NEW CREDIT CARD VS. NEW SECURED CREDIT CARD

[lava224]

Is it a better idea to have multiple secured cc's reporting vs. New cc's that may be declined.and impacting your score negatively by pulling your report for approval? In other words, secured cards.are easier to get and report just the same as non secured cc's. So load up on 3-4 secured cc's to.build your credit rating. Does anyone agree?

[Anonymous]

secured cards dont report as "secured", its more about your credit limit. A 1000.00 secured card might do more long term wonders than a 300 CL unsecured

[OhioCPA]

Some secured cards do report as "secured". BOA is one that does. While easier to obtain, an approval on a secured card is not guaranteed. You should do your homework and research which might be the best option for you.

I would also think that a $1,000 secured card would be better than two at $500. Perhaps the best option is to get a secured card now, then add a few store cards in four to six months so to have three TL's reporting.

Also, if you are rebuilding I wouldn't worry too much about the INQ's. Just be selective on your applications and only apply for cards that you will use.

[Steelersfan904]

---

@OhioCPA wrote:

Some secured cards do report as "secured". BOA is one that does. While easier to obtain, an approval on a secured card is not guaranteed. You should do your homework and research which might be the best option for you.

I would also think that a $1,000 secured card would be better than two at $500. Perhaps the best option is to get a secured card now, then add a few store cards in four to six months so to have three TL's reporting.

Also, if you are rebuilding I wouldn't worry too much about the INQ's. Just be selective on your applications and only apply for cards that you will use.

---

From what I am hearing Wells Fargo reports as secured also.

[Wolf3]

---

@lava224 wrote:
Is it a better idea to have multiple secured cc's reporting vs. New cc's that may be declined.and impacting your score negatively by pulling your report for approval? In other words, secured cards.are easier to get and report just the same as non secured cc's. So load up on 3-4 secured cc's to.build your credit rating. Does anyone agree?

---

I used 3 secured cards to rebuild.   I think larger deposits and CL are better, so I think 2 secured cards with higher limits is better than 4 with lower limits.  It is best to get them with banks or CU that you want to keep doing business with for the future.  That would be my criteria for getting them.  I'd say 2 is enough, but get 3 if you have a lot of cash to deposit and 3 institutions you like.  Also it doesn't matter whether they say secured on your credit report.

If you are rebuilding, inquiries are of little consensquence to your score, so don't worry about trying a few applications if you want.  IMO, builiding with subprime unsecured cards is just as good for your FICO score, but it is likely you will have low limit cards for a long time. Most people don't like this, but it's OK if you have small monthly CC expenditures.    

[Jlu]

I've always subscribed to the idea that higher limits attract higher limits

[Revelate]

---

@Jlu wrote:

I've always subscribed to the idea that higher limits attract higher limits

---

Which means exactly butkus for FICO purposes.

Building a good credit report is tradelines, tradelines, say it once more, tradelines.  When you're starting from scratch, CL's are immaterial: payment history is God, and everything else is just gravy.

Yes, I agree that higher CL's can beget later higher CL's, but CL's don't matter, at all, unless you wish to float a balance.  You can always use the standard pay before the statement cuts trick which everyone swears by on this forum anyway.

The epeen CL's which people brag about here on the forums are to be unilaterally ignored for people in a building or rebuilding stage.  Regardless of whether that tradeline is $300, or $30000, it does not matter for FICO assuming you manage your utilization.  Get whatever you can opened (2-3 revolving accounts) as soon as possible, and go on with life.

[cashnocredit]

If you can afford the deposit, secured cards are the path to high, unsecured CLs.

Three years ago I had dings and no credit lines. I acquired two secured cards. A 25k Citi and a 10k WF. Last year they unsecured with the same CLs. There is no way I could have achieved that in the timeframe without secured credit. Especially when I had some baddies remaining at the time they unsecured.

That said, the CL size doesn't affect FICO at all. Fico only deals with ratios. Some other, mostly FAKO, scores do use CL size but FICO doesn't.

[Anonymous]

---

@cashnocredit wrote:

If you can afford the deposit, secured cards are the path to high, unsecured CLs.

Three years ago I had dings and no credit lines. I acquired two secured cards. A 25k Citi and a 10k WF. Last year they unsecured with the same CLs. There is no way I could have achieved that in the timeframe without secured credit. Especially when I had some baddies remaining at the time they unsecured.

That said, the CL size doesn't affect FICO at all. Fico only deals with ratios. Some other, mostly FAKO, scores do use CL size but FICO doesn't.

---

Well said.  This is what worked for my husband and I as well.  We didn't even have a FICO® score this time last year.  We got three secured credit cards, deposited the limit of $5,000 on two of them and the limit of $3,000 on the other.  This helped us greatly in getting good starting limits on all the unsecured cards we got at the first of this month.  However, as everyone else has already stated, for FICO® building you could also work from depositing the minimum -- that's up to you.  The important thing is building excellent credit history through making all your payments on time. 

I wish you the best on your credit journey! 

[Crashem]

I agree with all the posts especially cashnocredit. You want 3 tradelines reporting to max out fico assuming good behavior. I would make one as big as possible assuming limited budget. Also make sure big tradeline does not report as secured. Important that first unsecured app is to issuer who likes to beat your biggest tradeline as opposed to high average