Secured Credit Card

[Anonymous]

I am applying for a new mortgage, and one thing that is hurting me is I have no debt, and no lines of credit. I have had credit in the past, but it's all been paid off and closed. I need to jump the score by a few points to qualify for the mortgage. I ran the score simulator and it said if I open a new credit card for $500, I would jump between 10 and 45 points. 

Would opening a secured credit card help at all? Or does it need to be unsecured? Does BoA pull experian only? 

Thanks!

[llecs]

Opening a CC will bump your scores in a big way (IMO, more than 40 pts). The "secured" or "unsecured" statues doesn't matter as doesn't the CL. BofA is a great choice. You can get by with the $300 min (just don't use it yet or make sure it reports $0 by the time you app). BofA pulls EX almost exclusively for CCs. BTW, the damage to your score is not the fact you are CC debt-free, but rather you lack a good mix of credit. You can PIF your CCs monthly quarterly, or whenever, be debt-free, and still get the benefit of the CC reporting.

[Anonymous]

Thanks for the response!

So I shouldn't worry about the "secured" status, as in, I've heard rumors that if BofA reports it as secured, it will not boost the scores at all? The card is actually for my father, and he has ~40 years of credit history, but like I said, he does not have a single open account anywhere. He is on fixed icome, so he was late with some payments when the accounts were open, which is what damaged the score. 

How long will it take to see the boost? He doesn't have to wait till it becomes unsecured does he? 

Thanks again. We both really appreciate the help!

[llecs]

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Kepler wrote:

Thanks for the response!

So I shouldn't worry about the "secured" status, as in, I've heard rumors that if BofA reports it as secured, it will not boost the scores at all? The card is actually for my father, and he has ~40 years of credit history, but like I said, he does not have a single open account anywhere. He is on fixed icome, so he was late with some payments when the accounts were open, which is what damaged the score. 

How long will it take to see the boost? He doesn't have to wait till it becomes unsecured does he? 

Thanks again. We both really appreciate the help!

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Ignore the "secured" status. It will scored the same as an unsecured card. The impact for a BofA CC is fairly quickly. In fact, I bet he'll see it report and impacting his score beginning on EX or even EQ before he even receives the card. BofA is fast.

[manyquestions]

If he has a bunch of old closed accounts on his report but no open credit cards and he gets a credit card he should see an immediate boost as soon as it reports.  It does not matter if it is secured. Nobody cares about the secured stuff, at least FICO does not.

[Anonymous]

I've actually done exactly what you are thinking about doing.  I applied for and received a $1,000 secured BoA VISA a little over a year ago.  My score jumped about 60 points and it was reported within 30 days of receiving the card.  It gets even better from there.  After about a year they mailed me a letter to let me know that the card was being upgraded from a secured card to a regular card and sent the deposit of $1,000 back to me within a week or two.

The card will be reported as a secured card on your reports, however, the score will jump.  It will also change to a regular card on your reports if you are upgraded.

My records indicate that they only "pull" or inquiry that BoA made when I applied for the card was from EX.

My next step is to find another card to do the same thing...possibly a Mastercard...and it's really a good way to do something we all should be doing anyway...which is saving...it's forced.

Good Luck