result in a significant boost to your credit score, so long as no other negative information is dragging down your credit score.

However, if your dispute is not successful and the credit reporting bureau decides not to remove the derogatory information because they've concluded that it's valid, there will be no impact on your credit score, meaning your credit score will not go down merely because you filed a dispute and were unsuccessful in removing the negative item from your credit report.

So, if you believe that there is inaccurate or negative information on your credit report, you will not lose anything from filing a dispute in an attempt to have it removed.

Items That Are Usually Disputed On a Person's Credit Report

Here are some of the most commonly found errors that you can dispute on your credit report:

  • Your closed account still being reported as open
  • An account that does not belong to you being reported on your credit report
  • An account that appear as being paid late when you've paid on time
  • A collection account that does not belong to you appearing on your credit report
  • Incorrect information, such as the wrong name, address, or phone number on your credit report
  • The same account being listed twice on your credit report
  • Incorrect installment account or credit card balance being reported
  • Incorrect credit limit being reported
  • An account that appears on your credit report due to fraud committed by another

Will Disputing an Item on My Credit Report Work?

Disputing a valid item on your credit report is unlikely to remove it from your credit report. This is so because when you file a dispute, the credit reporting with which you filed a dispute will conduct an investigation to determine whether the item you've disputed is valid or invalid. If the investigators find that the information contains inaccurate or incorrect information, the item you've disputed will be removed from your credit report. However, if the investigation reveals that the item is indeed valid, it will remain on your credit report. Disputing an item on your credit report will not hurt your credit score. However, if you're successful in disputing negative information, you could see a boost in your credit score.

Are You Required To Dispute an Item With All Three Credit Reporting Bureaus?

You will only need to file a dispute with the credit reporting bureau reporting the negative information. For example, if a negative item that does not belong to you appears on your Transunion Credit Report, you will only need to file a dispute with Transunion. However, if an item, for example, appears on your Transunion and Experian Credit Reports, you will need to file a dispute with both credit reporting bureaus.


What Credit Score Is Needed For a Home Depot Credit Card?

Whether you're doing your own home improvements or you're a contractor who makes frequent visits to the Home Depot Store, you will benefit greatly from opening a home depot credit card. That said, we often get asked what credit score is needed for a Home Depot Credit Card? We will answer this question in much detail below.

What Credit Score Is Needed For a Home Depot Credit Card?

Consumers have reported that a credit score of 640 or higher is needed for you to get a Home Depot Credit Card. That said, some users have reported that they were approved for a Home Depot Credit Card with a 600 credit score. If you're unsure about whether you will be approved for a Home Depot Credit Card, Home Depot's website gives you the ability to check whether you're pre-approved for their credit card prior to applying.

If you're pre-approved before applying, you will likely be approved if you apply for the credit card. Checking to see whether you're preapproved for the Home Depot Store Credit Card does not affect your credit score because a soft inquiry is placed on your credit report. Soft inquiries do not hurt your credit.

That said, if you choose to apply for the Home Depot Credit Card, a hard inquiry will be placed on your credit report. A single hard inquiry can lower your credit score by 5 to 10 points, however, this impact is negligible and your credit score will likely quickly recover from the point drop.

Does Checking Whether You're Pre-approved for the Home Depot Credit Card Affect Your Credit Score?

No, checking to see whether you're pre-approved for the Home Depot Credit Card does not affect your credit score because a hard inquiry is not added to your credit report. When you check to see whether you're pre-approved for a home depot credit card, a soft pull is made to review your credit report. Soft pulls, commonly known as soft inquiries, have no impact on your credit.

Does Applying for the Home Depot Credit Card Affect Your Credit Score?

Yes, applying for a Home Depot Credit Card can lower your credit score by a few points because a hard inquiry is added to your credit report when Home Depot's partner Citi Banks reviews a copy of your credit report to make a decision on your credit application. If you've ever applied for a Home Depot Credit Card, you've probably noticed a hard inquiry labeled as "Home Depot CBNA" appear on your credit report. This is totally normal because Home Depot has partnered with Citi Bank to provide you with the Home Depot Credit Card.

That said, you should not worry too much about a hard inquiry as it may lower your credit score by a few points, and your credit score will recover fairly quickly after just a few months of responsibly using your credit card and paying it off on time.

