Raise CL on Secured Cards?

[Jerry45]

I made the mistake of Applying for the Discover IT card, after receiving multiple mailers to do so.  Took the plunge with only 8 months credit history, but FICO scores from all the big 3 in the 700's. DENIED!  Called the recon line, and the rep said between the lines that my CL's on my 2 cards were too low, besides short Credit history.

Have two secured cards with $300 on each. Never wanted to put more on them, thinking that it would be hard to get my deposits back when I close them.

Anybody think that it would be wise to raise them to say $500, and then wait until my credit ages to a year? Thanks

[jmcmillan]

YES!!!!!!!!!

I think far too many people make this mistake. They open secured cards but refuse to increase the deposit past the minimum. Secured cards are a very powerful tool, so use them! Increase the deposit to the MAXIMUM THAT YOU CAN AFFORD! If money is tight, I would increase one of the cards as high as possible. As you can see from the response from Discover, your low limits held you back. You must increase!

Why do you believe you won't get your money back? After your credit has improved enough that you can cancel the cards, you will receive your deposit back from the bank. Hence, the word "deposit."

[Jerry45]

Good Advice Thanks. I think I will start by going up to $500 to start, and see how that plays out. I do realize the banks will return deposits, but they are known to wait 30 to 60 days to do so.

[jmcmillan]

You need to be thinking about this differently. The money you put on deposit is not gone forever, but you do need to look at this as an investment. The higher amount you place in deposit, the higher unsecured credit lines you will receive. I don't know which secured cards you have, since you didn't mention them by name, but it shouldn't take longer than a few weeks to get your deposit back. Even if it does, who cares? The money you are using in your deposit shouldn't be money that you are relying on for food or rent. The bare minimum you should consider is $1,000.

[Revelate]

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@jmcmillan wrote:

You need to be thinking about this differently. The money you put on deposit is not gone forever, but you do need to look at this as an investment. The higher amount you place in deposit, the higher unsecured credit lines you will receive. I don't know which secured cards you have, since you didn't mention them by name, but it shouldn't take longer than a few weeks to get your deposit back. Even if it does, who cares? The money you are using in your deposit shouldn't be money that you are relying on for food or rent. The bare minimum you should consider is $1,000.

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Hrm.

While I agree that larger secured cards are better, and placing the maximum you can afford to tie up for a year is recommended, the simple fact is that you get 100% of the real FICO benefit by just having a secured card at all, as long as it reports.

Increasing one's TL after the fact can trigger a HP depending on the lender, and that's just wasteful when an Amex charge card opens up at 6 months, and decent unsecured options open up at 1 year.

[jmcmillan]

The OP isn't looking to get a bost in FICO, s/he is looking to get approved for unsecured credit, which was denied based on the fact that the OP has ultra-low limit cards (with a 700 FICO). I'm just making the suggestion in order for the OP to get approved, and get approved with a decent limit. This is entirely possible with secured cards.

[Jerry45]

I did not realize that Secured cards did hard pulls, just to increase CL's.  The Card I want to increase is First Progress, so I guess will call them to see if they do a HP. But as you said, why risk a hard pull when I can just wait.  The Discover denial and HP were bad enough.

[Jerry45]

Agreed Thanks. FICO is not the problem per Discover. I did screw up by applying at 8 months though

[takeshi74]

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@Jerry45 wrote:

I made the mistake of Applying for the Discover IT card, after receiving multiple mailers to do so.

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Don't just repond to mailers.  Apply for what you want/need when your credit is in shape to do so.  Mailers (including preapprovals) are just marketing.  Don't let the marketing departments tell you when to apply.

[Jerry45]

I agree it was a boneheaded move on my part. I ignored good advice here to wait on Discover, but was suckered by the mailers.