Are lenders underwriting secured cards like unsecured cards?

[Anonymous]

Hello all I and a few friends have applied for secured credit cards with Discover, Cap 1, Bank of America and we have all been denied.  We are all in the building phase with a few accounts on our report and no negatives at all but I was under the impression that lenders wouldn't take issue with approving a secured card because we are putting up the money.  Has anyone had any experience with this?

[Slabenstein]

Secured cards do have underwriting criteria, they're just more generous than for uns cards b/c, as you say, you give them collatoral.  In that way, it's like a car loan--there's something backing the loan, but you still have to get approved.  What were the denial reasons that they gave you, and what did your profile and scores look like at the time of denial?

[blindambition]

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@Anonymous wrote:

Hello all I and a few friends have applied for secured credit cards with Discover, Cap 1, Bank of America and we have all been denied.  We are all in the building phase with a few accounts on our report and no negatives at all but I was under the impression that lenders wouldn't take issue with approving a secured card because we are putting up the money.  Has anyone had any experience with this?

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You can't compare profile to friends. Each profile unique to an individual.

How many cards have you opened? What is the timeframe each was opened? How many inquiries?

Even though a secured card has more lenient UW, they don't ignore factors like that.

[Anonymous]

The main denial reasons were too many newly opened accounts and not enough revolving credit history.  The thing is all three of us begin building our files around the same time actually trying out different credit building products.  For example my file I have self lender, credit strong, First Progress, rent reporters, Hutton Chase, Ox publishing and a NFCU secured card on my file and all has been opened for about 6 months.  I tried Cap 1 secured card last week and got denied, I have a bank account with BOA and tried to open a secured card and got denied.  My scores are about 650.

[OmarGB9]

Yes, we'd need more detail on each of your individual profiles. It could also be you simply have no history for them to work with, so they're simply not comfortable. You could try opening a small loan at a CU to start building credit.

[Slabenstein]

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@Anonymous wrote:

The main denial reasons were too many newly opened accounts and not enough revolving credit history.  The thing is all three of us begin building our files around the same time actually trying out different credit building products.  For example my file I have self lender, credit strong, First Progress, rent reporters, Hutton Chase, Ox publishing and a NFCU secured card on my file and all has been opened for about 6 months.  I tried Cap 1 secured card last week and got denied, I have a bank account with BOA and tried to open a secured card and got denied.  My scores are about 650.

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Though there could be something else in your profile that's making them skittish, the first one sounds like a pretty straightforward denial reason for where you're at.  If you opened seven trade lines in six months w/ no previous credit history, you probably need to garden for a while and let those lines gain some age before apping for anything else, secured or not.

[Anonymous]

Yes, every credit file is different but I and my two other friends have similarly built files, for example, we all decided the initial goal was to establish at least about 6 or 7 accounts on our reports and then begin to build relationships with prime lenders & credit unions.  We all have a combination of sub-prime secured cards from either Open Sky, Merrick bank, First progress, Self lender, creditstrong, rental reporters, Hutton Chase, Ox Publishing, Myjewelers all in good standing no negatives, and no more than 3 inquiries per bureau if that and 6 months later I can't even get a secured card with the major banks.  With the only exception is for NFCU they seem to always approve the secured cards as long as you are a member.

[Anonymous]

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@Anonymous wrote:

Yes, every credit file is different but I and my two other friends have similarly built files, for example, we all decided the initial goal was to establish at least about 6 or 7 accounts on our reports and then begin to build relationships with prime lenders & credit unions.  We all have a combination of sub-prime secured cards from either Open Sky, Merrick bank, First progress, Self lender, creditstrong, rental reporters, Hutton Chase, Ox Publishing, Myjewelers all in good standing no negatives, and no more than 3 inquiries per bureau if that and 6 months later I can't even get a secured card with the major banks.  With the only exception is for NFCU they seem to always approve the secured cards as long as you are a member.

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I honestly would slow your roll and build slowly. You do not need to get 7 TLs all at once, it is a red flag for credit seeking. It only takes 3 cards (which can be built upon slowly) and an installment loan - the basic build kit to get good enough history and score to get prime cards.

You do not need a bunch of subprime products to get where you want to go.

I honestly would look into the SSL trick in the forums since you are with NFCU for your installment loan, that is literally the best product around for getting credit mix once amd ditch Self Lender and Credit strong.

You probably dont even need the rental payment reporting to get where you want to go.

MJC is also something I would ditch down the road, as lenders may disregard it since you are literally paying for the credit line

I would keep what you have until they reach a year old and then start closing them down as you slowly get produts to replace them.

Credit is a marathon and not a race. Ignore CMS fluff of you need "X" products or any marketing for pre-approvals.

I would look into pre-approvals directly through creditors instead of just cold-apping to see where you stand in terms of chances of getting in with a lender. I would day you do not need any more secured products, as you have enough where you are, just wait and let what you have age a bit and start working towards better products.

Good luck!

[Anonymous]

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@Anonymous wrote:

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@Anonymous wrote:

Yes, every credit file is different but I and my two other friends have similarly built files, for example, we all decided the initial goal was to establish at least about 6 or 7 accounts on our reports and then begin to build relationships with prime lenders & credit unions.  We all have a combination of sub-prime secured cards from either Open Sky, Merrick bank, First progress, Self lender, creditstrong, rental reporters, Hutton Chase, Ox Publishing, Myjewelers all in good standing no negatives, and no more than 3 inquiries per bureau if that and 6 months later I can't even get a secured card with the major banks.  With the only exception is for NFCU they seem to always approve the secured cards as long as you are a member.

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I honestly would slow your roll and build slowly. You do not need to get 7 TLs all at once, it is a red flag for credit seeking. It only takes 3 cards (which can be built upon slowly) and an installment loan - the basic build kit to get good enough history and score to get prime cards.

You do not need a bunch of subprime products to get where you want to go.

I honestly would look into the SSL trick in the forums since you are with NFCU for your installment loan, that is literally the best product around for getting credit mix once amd ditch Self Lender and Credit strong.

You probably dont even need the rental payment reporting to get where you want to go.

MJC is also something I would ditch down the road, as lenders may disregard it since you are literally paying for the credit line

I would keep what you have until they reach a year old and then start closing them down as you slowly get produts to replace them.

Credit is a marathon and not a race. Ignore CMS fluff of you need "X" products or any marketing for pre-approvals.

I would look into pre-approvals directly through creditors instead of just cold-apping to see where you stand in terms of chances of getting in with a lender. I would day you do not need any more secured products, as you have enough where you are, just wait and let what you have age a bit and start working towards better products.

Good luck!

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You are correct, I honestly didn't want to get MJC and Self or creditstrong because I feel that some lenders would look at it as if I didn't really earn that tradeline since I bought it but with that being said there seems to be a catch 22 because in my experience only the big lenders have denied me with the responses of either too many newly opened accounts, not enough revolving accounts but I seem to not have these issues with some Credit Unions.  Many credit unions tell me with these number of accounts it's not enough and they never seem to have a problem with the accounts being new.  I'm just trying to figure out these big banks but I'm starting to see a pattern, and what you said about the big lenders seems to be accurate. 

[Anonymous]

No more new accounts. Practice AZEO, maintain low reported balance on one card with the others at zero. Dump the paid tradelines, and let everything age beyond a year. Once your youngest remaining account gets past a year, start the prequals with CapOne, Disco, and Amex and see what pops up.