Secured credit card? I have bad credit

[BJones99]

Hi. I have multiple charge-offs on my credit reports. My credit has been derogatory since summer 2018. I have a little over 2 years remaining before all the negative items will completely be removed from my credit reports.

 

I would like to know whether I should apply for a secured credit like Opensky now or if I should apply for an unsecured credit card such as Credit One. Or, should I apply for both types. My goal is to rebuild my credit and start out by building new credit history with some "rebuilding" credit cards types.

 

Thank you for your assistance here.

[MarvBear]

Welcome to CreditBoards. 

[shifter]

Neither. You want to get a secured card that will graduate like Discover or Capital One. It sounds like you have no open cards right now so you'll likely have to start secured. 

[BJones99]

11 hours ago, MarvBear said:

Welcome to CreditBoards. 

Thank you!

[BJones99]

9 hours ago, shifter said:

Neither. You want to get a secured card that will graduate like Discover or Capital One. It sounds like you have no open cards right now so you'll likely have to start secured. 

Thank you. Capital One is one of the accounts that have a charge-off with. It sounds like the graduating cards are the way to go then. I read some threads here about SDFCU, Citibank, and DCU secured credit cards as well. My FICO score is 520 at the moment. I am a member with DCU for quite some time now.

 

I will apply for Discover. Which other secured credit cards should I apply for?

[shifter]

See if you get in with Disco. I don't recall if SDFCU or DCU graduates. If you have no open credit, your FICO should see a decent bump once an open account shows. 

 

C1 is very forgiving in most cases. If you can get in with Disco, maybe give it 6 months of reporting and then try for a C1 unsecured card like QS1. 

[BJones99]

3 hours ago, shifter said:

See if you get in with Disco. I don't recall if SDFCU or DCU graduates. If you have no open credit, your FICO should see a decent bump once an open account shows. 

 

C1 is very forgiving in most cases. If you can get in with Disco, maybe give it 6 months of reporting and then try for a C1 unsecured card like QS1. 

I just completed the Discover pre-approval form to see if I would get approved for anything, including a secured credit card. I forgot to unfreeze my credit reports and it was declined only on the fact that my Experian credit report was frozen. They said I can try back in 8 days. So, I'll try it again towards the end of next week.

 

I'll call DCU and ask if their secured credit card graduates.

 

Thank you again for your assistance.

[cashnocredit]

I also had bad credit. Collection accounts and paid tax lien. No lines of credit at all. Positive nor negative.

 

I opened a Wells Fargo Secured card and a few months later a Citi secured card. both unsecured and returned my deposit about a year later. And both removed any indication on my credit reports that their cards had ever been secured. Within a year all the baddies fell off and I've since got high end cards and have charged as much as 60k in a month though I normally run under 5k-10k/mo.

 

Highly recommend secured cards that unsecure and stay away from the low CL fee reapers crap cards.

[jonson]

On 1/24/2023 at 9:22 AM, shifter said:

See if you get in with Disco. I don't recall if SDFCU or DCU graduates. If you have no open credit, your FICO should see a decent bump once an open account shows. 

 

C1 is very forgiving in most cases. If you can get in with Disco, maybe give it 6 months of reporting and then try for a C1 unsecured card like QS1. 

 

SDFCU does graduate, and it’s pretty easy to be approved for.  Mine automatically graduated at 1-year.  

[BJones99]

On 1/27/2023 at 6:07 PM, cashnocredit said:

I also had bad credit. Collection accounts and paid tax lien. No lines of credit at all. Positive nor negative.

 

I opened a Wells Fargo Secured card and a few months later a Citi secured card. both unsecured and returned my deposit about a year later. And both removed any indication on my credit reports that their cards had ever been secured. Within a year all the baddies fell off and I've since got high end cards and have charged as much as 60k in a month though I normally run under 5k-10k/mo.

 

Highly recommend secured cards that unsecure and stay away from the low CL fee reapers crap cards.

Thank you for this. I will try Discover and Citi.

[BJones99]

13 hours ago, jonson said:

 

SDFCU does graduate, and it’s pretty easy to be approved for.  Mine automatically graduated at 1-year.  

Thanks. Does SDFCU have a maximum limit on their credit cards? If so, what is it?

[shifter]

38 minutes ago, BJones99 said:

Thanks. Does SDFCU have a maximum limit on their credit cards? If so, what is it?

Theoretically unlimited, and I believe @cashnocredit had one at $25k or something. 

[BJones99]

1 hour ago, shifter said:

Theoretically unlimited, and I believe @cashnocredit had one at $25k or something. 

