26yo grad student; never had a credit card, denied for preapproved and secured cards--what to do?

[mnavas]

Well yeah paying an annual fee for a credit card sucks but sometimes there's no other option and well maybe a credit union might give you a credit card without paying any fee...

You don't need to have a secured card open for a long period of time, one or two years are enough to build a great credit profile and remember this: even if you close the account, the whole payment histoy will stay in your report for ten years 

Im sure you have a good shot if you decide to apply for a cap 1 secured card or any other secured card just don't apply for prime cards cuz you'll only end up with more hard credit inquiries in your report (which will be bad)

Anyway my other recommendation is: you should get two credit cards (it doesn't matter if they're secured) use them for small purchases and within a year you'll get  a good score which will help you to apply for insecured cards like Discover, chase etc

[Swapmeet]

I stand by my earlier advice. To your new questions about inqs, do not be frivolous with them, but don't worry about the 2 more that you are going to get with the two secured cards -- they can't hurt your score until you have one right? First focus on getting a score. Six months of secured cards will do that. After six months you will most likely have a GE approvable score, and you can apply for an unsecured revolver a couple months later. Don't worry about the AF because most companies will waive your first year, and you will have it closed within that year anyhow.

[slippy84]

Three questions:

1. What's your income? If you're not apping for student cards, you could be denied based on not meeting an income requirement.

2. Do your parents have good credit? If so, can you convince them to add you as an authorized user on one or two of their old cards?

3. Each denial should result in a letter sent from the lender telling you why they denied you. What reasons did US Bank give for the denials?

[Anonymous]

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@slippy84 wrote:

Three questions:

1. What's your income? If you're not apping for student cards, you could be denied based on not meeting an income requirement.

2. Do your parents have good credit? If so, can you convince them to add you as an authorized user on one or two of their old cards?

3. Each denial should result in a letter sent from the lender telling you why they denied you. What reasons did US Bank give for the denials?

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1.  About 17k per annum; I'm supported by my assistantship.  This will (hopefully) increase once I join the work force at the end of the summer.

2.  Unfortunately, parents aren't an option.  Good idea, though--thank you for the suggestion.

3.  "Number of accounts currently or in the past not paid as agreed" and "Lack of recent info on rvlvng/open accts, or lack of rvlvng/open accts".  I have another denial from Bank of America (I was wrong about all three of the cards being US Bank) that says, "current or past dilenquency with one or more of your creditors and you do not have sufficient credit references with recent payment history."

Thanks again.

[daybreakgonesXe]

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@Anonymous wrote:

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@slippy84 wrote:

Three questions:

1. What's your income? If you're not apping for student cards, you could be denied based on not meeting an income requirement.

2. Do your parents have good credit? If so, can you convince them to add you as an authorized user on one or two of their old cards?

3. Each denial should result in a letter sent from the lender telling you why they denied you. What reasons did US Bank give for the denials?

---

1.  About 17k per annum; I'm supported by my assistantship.  This will (hopefully) increase once I join the work force at the end of the summer.

2.  Unfortunately, parents aren't an option.  Good idea, though--thank you for the suggestion.

3.  "Number of accounts currently or in the past not paid as agreed" and "Lack of recent info on rvlvng/open accts, or lack of rvlvng/open accts".  I have another denial from Bank of America (I was wrong about all three of the cards being US Bank) that says, "current or past dilenquency with one or more of your creditors and you do not have sufficient credit references with recent payment history."

Thanks again.

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With 17k you're a shoe-in for student cards. However, i'm not sure if they'll look at your negatives favorably. Of the top student cards, here are your most likely shot at approval, in order:

Cap One Journey, Citi Forward Student, and Discover IT Student.

Best of luck in your credit journey!

[lithium78]

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@Anonymous wrote:

Thank you so much for your responses, everybody.  I have a few more questions now.

- I have 3 hard inquiries from within the last two months.  Could applying for more credit cards hurt me?  How can I be "sure" that I can use my next inquiry to get approved?

- I'm naturally wary of annual fees.  Am I just going to have to suck it up?  Isn't it bad to cancel credit cards--will I be paying a fee for the rest of my life?

Again, thank you everyone for the advice.  In particular, I've never heard the thing about credit unions.  I'll have to read up on that.

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1.  Having more inquiries will negatively affect your credit score.  However, having no credit cards makes it really difficult to improve your score anyway, so you will probably have to take another hit or two.  Unfortunately, there's no way to guarantee that a hard pull will result in an account, so you have to take an educated guess on who will accept you and roll the dice.

2.  Unfortunately, when you are starting out with defaulted student loans, you are probably going to have to pay annual fees on credit cards that accept you.  From their point of view, they are taking on a significant risk by loaning money to somebody who is statistically likely to default, so they are really cautious.  Even most secured cards will require an annual fee at first.  Your best chance to avoid an annual fee is to get your secured credit card with a credit union.  Credit unions are not-for-profit, so they will be a lot more helpful for someone with bad credit.  Many credit unions will also graduate the secured credit cards to unsecured in time.

You can look up credit unions in your area and check their requirements for membership at www.creditunion.coop. 

I would also second an earlier suggestion to use the secured credit cards for a year and then go for the Walmart credit card.  If you build your credit file a little bit, Walmart is an excellent partner for people rebuilding their credit.  While I was recovering from my student loan defaults, I got a Walmart retail card and it grew over time and eventually graduated to a Walmart Discover card with cash rewards (not great rewards, but significant, and they grew to become my biggest credit limit.)  The Walmart card will also save you money on checking your credit scores, because they provide a free TU04 FICO if you sign up for online statements.