I've been applying for many years for secured credit cards. Denied. Denied. Denied. Thin credit file. Not enough credit history. I've been running as fast as I can, but I just needed that little bit of elevation, and I'd get my wings airborne. Then I can soar!
The good news is that Navy Fed approved my secured nRewards VISA card in August 2020. I had no FICO scores, so I didn't get a CLI after three months. I had to wait seven months for my FICO 9 scores to be calculated on my TU and EQ CRs, which were 747 and 745, respectively. I noticed my nRewards VISA's credit limit was set at $2,000 three days after my seventh statement closing date. My available credit remained at $1,000 (my security deposit) for another two days. It took six days after my statement closing date for Navy Fed to release the hold on my entire security deposit. By then it meant I definitely graduated!
From my research on this forum, I knew to apply for a second credit card at Navy Fed before requesting a CLI on my first card. But first, I wanted to increase my Navy Fed internal score and my chances of being approved for a second credit card by getting a shares secured loan and paying it down to show that despite a very short credit history, I could responsibly manage multiple credit accounts.
As soon as my secured nRewards VISA credit limit went to $2K (March 17th), I applied for a 60-month, $3,000 Navy Fed shares secured loan. I filled out the paperwork online and was immediately approved that afternoon. The $3K funds were released into my checking account after 2 AM Eastern Time the next morning (March 18th), and I immediately paid $2,733.18 for a balance of $267.00 (8.9%). My next $20.22 payment is due 7/27/2025. (As a side note, this new loan account posted on my other CRs on Apr. 2nd and 3rd, but it posted on my EX CR on Apr. 7th. EX shows my FICO 8 score at 754. I don't know what's up with the delay, but I'm happy with my score so far.)
I probably should've waited another day or two before I made my next move, because at that point, it was only 22 hours after I'd paid my loan balance down to 8.9%. I don't think this payment history had propagated to the credit approval department yet, because I got dinged for it when I applied online for a Go Rewards card. I didn't get instant approval, just the "Wait 24 to 48 hours for a response" message.
24 minutes later I got an email message announcing I'd been approved for a $1,600 CL at 16.99% interest. Graduation and a second, unsecured NFCU credit card = wheels up! Finally in flight mode!
Application details and financial behavior: $32.6K annual income, 13% DTI, direct deposit of one to four paychecks every single month for four years straight (usually three paychecks), 75% of annual income deposited into Navy Fed accounts. No bounced checks, no overdrafts, etc. Ever. On average, once per week for seven months, I paid credit card balance in full before purchases posted, except I let $20 to $30 (2% aggregate, 2% to 3% individual) report to the CBs each month. I then PIF right after my nRewards credit card account was reported. I averaged nearly $600/mo spend, so the $1,600 CL is an appropriate starting limit for my income level and adequate for my past spending level but not enough for my anticipated spend after next quarter. I'm going to need a CLI!
My letter from Navy Fed states my internal credit score: 310.
Here are the key factors that adversely affected my Navy Federal credit score (my notes in parentheses):
1. Amount of non-mortgage account balances paid down in last 24 months ($2,733.18 or 91.1%)
2. Months since oldest credit card opened (7 months)
3. Number of revolving accounts (2)
4. Ratio of credit union balances to credit limits or original loan amounts (nRewards 0% balance for 3 days prior, and 0% for most of its history; shares secured loan 8.9% balance for 22 hours prior, and 100% balance for 12 hours before that; other non-CU credit card reported 0% for previous two months)
5. Number of inquiries on credit bureau report (TU CR: two in the last 12 months, three in the last 24 months)
Without the updated payment history from nearly 24 hours prior, #1 probably showed 0% paid down on my loan, and #4 probably showed a 100% balance of the original loan.
Having the brand new loan hurt my Navy Fed internal score and may have resulted in the 16.99% interest rate instead of a slightly better one. I don't carry balances, so it's not going to hurt me, but it does indicate that I'm a relatively high risk customer. My nRewards card graduated to a CashRewards VISA, and it's eligible for an interest rate reduction in four months. By that time, I expect an 8.5% loan balance and a FICO 9 score around 760, so I'm hoping for a 14.99% interest rate or better.
A few days after the Go Rewards application, I requested a CLI to $4,000 on my CashRewards VISA. Denied. The letter says "Unfortunately, after careful consideration, we are unable to approve your request. This decision was based on the following reason: There has recently been a change to the credit line on this account." I'll request a CLI again after six months.
When I applied for the Go Rewards credit card, there was nowhere online to request a MasterCard instead of a VISA card, so I called Navy Fed. I was told I'll have to wait until I receive the new card, then call back, and they'll do a PC and issue me a new card. After I got off the phone, I got to thinking: "By the time that happens, I'll have eight months of perfect payment history. If they'll let me, why not PC to an American Express for my business travel expenses if it's the same interest rate?"
So, I did! Now Navy Fed is sending me a More Rewards American Express credit card with a 16.99% interest rate.
I know. I know. You're going to admonish me for not applying for the More Rewards card in the first place to get that sweet SUB. First, in March it required $3,000 of spending in the next 90 days to qualify. Not happening. Instead, I'm investing my money to max out my Roth IRA contributions for 2020 by the Texas June 15th deadline. Second, I read in these forums that American Express is the UW for Navy Fed's More Rewards card. I figured American Express is very unlikely to approve my application with only seven months of credit history, so I didn't want to waste another HP. My best chances for approval would have been another CashRewards card or a Go Rewards card. (I don't carry balances, so I don't need the Platinum, even if it were a lower interest rate than the others, which is doubtful. The Flagship is out of my league.)
So, thank you Navy Fed and WebBank for giving me a chance, and thank you all here at MyFICO forums for posting your great advice! You've all been extremely helpful, and I'm tremendously grateful to be on my way to my financial goal of buying a house in a few years! Oorah!
@M_Smart007 wrote:Congratulations on your graduation & approval! ...
Mark your calendar for (1) year anniversary on your card(s) and ask for a APR reduction.
Thanks! I will!
Congratulations on your graduation 🎓 and approval! Thank you for sharing the data points.
Grats to all your continued success!
@AllZero wrote:
Congratulations on your graduation 🎓 and approval! Thank you for sharing the data points.
Thanks! My details should help others to not make the same mistakes I did.