Benefits of the Home Depot Credit Card

If you're thinking about applying for the Home Depot Credit Card, here are some of the benefits of this credit card:

  • You can finance a purchase of $299 or more for 6 months
  • You can finance promotion item purchases for up to 24 months
  • You will be given 1 year to make returns on any item purchase from Home Depot
  • If someone makes an unauthorized charge using your Home Depot Credit Card, you're not liable for such charges
  • $0 annual fee for the Home Depot Credit Card

Bottom Line

For you to qualify for the Home Depot Credit Card, you must have a fair credit score. Many consumers have reported that the Home Depot Credit Card requires applicants to have a minimum credit score of 640. That said, there are some reports of consumers with a 600 credit score being able to qualify for this credit card. If you're unsure as to whether you'll qualify for a Home Depot Credit Card, you can check whether you'll be approved prior to applying for the credit card by heading over to the Home Depot Website. If you have any general questions or comments, please feel free to leave them in the comments section below.


Does Paypal Credit Affect Your Credit Score?

If you've ever logged into PayPal and saw the term "PayPal credit" or were shopping and saw that you can purchase an item using PayPal credit, you may be wondering whether PayPal credit affects your credit score? We will answer this question in much detail below.

Does Paypal Credit Affect Your Credit Score?

Yes, PayPal credit does affect your credit score because when you apply for PayPal Credit, you're essentially applying for a line of credit, and Paypal's partner Comenity Capital Bank will conduct a review of your credit report. Since the partner conducts a review of your credit report, a hard inquiry will appear on your credit report, slightly lowering your credit score.

The hard inquiry that's added to your credit report as a result of a credit check will remain on your credit report for 2 years from the date that Comenity Capital checks your credit report. After 2 years, the hard inquiry will automatically be removed from your credit report.

Experts agree that hard inquiries will only affect your credit score for 12 months, after which their effect will begin to decrease until they're ultimately removed from your credit report.

That said, even though applying for PayPal Credit will result in a hard inquiry, the status of the your account is not reported to the credit reporting bureaus, so whether you make payments or fail to make them, such activity will not affect your credit because it's not reported to the credit reporting bureaus.

Why Do Consumers Use Paypal Credit?

Many people choose to use Paypal Credit because it allows them to finance their purchases, as well as make payments after 6 months of making the purchase without paying any interest. Paypal credit is available at any merchant that offers you the ability to pay with PayPal. Paypal promotes this service by advertising that you can be approved for Paypal credit in seconds.

That said, before you apply for PayPal Credit, you should know that by simply applying, you're authorizing Paypal and its partner to access your credit report, which will result in a hard inquiry being added to your credit report because you're essentially opening a line of credit to finance your purchase.

That said, the benefit for using PayPal Credit is that you get 6 months to pay off your purchase without paying a single dollar in interest. So, it might be worth it for some consumers to use PayPal Credit, but keep in mind that a hard inquiry will be placed on your credit report.

Although a single hard inquiry will not hurt your credit score by much, if you submit too many credit applications within a short period of time, you could significantly lower your credit score. As a rule of thumb, you should leave approximately 6 months between each hard inquiry that's added to your credit report.

How Does The No Interest For 6 Months Offer Work?

According to PayPal's website, if you make a purchase of $99 or more, you will not be charged any interest on the transaction so long as you pay the balance within 6 months of making the purchase. However, if you do not pay the balance within 6 months, you will be charged interest from the date of the purchase. So, if you do choose to use PayPal credit and you want to take advantage of the no-interest offer, you should pay off your purchase within 6 months of making it, otherwise, you will be charged interest.

How Can You Apply For PayPal Credit?

If you're interested in PayPal Credit, you can apply for it directly on the PayPal website or through an online merchant where you shop. For example, if you're shopping at an online merchant, you will be given the option to pay using PayPal credit when you select PayPal as your payment method. Once you click on PayPal credit, you will have to add some information and submit your application. Your application will take a few seconds to process, and you will either be approved or denied for PayPal credit. If approved, a line of credit will be opened for you, and you can then use that line of credit to make purchases through PayPal.

