topic Re: Secured Credit Questions in Rebuilding Your Credit

Secured Credit Questions

Anonymous — Thu, 21 Nov 2019 03:56:50 GMT

My husband and I are both looking to build/rebuild our credit. We both have pretty thin credit profiles - I have one credit card and an auto loan, he’s a co-signer on the auto loan.
One of the suggestions we’ve been given from different mortgage lenders is to open up secured cards to build up our credit. There seems to be some variation as to how many (one lender suggested one, another suggested at least 2-3). We’re currently looking at OpenSky, Discover, and Citi. How many cards would be appropriate to open? How much should we put down - the minimum $200 or more? We make good money and can afford to put down quite a bit.
Thank you!

Re: Secured Credit Questions

CGeorge — Thu, 21 Nov 2019 06:34:41 GMT

A thin credit reort is very different from a bad credit report. It sounds to me like even though you don't have a lot of credit experience, what you have is good.

Stay away from Open Skip and all secured cards. Discover is you best bet.

Re: Secured Credit Questions

AllZero — Thu, 21 Nov 2019 07:24:10 GMT

Are you looking to apply for mortgage soon?

3 revolving credit cards and 1 installment loan (auto, student, mortgage) is minimum required to get maximum points.

Get your 3 bureau FICO scores for $1 at Experian.com or creditchecktotal.com. Cancel in 7 days or less to avoid reoccurring charge.

Secured card recommendation:
Bank of America
Discover
Local Credit Union
Navy Federal Credit Union

Not recommended secured card:
Capital One
Wells Fargo

Re: Secured Credit Questions

FireMedic1 — Thu, 21 Nov 2019 08:32:42 GMT

@CGeorge wrote:
A thin credit reort is very different from a bad credit report. It sounds to me like even though you don't have a lot of credit experience, what you have is good.

Stay away from Open Skip and all secured cards. Discover is you best bet.

That would be nice but some dont have that luxury fresh out of the gate. FICO doesnt care what the name of the card is or the companys name. Its how you handle credit. Yes Disco will graduate from secured if they dont get the unsecured version.

Re: Secured Credit Questions

recoveringfrombk7 — Thu, 21 Nov 2019 13:24:34 GMT

Why don't you recommend Capital One?

Re: Secured Credit Questions

failur3byh3art — Thu, 21 Nov 2019 13:40:11 GMT

I'm no expert, but I would second that Capital one wouldn't be a good secured option. If you were desperate and had scores of 490 across the board, then maybe... The thing is I have a Capital one secured and after hearing that cap1 cards do not unsecure, you would not get your deposit back regardless unless you close the account. This means the card would not grow and ultimately when you cancel the card, it'll harm your AaOA(Possibly). I would definitely recommend Discover because the card can indeed graduate and grow. This is also just my opinion as others would probably disagree, but if you don't have any baddies or debt, then definitely choose better secured options that will grow. Citibank is good as it would graduate and get your foot in the door with them with responsible use. Opensky would be more towards those with terrible credit who are wanting to rebuild.

Re: Secured Credit Questions

OmarGB9 — Thu, 21 Nov 2019 15:10:09 GMT

Yes, one installment loan plus three cards is ideal for FICO scoring, but you can get away with the loan and only two cards, so long as only one reports a balance (but still feel free to use both as much as you want). Discover, Citi. BoA secured are pretty good. Capital One secured is good too, the only downfall is it doesn't graduate to unsecured like the others. Open sky is another viable option, but is really geared more towards those with bad credit, IMO.

Re: Secured Credit Questions

Anonymous — Thu, 21 Nov 2019 16:57:47 GMT

If you are building credit, I would check the prequals for unsecured cards from Capital One and Discover before I went to a secured card. If they can't prequal you for unsecured THEN take the secured route. OpenSky doesn't do a hard pull if I recall correctly so there's that as an added bonus.

If you are rebuilding, then go for the secured and get to work on any baddies showing on your reports.

You already have the installment loan for the car, so 1-2 cards using the AZEO method would give you a decent boost and bolster a thin file. Best of luck to you!

Re: Secured Credit Questions

AllZero — Thu, 21 Nov 2019 21:44:34 GMT

@recoveringfrombk7 wrote:
Why don't you recommend Capital One?

As mentioned up thread, 2019 data points show secured Capital One will not graduate.

Secured Wells Fargo takes a very long time to graduate.

Re: Secured Credit Questions

recoveringfrombk7 — Thu, 21 Nov 2019 22:03:02 GMT

Bummer. I included Cap One in my ch7. Was just hoping to get back with them by showing responsible use. Should I just cancel it and wait until I get a prequal then? Or hang onto it? I only deposited 49 and got a limit of 200. The site says I can get CLI without additional deposits starting at 5 mos. I'm happy to let them keep the 49 if the card will grow well over time.

Re: Secured Credit Questions

AllZero — Thu, 21 Nov 2019 22:14:04 GMT

^ Keep the secured card for now until you're able to move up to unsecured cards.

Re: Secured Credit Questions

recoveringfrombk7 — Thu, 21 Nov 2019 22:38:08 GMT

I have unsecured cards with Ollo, Target, and Merrick, no AF. I have unsecured with Credit One that I'm cancelling in december to dodge the AF. And I have secured Discover. Unless you mean until I have an unsecured card available through Cap One?

Re: Secured Credit Questions

AllZero — Fri, 22 Nov 2019 00:19:13 GMT

^ I meant hold onto the secured Capital One card unless they are charging you annual fee. Keep it to rebuild your history back with them. Keep it for a year or so, then you can evaluate where you are with them in regards to prequals.

I didn't realize you had other unsecured cards. Good job.

Re: Secured Credit Questions

recoveringfrombk7 — Thu, 21 Nov 2019 23:23:08 GMT

Awesome, thanks for the clarification.