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@Jhm_13 wrote:
I currently sit at around 660-665 but want to apply for a new credit card to help build my credit. My average credit card limit is less than $2000 which is hurting my score so they say. I do have some accounts that went to collection but have been paid in full and I plan on sending GW letters to try and remove those.
My question is, should I do a secured card or try for something else? I'd hate to get an inquiry on my CR just to be denied.
With regard to the bolded: nope. Credit limits aren't a factor in FICO scoring.
I've had good success with secured cards, so I always think they're a good idea if you can come up with the deposit.
The credit card limits under $2000 is usually something that the FAKO scores will tell you, but FICO really doesn't care about you limit, it really only scores you're UTL. How recent were those collections? Depending on who/what they were for, it might be better to try to GW them first before applying for new credit. Having said that, with those kind of scores, assuming that they are FICO scores, I don't see it really necessary for you to get a secured card thru capital one. That card is generally for people who have even worse credit. I have a secured Cap 1 card, and I have no complaints with them thus far. If you really want to go the secured route, there are definitely better secured cards out there that offer reward programs and some eventually graduate to unsecured cards.
I wouldn't worry about the whole less than $2000 comment, in FICOs eyes, its how you are using the cards and not how much your limit is. Try and get your luck at getting those collections off your CR via GWs, if they are willing to remove them you will have a much better chance getting approved with a better card.
Good Luck, hope the info helps!
Jhm, with your scores and a few baddies on file, I would suggest you first attempt a Bank of America unsecured 123 Rewards card. If you are denied you stand a good chance of being instantly offfered the BOA partially secured 99/500 card ($99 down for $500 credit limit). This is a better option because:
1. Bank of America will upgrade your secured card to an unsecured card after about 12 months of good history; Capital One will never unsecure.
2. Bank of Amerrica will start you out at $500 CL; Capital One starts at a low $200 (which you can add more money money later).
Now, if you can't get the BOA unsecured or secured cards, Capital One is the next best secured card. It'll offer a free monthy Experian credit Fako score and quarterly credit report via mycreditinform.com (which is a good perk if you wan tto folloow your rebuild progress easily).
I started with Capital One (FICO mid-to-high 400's) in June 2012 (just closed it this month after a solid year of service); got the BOA secured April 2013 (FICO high 500's to low 600's). The secured cards helped in my repair process and I also now have Chase, Barclaycard and Walmart (all opened June 2013). I had several defaulted loans still showing at the time of app, plus like 3 or 4 other baddies. Your milage may vary, but I have a strong feeling you'd get the Bank of America card!
Good luck!