Bottom Line

At this point, you may know that applying for PayPal credit can affect your credit score because of the hard pull of your credit. However, hard pulls, commonly known as hard inquiries, will only lower your credit score by a few points. If you have too many hard inquiries on your credit report, you should try to minimize the amount of new credit applications that submit, however, if you have little to no inquiries, you shouldn't worry too much about adding a single inquiry to your credit report to apply for PayPal Credit.


Can I Get a Credit Card With a 500 Credit Score?

If you're just starting to build your credit or you have poor credit, you still need a credit card. Almost all shopping and bill payments are done online. So, can you get a credit card with a 500 credit score? We will discuss the answer to this question in much detail below.

Can I Get a Credit Card With a 500 Credit Score?

With a 500 credit score, it will be very difficult to get a regular credit card because a 500 credit score is considered to be poor, and most major card issuers will likely deny your credit card application as they require a fair or good credit score. That said, although you may not be able to qualify for a regular unsecured credit card, you may be able to qualify for a secured credit card.

A secured credit card works exactly the same exact way as a regular credit card, however, to get a secured credit card, you must place a security deposit with the card issuer. The security deposit you place will usually determine your credit limit.

For example, if you want a secured credit card with a $500 limit, the card issuer will require that you place a $500 security deposit at the time you apply for the credit card.

If your application for a secured credit card is approved, the card issuer will deduct the security deposit from the account you added to your credit card application. The card issuer will then keep the security deposit and only use it if you fail to pay the credit card.

However, if you make all of your payments on time, card issuers will usually return the security deposit to you within 12 to 18 months of opening your secured credit card. Also, if you have an excellent payment history, the card issuer may convert your secured credit card into a non-secured regular credit card and return your security deposit to you.

Also, if for any reason you decide to close your secured credit card, your security deposit will be returned to you so long as your credit card has a $0 balance at the time of account closure.

Credit Cards You Can Get With a 500 Credit Score

As previously mentioned, it will be extremely difficult to qualify for a regular credit card with a 500 credit score, so here is a list of secured credit cards that are suitable for someone with a 500 credit score:

  • Bank of America Secured Credit Card
  • Capital One Secured Mastercard
  • Discover it Secured Credit Card
  • OpenSky Secured Visa Credit Card
  • First Progress Secured Credit Card

How Getting a Secured Credit Card Can Help You Improve Your 500 Credit Score

Getting a secured credit card will definitely help you improve your 500 credit score because secured credit cards function the same way as does a regular credit card. As such, they can help you improve your credit whether you're just starting off or you need to repair your credit.

That said, if you're using a secured credit card you will be able to improve your 500 credit score much quicker than would a person who has bad credit and wants to improve it.

That said, regardless of whether you're repairing your credit or building it from scratch, you can use a secured credit card to build your credit just as you would with a regular credit card.

So, if you're approved for a secured credit card, make sure to spend only as much as you can afford to pay off at the end of the month and make all of your payment in full and on time.

If you're just starting off, you should see a significant improvement within the first six months, however, if you're repairing your credit, it will take you a little longer and you should expect an improvement within 12 to 18 months of using and paying off your credit card on time.

Improving a 500 credit score is very important if you want to qualify for credit cards and loans at reasonable interest rates and favorable repayment terms. So, use your secured credit card responsibly and make your payments on time to begin improving your credit.

What Do You Need To Open a Secured Credit Card?

If you have a 500 credit score and can't get a regular unsecured credit card, you should open a secured credit card.

To open a secured credit card, you will need to fill out a secured credit card application by adding basic information, such as your name, address, social security number, income, and your banking information. Your banking information is required so that if you're approved for a secured credit card, the security deposit will be deducted from the account that you provided.

That said, you should keep in mind that the security deposit that you place with the card issuer will determine your credit limit. For example, if you place a $700 security deposit, the card issuer will give you a $700 credit limit.

You should keep in mind that the security deposit will not be used as a payment on your credit card, instead, the security deposit is used to compensate the card issuer in the event that you have a balance on your credit card and you stop making payments on your account.

So, if you default on paying off the credit card, you will give up your security deposit and you will cause significant damage to your credit. So, make sure to make your payments in full and on time.

