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04-09-2014 05:14 PM
Perhaps it's not a huge big deal, but it definately is the principle.
04-09-2014 05:44 PM
I agree, Toi.
1) You just don't change the way you are reporting and not inform you customers.
2) It may not effect your score but you don't know what influance it would have if you were getting it review by a person.
I have been unsuccessful in getting the reporting changed back. If anyone has any suggestions on how I can get my situation correct, please Inbox me.
04-09-2014 07:35 PM - edited 04-09-2014 07:39 PM
I'm of the opinion that FICO scores actually overestimate the risk when a card is secured*. People think of secured CCs as a red flag that a person has bad credit but the reality may be different. Further, there is other evidence I've seen personally that this is the case. Let's take an example:
Imagine two people. both with a 10k CC, one secured one unsecured, with a 4k balance and both with a few CAs, say 5 y/o of say $500 each that have been paid..
What is the risk of default within 2 years, which is what credit scores estimate.
I maintain that the risk of default of the person with the 10k secured card is lower than the person with the unsecured card. Would that really surprise anyone? I think not.
People look at a secured card as a bad credit flag but the flag is the CAs, not the secured card.
*My specific reason for this belief is that I was in a similar position 4 years ago with a couple secured cards. I was able to get a mortgage with that file. Needless to say I have since had the cards unsecured and the mortgage was has been paid off. Another interesting thing is that my VantageScore 2.0 at the time was 900 (roughly similar to a 780 FICO). The only way it could have been that high is if the fact my cards were secured weighed favorably against the CAs. Especially with a fairly thin, short file with smaller older but paid baddies. BTW, after my cards unsecured and all the baddies dropped off my Vantage score dropped to the high 800s. More evidence that secured cards are not a negative factor in credit risk.
We don't know the scoring algorithms of VantageScore 2.0 but the 3.0 version has been specifically stated to factor in secured cards and I suspect that such a similar situation would also be weighed favorably.
We do know FICO scores don't factor secured status but in the future they may do so as well. But the widespread assumption that a secured card status is a "Bad Thing" is, IMO, highly dubious. CAs and liens, especially unpaid ones are the bad things.
04-09-2014 08:54 PM
I opened my secured account with them in 2012. For me, it's always been reported as "secured" with all 3 CRAs.
09-24-2014 04:07 PM
Do you know if they report secured share loans as secured ?
I'm gettin loan secured. I could care less as long as fico recognizes the installment loan. We all know principle. But if they decide to change. No big deal. I would not need manual review since my score hit roof. Anyway. Secured IMO is for rebuilding or building. Once I out grew the secured card I never looked back. No need to micro manage the small stuff.
09-29-2014 03:51 PM
I called today and the representative insists the secured card does not report as secured. Someone who has this card please confirm before I apply. Thanks!
09-29-2014 04:42 PM
09-29-2014 04:44 PM
YES it does! ...They started reporting secured about 5 months ago.
It matters not what they report ..secured vs unsecured... it's the same damn thing for scoring purposes. It's like a card that gets closed at consumer's request vs closed at credit grantor's request - it doesn't really matter unless a loan officer is manually reviewing your report and even then it carries little weight.
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