Thank you.

[BJones99]

On 1/24/2023 at 1:46 PM, BJones99 said:

I just completed the Discover pre-approval form to see if I would get approved for anything, including a secured credit card. I forgot to unfreeze my credit reports and it was declined only on the fact that my Experian credit report was frozen. They said I can try back in 8 days. So, I'll try it again towards the end of next week.

 

I'll call DCU and ask if their secured credit card graduates.

 

Thank you again for your assistance.

I just got off the phone with DCU. Their secured cards do not "graduate" or convert to an unsecured credit card. The girl told me that after approximately one year or so, DCU will return your initial deposit of the secured card. She said if your goal is to have a real unsecured credit card, you'll have to apply for one separately.

 

I guess the best secured card players are Cap 1, Citi, SDFCU, and Discover for now.

[hdporter]

10 minutes ago, BJones99 said:

The girl told me that after approximately one year or so, DCU will return your initial deposit of the secured card.

 

That's a bit of a "head scratcher".  If you have a secured card and they return your security deposit, WTF is the card now if not "unsecured" (i.e. graduated).

 

What she may be suggesting is that they don't allow you to convert the card to one of their more attractive standard card products, so that you're stuck with an unsecured card with limited benefits.  All things concerned, as long as it puts an unsecured card in your wallet, that's not so terrible.  (And, frankly, DCU doesn't have any "attractive" cards I would recommend.)

 

It's discussed that it's best if you can start with 2 or 3 accounts to rebuild with (but not more than that).  Because of the paucity of DCU's overall card inventory, I'd put them fairly low on the list of options.  (I would suggest Citi should be at or near the top of that list, given that ultimately Citi Double Cash is a nice card to ultimately be packing in your wallet.)

 

But don't dismiss DCU entirely.  Again, you're going for 2-3 cards now.  Depending on your success with apps, you want to keep DCU as a back up option.

[jonson]

9 hours ago, BJones99 said:

Thanks. Does SDFCU have a maximum limit on their credit cards? If so, what is it?

 

They don't list a maximum, so I believe the sky is the limit.

[hoapres]

If you have the funds then try to get a secured credit card with the highest possible limit.  Opensky top limit is $3K. Capital One top limit is $1K. 

[BJones99]

10 hours ago, hoapres said:

If you have the funds then try to get a secured credit card with the highest possible limit.  Opensky top limit is $3K. Capital One top limit is $1K. 

Opensky says $2K or $3K on their website but when you call them, they will tell you $5K over the phone. I wouldn't get Opensky because you cannot convert it to an unsecured card.

 

Do you know what Citi's max limit is on the secured card?

[shifter]

I'd open the Disco ASAP with $2500 if you can. It will grow with you throughout your rebuild. I did this around 2018 I think and now this card has a $12.3k CL. Could have grown quicker if I had actually used it before last year. 

[BJones99]

Does Citi and Discover allow for additional deposits into the secured card at later times to increase the credit limit?

[shifter]

Don't think so with Disco. 

[shifter]

Are you collecting information for an article or are you going to open an account? Lol... 

[BJones99]

7 minutes ago, shifter said:

Are you collecting information for an article or are you going to open an account? Lol... 

LOL. No, I am going to open an account. I just want to make sure that I do this correctly so that I don't close and open accounts on my credit profile. I have one bite at this and want to do it properly.

[shifter]

I wouldn't stress about it. Closing and opening accounts doesn't matter. The goal is to get a good card ASAP that will grow with you forever. Disco is a very good place to start. Then you can also look at adding another if funds allow and SDFCU is good, but I don't see that as a long term card. Once your rebuild is complete, you'll likely have no need for that one. 

[BJones99]

1 hour ago, shifter said:

I wouldn't stress about it. Closing and opening accounts doesn't matter. The goal is to get a good card ASAP that will grow with you forever. Disco is a very good place to start. Then you can also look at adding another if funds allow and SDFCU is good, but I don't see that as a long term card. Once your rebuild is complete, you'll likely have no need for that one. 

Thank you Shifter. Well, I tried. I just applied for a secured Citi MasterCard and was declined. I requested the maximum amount, $2,500 as my credit limit. I got an instant decision with a denial.

 

"

Unfortunately, we were not able to approve your application.

You will receive details regarding our decision via email or via written notification in approximately 7-10 days. For additional details, please contact 1-866-441-7409. 

Because only certain notices will be sent by email, you will also need to check the U.S. mail for communications about your application."

 

I am actually speechless and pessimistic about the credit rebuilding now because I didn't even get approved for the secured card that I really wanted.