Things You Can Do To Improve Your 500 Credit Score To Get The Credit Card That You Want

If you have a 500 credit score and you want to get a regular unsecured credit card, here are some tips that you should implement to improve your credit score.

Payment History

The first thing that you should do to improve your credit score is to make all of your credit card and loan payments on time. This includes making payments on your secured credit card on time. Your payment history accounts for 35% of your credit score, so making all of your payments on time will significantly improve your credit score. Missing even a single payment can cause significant damage to your credit. So, make your payments on time and you will notice an improvement in your score.

Balances

The second thing you can to improve your 500 credit score is to pay down the balances on your accounts. Your credit utilization (how much of your available credit you're using) accounts for 30% of your credit score. So, the more you can lower your balances, the more of an improvement in your credit score you will see. As a rule of thumb, you should keep your credit utilization between 5% to 10% but never exceed 30%. If your credit utilization exceeds 30%, you will notice a significant drop in your credit score. So, pay down your balance to improve your 500 credit score.

Application

To improve your 500 credit score to get the credit card that you want, you should avoid applying for too many credit cards and loans within a short period of time. This is so because every time you submit a credit application, a hard inquiry is added to your credit report. While a single hard inquiry will not lower your credit score by much, having too many hard inquiries on your credit report within a short period of time will significantly lower your credit score. So, avoid submitting too many applications and you should notice an improvement in your score.

Account Age

If you have old accounts that are open, you should leave them open to increase the overall age of your accounts. The average age of your accounts makes up 15% of your credit score. The older your accounts, the better your credit score will be. So, if you have an old account that you barely use and want to close, you should leave it open to avoid lowering the average age of your accounts.

Credit Report

If you're not already in the habit of checking your credit report, you should periodically check your credit report to ensure that there is no negative information lowering your credit score. If you find negative information that does not belong to you, you should file a dispute with the credit reporting bureau reporting the incorrect information to have it removed from your credit report so that it no longer pulls down your score.

Bottom Line

At this point, it should be clear that getting a credit card with a 500 credit score will be very difficult. So, instead of applying for a regular credit card, you should apply for a secured credit card. Secured credit cards work the same way as does a regular credit card, and so they will allow you to build your credit and improve it. Once you've improved your credit score, you can then apply for a regular credit card.


How Does Compound Interest Work?

Whether you're investing money or calculating the amount of interest on your loan, you may be wondering what compound interest is and how it works? We will explain what compound interest is, as well as how it works in much detail below.

How Does Compound Interest Work?

Compound interest, commonly known as compounding interest, works by adding the interest to a principal amount, and then calculating interest on the principal amount as well as the interest that you have previously accumulated. The simplest way to explain compound interest is that it's interest on principal + interest.

For example, if you have a savings account and you deposit $1,000 into your savings account at a 5% interest rate that's compounded annually, at the end of your first years, you will have $1050 in your account. The next year, the amount you will earn interest on is $1050 (principal + interest) because you've added the interest to your principal amount.

However, if you had simple interest instead of compound interest, you would only earn interest on the initial $1,000 that you had deposited into your savings account and the interest would be set aside, you would not earn interest on your interest.

So, if you have money in your savings, you would want compound interest because it can exponentially increase the amount of money you're saving because you're getting interest on the principal amount that you saved, as well as interest or the interest you've earned.

On the other hand, with simple interest, interest is only calculated on the original principal, you will not earn interest on your interest. You can still make money, but you will not have the exponential growth that you have with compound interest.

The number of times interest is compounded depends on your financial institution. Some banks may choose daily compounding, monthly compounding, quarterly compounding, or annual compounding.

The type of compounding is different from one bank to another. For example, Bank of America and Wells Fargo compound interest on a daily basis, however, other banks, such as Chase, compound interest monthly.

The more frequently a bank compounds interest, the more money you'll make on your savings. So, if you were to deposit the same sum of money with Bank of America and Chase at the same interest rate, you will make more money with Bank of America than you would with chase.

Compound Interest on Debt

Now that you know that compound interest is great when you're saving money, when you're trying to pay off debt, you do not want compounded interest. This is so because when you're paying off debt if the interest on the debt is compounded, you will end up paying more to borrow money because you're essentially being charged interest on a larger sum of money every month.

How to Calculate Compound Interest?

