A credit builder card is a special type of credit card that is meant for the ones with no, low, or hardly any credit history. If you have a low credit score or no credit score at all, securing a regular credit card can be difficult. It can be even more difficult for you to get a loan because the lender has no reference point to judge your reliability in terms of paying back the loan on time. This is where a Zolve credit builder card comes into the picture because it builds up the credit score for you.
Though that sums up a credit builder card for you, there is a lot more to know about it. So, here it goes!
How does the credit builder card work?
The basic mechanism of working is the same for a credit builder card as it is for any other card. You use your card to spend money on different things. After that, there is a set date by which you need to repay the amount.
However, keep in mind that this is not your standard credit card. You have this card to build your credit score. So, keep the following points in mind about using this card the right way:
Keep the balance low - Credit rating agencies take into account how much of the available credit is being used. So, if your regular usage is very close to the credit limit, it is not a sign of financial well-being.
Remain within credit limit - The idea is to be a responsible borrower, which means staying within the credit limit.
Avoid cash withdrawals - Cash withdrawals from credit cards are marked on the credit report. It is also not a good sign when it comes to showing your financial responsibility. Of course, if you are in dire emergency, maybe you can do it once. But do not make cash withdrawals from credit cards a habit.
Pay the balance completely - Getting a credit builder card and not paying the balance on time for that is simply ironical. Remember to pay the complete amount in full and on time for every month. Forget missed payments - even late payments can make the credit score take a dip.
Is a credit builder card something you need?
The first thing you need to consider is whether you are eligible for a standard credit card. If not, you have all the more reason to get a credit builder card. So, summing up, you will need a credit builder card if any of the following holds true for you:
- You have struggled with debt in your past and have low credit scores for that.
- You can't build up a good credit history at this point because of age
- You have recently shifted to and settled down in another country
- You are about to apply for a loan and the lender might not approve because you have no or low credit score.
If any one or more than one points mentioned above hold true for you, get yourself a Zolve Credit Builder card right away. Choosing Zolve is a step in the right direction in terms of bringing financial discipline in your life.