Opening Secured CC effect on score short term

[hippychic823]

Not sure if this goes here or in Rebuilding forum but I am in the process of rebuilding my credit and have several paid CO's and paid CA's. I've attempted PFD'S and GW letters with no success. I know my score won't improve until the baddies fall off which won't be until 2021 so in the meantime I was wanting to open a secured CC so I at least have a positive, revolving tradeline reporting.
I was wanting to open an Open Sky secured CC and was wondering how many points my score would decrease by opening a new account and also, when I could expect to see it begin to increase with positive payment history.
I'm planning on purchasing a newer vehicle later this year and want to know what the short and long term effects of opening this card would do to my score. Currently sitting at the mid 580 mark across all 3 bureaus and would like to get above 600 before purchasing a vehicle.

[Anonymous]

There's no question that, because you have no open credit cards, it would help you a lot to have one, as long as you can keep it reporting each month with a small positive balance.  (E.g. $5 - $10)

Trying to assess exactly how much it will help you is a challenge, even if you had an expert in FICO scoring sitting down with you who was carefully reviewing all three of your reports.  But the good news is that you don't need that.  Whether it boosts your score by 10 points or 100 points, it will certainly help it.  So do it.

Choosing the best secured credit card is a different matter.  I know nothing about Open Sky.  I encourage you to work with people here and get lots of advice about the best choice with an aim to having no fees (monthly, annual, etc.) especially if possible.

Do you have any open installment loans?  If not, there's an additional strategy we can suggest, though you should only consider it after you have improved your score with the CC.

[hippychic823]

I do have an open installment loan, my current car loan which is in good standing but it will be paid off in the next 4 months. I was leaning toward Open Sky because they don't do a HP but they do have an annual fee of $35.

[Anonymous]

Chat with the folks in the rebuilding forum or perhaps the CC forum and continue to get more ideas.  I am not saying anything against Open Sky, since I know very little about all the options.  Just important to have gotten advice from several people and to consider say three different cards with the pros and cons weighed in your mind.

Whatever you choose to do I would do it soon, so that you can obtain the scoring advantage of the card ASAP.  Once you have gotten the score boost there, I would strongly consider opening a Share Secure loan with Alliant and use the full technique of paying it down.  You can find out about it here.  (You only need to read the first 2-3 posts in this thread.)

http://ficoforums.myfico.com/t5/Understanding-FICO-Scoring/Adding-an-installment-loan-the-Share-Secu...

Having the Alliant loan in place and paid down prior to your current auto loan closing will prevent you from losing scoring points when the loan closes.  I would not begin the Alliant process, however, until after you have gotten the score boost from the credit card.

[hippychic823]

Awesome advice on the Shared Secure Loan, I will definitely be looking into that in the next few months!! Thanks so much

[manyquestions]

Another one to look at is the Discover secured card.  I think your score usually goes up with each of the first three cards you open. 

[hippychic823]

I looked into the Discover Secured card, that was actually my first choice since it has the potential to graduate. But, after researching on the forums, it looks like a lot of people get denied for that one, especially people with CO and collections so I'm skittish to app for that one. As low as my scores are I don't want any more Inq's than necessary because I can't afford to lose any points on my score and I'd hate to waste a HP on something that I'd likely be denied for.

[Anonymous]

Wow, really sounds like you are carefully doing your research and thinking about all the pros and cons.  That's the important thing.  Good luck!

[hippychic823]

Lol, yes I'm taking this rebuild and my finances very seriously. My previous ignorance (for lack of a better term) in regards to managing and understanding credit along with some unfortunate life events caused me to be in the shape I'm in now and I'm much more educated and wanting to enter into any credit/finance situations fully informed