The formula for compound interest is as follows:

A = P(1+r/n)nt

  • A - Refers to the amount of money that you will have at the end
  • P - Refers to the principal amount of money that you're starting off with
  • R - Refers to the annual interest rate you've been offered
  • N - Refers to the number of times your interest rate compounds every year
  • T - Refers to the total number of years you are planning on earning interest on your money

For example, If you wanted to place $10,000 in your checking account at a 5% interest for a 5 year period compounded annually, the formula would look as follows:

A = $10,000(1 + .05/1)(1)(5)

A = $12,762.82

With the same example, if your interest was not compounded, you would use the following simple interest rate formula, which would yield the following result:

A = P(1 + RT)

A = $10,000 (1 + .05 x 5)

A = $12,500

So, as you can see from the formula above, by saving money in a savings account that uses compounded interest, you will save more money ($262.82). That said, you may believe this amount is small, but as the amount of money increases, the yields will become much higher.

Note: We were compounding interest on an annual basis, the more frequently your interest compounds, the more money you'll be earning on money in your savings account.

Why Does Money Grow More Quickly With Compound Interest?

People who are saving using a savings account that offers compound interest can grow their money more quickly than those relying on simple interest. This is so because you're earning money on the principal amount that you've invested, as well as the interest that's added to that amount. The more frequently your interest compounds, the more money you'll be able to earn.

Some banks, such as Bank of America and Wells Fargo compound interest on a daily basis, whereas other banks such as Chase, compound interest on an annual basis. So, the bigger the sum of money that you're saving the more money you'll earn in the long run.

For example, if you were to place $100,000 in an account that only offers simple interest at a rate of 5% for 10 years, you would earn $50,000 in interest. However, if the same amount of money at the same interest rate were to be placed in an account with compound interest, you would earn approximately $63,000 during the same ten year period. This is an increase of over 24% in earning by simply switching to a compounding interest account instead of a simple interest account.

How Frequently Does Compounding Interest Compound?

The frequency of which your interest compounds is different from one financial institution to another. For savings accounts, most banks have adopted daily compounding, where the interest you've earned in any given day is added to your principal amount, allowing you to earn interest on your interest.

That said, for a CD account, interest may compound on a daily basis, monthly basis, or semi annual basis. For money market account, interest usually compounds on a daily basis. That said, to determine how often your interest rate compounds, you should contact your financial institution and ask them about your specific account.

Credit Score Planet Frequently Asked Questions

1. Is compound interest good?

If you are saving money, compound interest is a great thing to have because it can exponentially increase the growth of your money. However, if you have compound interest on a loan, you do not want compound interest because it means that you'll end up paying more money to pay down your balance.

2. How does compound interest work?

Compound interest works by allowing you to earn money on not only the principal amount that you've saved but also interest on the interest you've earned. The more frequently that your interest compounds, the more money you'll be able to earn.

3. How does compound interest on a daily basis work?

Compound interest on a daily basis works by adding the interest that you've earned on your principal balance to the principal itself at the end of each day, so that the following day you earn interest on the principal amount, as well as the interest you've earned in previous periods.

4. Can I double my money with compound interest in three years?

Although you may be able to double your money with compound interest, you probably will not be able to do in three years unless you have an extremely high interest rate, which is very rare.


Can You Have Two of the Same Credit Card?

Almost every adult in the United States has a good credit card. Some of us may even have a credit card that we love and maybe thinking about opening an additional card of the same type. So, can you have two of the same credit card? We will answer this question in much detail below.

Can You Have Two of the Same Credit Card?

No, most card issuers will not permit you to have two of the same exact credit card. However, some card issuers offer different variations of the same card, and so you may be able to qualify for two of the same but slightly different credit cards. That said, although it's not totally unheard of for a person to have two of the same credit cards, most card issuers do not permit consumers to have two of the same credit cards.

Why would someone want to have two of the same credit card?

Some credit cards offer extremely good rewards or benefits, which makes having two of them better. For example, some airline credit cards offer cardholders the ability to have a passenger fly with them at a reduced rate or for free, so having two of the same credit card allows them to have two passengers fly with them at a reduced rate or for free. Airlines and card issuers have noticed this trend, and so some card issuers have prohibited consumers from holding two of the same credit card.

