Increase CL on Wells Fargo Secured or get new BofA card?

[Brusilov]

After finally facing the reality of my poor credit score and history about 6 months ago I did some reasearch and ended up getting the Wells Fargo Secured credit card with a collateral deposit & limit of $500.  Since getting the card in August I've been pleased to see my score rise from 540-550 across the 3 bureuas to just slightly over 600 currently.  Right now I have 0 other forms of credit other than my Wells Fargo card and since I have some extra money I'm wondering what would be more beneficial to my score 12+ months down the road.  Would it be better to have two smaller limit secured cards gaining history, a larger, say, $500-ish each?  Or would my score benefit just the same from upping my WF limit to $1000+?  How many open credit accounts is the "sweet spot" for borrower inquiries and your credit score?

[SCF]

Howdy and welcome to the forums!

First, congratulations on your progress, it sounds like you are on the right track.  Have you checked out the "Rebuilding Your Credit" forum here?  There are a lot of good resources there to help you minimize the impact of your poor credit history on your score by dealing with CAs, late payments and other derogatory information.  You should also take a look at these two resources: Credit Scoring 101 and the myFICO PDF Booklet.  Those will help you understand how the FICO score works, and what you can do to improve yours.

Now, to your question.  Having a higher limit on your WF CC will not directly improve your score.  What it can do is improve your utilization, or percentage of your available credit you are using, which impacts about 35% of your FICO score. The best utilization is from 1-9%.

With no other cards, I think you could benefit from having another account, especially if it is from a prime lender and will unsecure and grow with you as your credit improves.  But, before you apply, I would take a look at your credit and see what you can do to improve your scores and if anything negative is about to age off, because a few positive changes could lead to you being approved for an unsecured card or having much less risk of being denied for a great secured card, like the BofA.  In terms of a sweet spot, we have FICO High Achievers with everywhere from 2-20+ accounts, so that depends on your needs and how many accounts you can manage.

Finally, there's a thread bouncing around the front page of this forum that lists secured cards from "prime" lenders, so that's another place to start your research.

Good luck!

[Anonymous]

I have no experience with the Wells Fargo secured card, but with the platinum card (which I got after having used their debit card for a year), they automatically adjusted the CL once a year at anniversary until they replaced the platinum with the signature card. With only this card, my EQ rose to 749 after 4 and a half years and 7% util.

[Brusilov]

It's interesting that you were able to build up your score so high with only 1 credit card.  For some reason I assumed scoring would be more favorable if you had 3-5+ accounts versus just 1, but after looking at the FICO scoring percentages it seems that only the type of credit matters, not how many accounts of a specific type you have.  If my thinking is correct, if I were to get a new BofA card, it would lower my average credit account age, lower my score from a new inquiry, and also lower it because of a new account opening?  Granted, after a couple years it would all level out again, and I'd have built relationships with two major banks on which to grow too.

Like SCF said, having a higher limit on my existing WF secured would probably be a big help since right now it's quite low and easy to run the balance > 10% utilization.

Ulan:  Have you only had the one CC on your history or also car loans, mortgages, etc.?

Thanks for all the information so far.  I've learned a lot browsing both this and the rebuilding credit topics.

[Anonymous]

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@vonmannstein wrote:

Ulan:  Have you only had the one CC on your history or also car loans, mortgages, etc.?

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The WF credit card was the only entry in my credit report. I did not have any other types of credit, but no baddies, either. ScoreWatch mentioned the low age of my credit history, the low average age of my accounts and the low number of accounts as reasons why my EQ score was only at 749.

[Brusilov]

Well I contacted Wells Fargo and they mailed me some forms for increasing my credit limit (increments of $100).  I'm thinking i'll probably boost it to $1000.  From what I gather in other posts, what I've put into a secured account will eventually be my credit limit once it gradutes + a slight increase?

I do prefer the idea of just building credit on the one card versus having to worry about timing 3-4 other card payments, let alone having to pay $20-30 annual fees for them all.

Does increasing available credit amount in itself raise your score at all?  Or is it purely utilization that helps?

Also, if I were to get a BoA or HSBC or whatever other secured account, does having such an account increase your chances for applying for future cards through the same bank?  Or are they all pretty objective and judge purely on your credit score and history?

[SCF]

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@vonmannstein wrote:
Does increasing available credit amount in itself raise your score at all?  Or is it purely utilization that helps? No, a higher CL won't raise your score in itself, utilization is what affects your score.

Also, if I were to get a BoA or HSBC or whatever other secured account, does having such an account increase your chances for applying for future cards through the same bank?  Or are they all pretty objective and judge purely on your credit score and history? I think this is a YMMV type of question, but with BoA at least, once the secured card unsecures and you continue to treat it well, you should be able to product change to most (if not all) of their other cards, meaning that you will eventually wind up with access to their entire selection without having to make a new app.

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Good luck with your credit vonMannstein, I think you've done the most important thing, which is to find a way to improve your credit that works for you, keep us updated on how things go!

[Brusilov]

On their website the terms for graduation say a credit score of at least 600 to be considered, as well as making payments on time for 12 months.  I'm hoping with my scores just passing 600 right now, i'll be in the 650-ish range by the time the year is up and I'll be in a decent position to request unsecured. 

For those that have had the WF secured card, is graduation automatic?  Or did you have to call at WF rep and request it?

[Anonymous]

I didn't have the secured variant, but just in case there won't be any answer, I will state the following:

Wells Fargo usually does things on its own. They will give you CLI's and exchange cards as they see fit. They might have a similar approach to unsecuring cards, but maybe someone else knows for sure.

[score_building]

WF can sometimes be a difficult issuer to deal with, they are not the most customer friendly in general and i would not be willing to rely on them as my solitary source of revolving credit.  IMHO boa overall is more reliable and generous and would provide you with a back up if in fact WF becomes unpalatable to you for any reason. 

 i understand you may not need or want half a dozen cards but if you can keep track of one you can keep track of two.  i think it would serve you well to diversify, at least including one other issuer to balance things off.  most report a score increase upon the addition of a second revolver in any case.