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Regular Contributor
Yoli14
Posts: 163
Registered: ‎01-03-2012
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Newbie question

New here with a question. I am trying to rebuilt my credit and looking into a secured credit. I am a member with a credit union but they only offer secure cc to people starting with credit. I was offreded a secured personal loan. Does anyone know how it works? Thanks!
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Valued Contributor
rootpooty
Posts: 1,772
Registered: ‎10-28-2011
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Re: Newbie question

A secured loan is pretty much you giving 1000 dollars for example to the cu and saying loan it back to me. As far as secured cards go look into ones that graduate. Can you get in with NFCU? If not I highly recommend bofa secured. Usaa Citi wells fargo and us bank also offer secured cards that graduate but I have no experience with them
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Moderator
Revelate
Posts: 9,732
Registered: ‎12-30-2011
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Re: Newbie question

[ Edited ]

Yoli14 wrote:
New here with a question. I am trying to rebuilt my credit and looking into a secured credit. I am a member with a credit union but they only offer secure cc to people starting with credit. I was offreded a secured personal loan. Does anyone know how it works? Thanks!

Heh, any CU that refused to even consider giving me a secured credit card, would be one I would likely stop doing business with: gee, let's reduce our exposure and have an additional deposit on file that we can either loan out to another person, or to use as part of our mandated reserve requirements.  Nah, that sounds like a bad idea!

 

That said, take their secured loan, turn right around with the cash they give you and go open a secured cc somewhere else with it.  The loan will count as an installment loan rather than a revolving credit line (credit card) and ideally you want both if building credit.

 

I second the BOFA recommendation: BOFA is incredibly annoying about some things but their secured card is world class.  USAA isn't a bad option for a second secured card, but I wouldn't want them primary (they don't graduate).  Citi no clue, Wells has a bad reputation here, and US Bank has been reported to be pretty good too.

 

Edit: with your scores, you might try Orchard bank as well and luck out into an unsecured card instead of a secured one (they do one pull and decide which card is for you), even I got approved for unsecured somehow.  That plus a secured card somewhere else, and the secured loan, would give you a very nice setup to start building credit history on.

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trumpet-205
Posts: 2,505
Registered: ‎11-11-2010
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Re: Newbie question

[ Edited ]

Like the name implied, it is a personal loan. Basically CU give you say $1000 cash, and you are to pay back this $1000 plus any interest over an agreed fixed term (like 12 months). If the interest is not outragoues I think this is a nice option.

 

You can also use this $1000 to open up secured CC. Make sure you spend only what you can pay back in full.

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Frequent Contributor
Odiseous
Posts: 289
Registered: ‎03-08-2011
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Re: Newbie question


trumpet-205 wrote:

Like the name implied, it is a personal loan. Basically CU give you say $1000 cash, and you are to pay back this $1000 plus any interest over an agreed fixed term (like 12 months). If the interest is not outragoues I think this is a nice option.

 

You can also use this $1000 to open up secured CC. Make sure you spend only what you can pay back in full.



This is one of the ways I started working on my credit ($500 secured loans). Simply deposit it into saving, then take out the secured loan. I paid my secured loans off after 4 months (to save in interest). 

 

I did it, to show I could pay back loans, and for credit mix. I also opened some secured CCs at the time.

 

In the end, I pumped up one of my secured cards, using the money released from the secured lonas; then App'd for a prime card. Now, I'm golden.

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Mega Contributor
LS2982
Posts: 15,436
Registered: ‎04-09-2011
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Re: Newbie question


Yoli14 wrote:
New here with a question. I am trying to rebuilt my credit and looking into a secured credit. I am a member with a credit union but they only offer secure cc to people starting with credit. I was offreded a secured personal loan. Does anyone know how it works? Thanks!

You may want to try Cap1's prequalify site, also getting that personal loan and paying on it 6 months on-time can help.




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