That said, there are ways around this. For example, if you have or wife or a girlfriend and you often travel with them, instead of you having two of the same credit card, open an account for them and they can enjoy the same perks you do.

As such, although having two of the same credit card may offer you additional rewards, credit card issuers know of the practice and have limited their exposure to paying out too many rewards and benefits by permitting consumers to only having one credit card of the same type.

Here Are Some Methods That Will Allow You To Have Two of the Same Credit Card

Different Variations of the Same Card

Some card issuers offer consumers different variations of the same credit card. These different variations may offer your the ability to hold two of the same credit card.

For example, Citi offers its American Airlines Credit Card in different variations, a visa American Airlines Credit Card, as well as an American Airlines American Express Credit Card.

Both cards offer the same benefits and rewards, the only difference is that one of the cards is a Visa card and the other is an AMEX card.

If you find a card issuer that provides such variations, you may be able to hold two of the same credit card.

That said, you should not apply for both cards at the same time. To approve your odds of being approved for both credit cards, apply for one of them, wait two to three months and then apply for the second card.

By doing this, you should be able to have two of the same credit cards.

Citi Bank is not the only card issuers that offers different variations of the same credit card. Bank of America and Chase offer different variations of the same credit card. If the different variations don't appear online, visit your local branch and they'll have access to the different variations and they'll be able to submit your application for the credit card that you want.

Authorized User

If you want to have two of the same credit card, one of the best ways to do this is to have someone else, such as your dad, mom, spouse, or girlfriend apply for the same credit card and add you as an authorized user on the account.

Once they've added you as an authorized user, you will be issued a credit card with your name on it just as would the primary cardholder. That said, the primary cardholder will be responsible for making payments on the account.

That said, you should be careful when adding yourself as an authorized user to another person's account because although the primary cardholder is responsible for making payments on the account. If they miss any payments, your credit will suffer because the account will appear on your credit report. So, only add yourself as an authorized user on another person's account that you know is responsible and will make timely payments on the account.

Applying For the Same Credit Card After Closing the Same Card

If you have a credit that offers rewards and a sign-up bonus and you closed your account, you may be approved for the same card again. However, some card issuers, such as American Express will not give you a sign-up bonus unless a certain amount of time has passed since you first received the sign-up bonus.

American Express and other card issuers do this to prevent consumers from constantly closing their accounts and re-opening them simply for the sign-up bonus.

That said if you have a specific credit card that you like and you close your account. If you wait for the specific period of time, you will be able to open the same credit card account again and qualify for any sign-up bonuses the card issuer is offering.

For example, American Express states that you can only qualify for a sign-up bonus once 24 months has passed since you first opened your account, not closed the account.

So, if you've had a credit card for 3 years and you closed your account, you may be able to open the same card and receive the sign up bonus yet against. However, to qualify for the credit card, you will need to have good credit. So, as long as you've made all your payments in full and on time, you should qualify for the same credit card.

That said, the waiting period is different from one card issuer to another. For example, to qualify for the sign-up bonus offered by the Chase Sapphire Credit Card, you will have to wait for 48 months from the date you received the first sign-up bonus to qualify for another one.

Credit Score Planet Frequently Asked Questions

1. Can you have two of the same exact credit card?

Some card issuers may allow you to have two of the same exact credit card, however, most card issuers prohibit you from having 2 of the same credit card.

2. Can you two credit cards from the same bank?

Yes, you can have more than one credit card from the same bank. Some banks offer different credit cards, and so you can have multiple credit cards from the same bank. That said, the credit cards will be different as most banks do not permit consumers to have two of the same credit card.

3. How long should you wait to apply for a second credit card?

You should wait at least 6 months to apply for a second credit card. Spacing out your credit card applications prevents the hard inquiries resulting from the applications from hurting your credit.

4. What happens if you apply for the same credit card twice?

If you apply for the same credit card twice, one of the credit cards may be denied as most card issuers only permit consumers to have one of the same credit card.

5. Can you apply for the same credit card that you already have?

Although you can apply for the same credit card that you already have, your card issuer will likely deny the application because most card issuers only permit consumers to have one of the same credit card. That said, if the card is slightly different, your application may be approved.