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HiLine
Posts: 2,831
Registered: ‎10-19-2012

Re: Did I make the right choice with secured cards?


Mutterz wrote:

I know for a fact that the BoA and Wells Fargo card will report as non secured cards. 

 





This is not true. As a BofA secured card holder, I testify that BofA reports my card as a secured card.

Back to the OP, good strategy if you have that much cash to set aside. However, once you get your first non-secured card with a high limit, you should start closing the ones that are less likely to graduate. I think the BofA is the only one guaranteed to graduate after one year. Wells Fargo is a hit or miss, most likely a miss. 

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Mutterz
Posts: 9
Registered: ‎12-25-2012

Re: Did I make the right choice with secured cards?

Hmmm I will see when I get the card. Maybe he was wrong. Does it really matter if it report that way?

 


financekid wrote:
Like jsucool76 I have bad news too, I have BofA secured on my report it does say secured, although I understand it doesn't matter for FICO scoring.
The other thing with BofA unsecuring requires another credit check which you may or may not qualify even if its been a year, in that case the only way to get your funds back would be to close the account. Don't quote me but I could have sworn that's what my rep said , it could be different for each bank.



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webhopper
Posts: 7,230
Registered: ‎09-16-2011

Re: Did I make the right choice with secured cards?

I think that you made a smart move...

after 1 year you can re-evaluate your position and make changes as needed. 

 

With a score of 580, I would evaluate your credit report and identify any negative information.. Try to get any negatives cleaned up if possible...  the rebuilding forum has great advice regarding this.

 

Otherwise, smart move to get started on your journey. 


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Revelate
Posts: 8,147
Registered: ‎12-30-2011

Re: Did I make the right choice with secured cards?

[ Edited ]

Mutterz wrote:

Hmmm I will see when I get the card. Maybe he was wrong. Does it really matter if it report that way?

 


financekid wrote:
Like jsucool76 I have bad news too, I have BofA secured on my report it does say secured, although I understand it doesn't matter for FICO scoring.
The other thing with BofA unsecuring requires another credit check which you may or may not qualify even if its been a year, in that case the only way to get your funds back would be to close the account. Don't quote me but I could have sworn that's what my rep said , it could be different for each bank.




 

The BOFA card does indeed report as secured and I'm 100% confident of that :smileyhappy:.

 

That said, for credit score building purposes, it doesn't matter at all, and BOFA does reliably graduate in a year after which it will report as unsecured on the credit report. That holds for all secured products which graduate.

 

I'd offer a different strategy though from what you postuated: run as much of your financial life through the cards as you can.  Limits which you don't actually use have a tendency to get cut at graduation, and there's no need to be that conservative anyway.  For pure FICO prettiness, you simply need to pay before the statement cut date with any of those lenders from what I know anecdotally about WF / USBank (BOFA I know works this way); however, unless you're applying for something in the near future (i.e. next two months) there's not much reason to be zealous about reported balances as long as they're not way out of whack and on the assumption you can reasonably pay the charges... making an admittedly large assumption here with regards to your 15K deposit that your expenditures are higher than $300/month.

 

In any event this offers two things over the $100 per month per card model: you actually wind up being a more profitable customer for the banks, which banks do take into consideration when it comes to underwriting additional applications, but you also do get all the other benefits of using credit cards as well: rewards, consumer protection, etc.  

 

Do get the 1-2-3 rewards package added to the BOFA card, it's an incredibly good starter card and I highly applaud your approach in opening up 3 solid limit secured cards for credit building.  

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cashnocredit
Posts: 948
Registered: ‎07-18-2009

Re: Did I make the right choice with secured cards?

Putting a lot into secured cards is a great way to high CL later. It doesn't really take that long to unsecure and then you have credit records with high CLs and no indication that they were originally secured. That;s what I did. I later PCed one into a world elite mc.

I have reestablished credit over the last couple years
so my moniker is, well, rather out of date.

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