Upgrade Secured Credit Card To Unsecured?

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nc9844
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Upgrade Secured Credit Card To Unsecured?

Postby nc9844 » Fri Mar 16, 2012 12:41 pm

Hello everyone,

This is my first post...I just discovered this forum a few days ago out of a bit of desperation.

I'm 22 years old, and I need an unsecured credit card to build my credit score. I'm pretty much alone in this daunting task, since nobody really helped me step-by-step.

I need a credit score so I can get the ball rolling on things I wish to do: rent my own apartment, buy my own car, apply for an SBA loan with my approved business plan (they ask for a credit score of at least 700, but hey, I have to start somewhere), open business account(s), etc etc...these all request a decent credit score. I have BIG ideas, but it seems like meeting them is so far away...

My current situation: I have had a secured BankAmericard Visa since April (11 months ago), using it each month, never going over my credit limit and always paying in full on time. I already applied to upgrade to a unsecured credit card, and was denied because of an "insufficient number of revolving credit accounts", whatever that means.

I also have been: working at my current employer for 12 months now; and living in the same town for 3 years.

My solution:

  1. I read in another website to apply for a Capital One CC and set up an arranged overdraft with the bank. Use it for a year, then toss the Capital One CC after applying for an unsecured CC (since apparently the CO CC is "crap"?).
  2. I've been told that there is a 2x2x2 rule when it comes to getting an unsecured credit card:

  • 2+years working for the same company/boss
  • 2+years at the same address
  • 2+years of good bill payment history.
Any advice would be greatly appreciated. Thanks in advance!


Celestine
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Postby Celestine » Sat Mar 17, 2012 1:50 am

nc9844 wrote:Hello everyone,

This is my first post...I just discovered this forum a few days ago out of a bit of desperation.

I'm 22 years old, and I need an unsecured credit card to build my credit score. I'm pretty much alone in this daunting task, since nobody really helped me step-by-step.

I need a credit score so I can get the ball rolling on things I wish to do: rent my own apartment, buy my own car, apply for an SBA loan with my approved business plan (they ask for a credit score of at least 700, but hey, I have to start somewhere), open business account(s), etc etc...these all request a decent credit score. I have BIG ideas, but it seems like meeting them is so far away...

My current situation: I have had a secured BankAmericard Visa since April (11 months ago), using it each month, never going over my credit limit and always paying in full on time. I already applied to upgrade to a unsecured credit card, and was denied because of an "insufficient number of revolving credit accounts", whatever that means.

I also have been: working at my current employer for 12 months now; and living in the same town for 3 years.

My solution:

  1. I read in another website to apply for a Capital One CC and set up an arranged overdraft with the bank. Use it for a year, then toss the Capital One CC after applying for an unsecured CC (since apparently the CO CC is "crap"?).
  2. I've been told that there is a 2x2x2 rule when it comes to getting an unsecured credit card:

  • 2+years working for the same company/boss
  • 2+years at the same address
  • 2+years of good bill payment history.
Any advice would be greatly appreciated. Thanks in advance!


You don't need an unsecured credit card to build your credit. In fact, secured credit cards are used to build credit and or rebuild credit.

Getting denied for an unsecured credit card for the reason "insufficient number of revolving credit accounts" is normal for people who are starting out. By the way, having 11 months of credit from zero credit history is still considered as young.

People considers secured credit cards as a "bad" card since it does not offer rewards or points. And people will tell you to close the secured credit card account. In my experience, having a secured credit card, in addition to my unsecured credit cards and charge card, helped me build my credit history. Secure credit cards are handy tools even if you already have a good credit score and history.

You made a mistake when you tossed your Capital One CC. I'm assuming you closed that account. Closing that Capital One CC account made you lose your revolving credit accounts. Instead of having two revolving accounts, which could have helped you by now if you only kept it open, now you only have your secured BankAmericard Visa; reducing your revolving accounts from two to one.

One rule of thumb, don't bite more than you can chew. I don't mean to make you feel bad but if you can't even manage your own finances, then it is better not to open your own business. That is, until you learn how to manage your personal finances. Those things you mentioned you want to spend money on does not rely solely on your credit score. It will also rely on the amount of money you have in your bank account. For buying a car, know your credit score and make sure you have enough money for the living expenses and car payments, gasoline, and car insurance. If you don't have enough of those, then better not buy a car.
"Nearly all men can handle adversity, but if you really want to test a man's character - give him power." - Abraham Lincoln

JoeyJon
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Postby JoeyJon » Sat Mar 17, 2012 11:38 am

Hi,

I had no credit cards and a credit score in the mid-500s.

I applied for the Capital One Journey card. It is a student credit card. Although I am legitimately in school, they never asked what school or verified I was telling the truth. I was approved right over the internet.

Maybe they would approve you.

With that credit card they enroll you for free on a website that gives you your credit score and explains how to improve your credit step by step.

Celestine
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Postby Celestine » Sat Mar 17, 2012 1:59 pm

JoeyJon wrote:Hi,

I had no credit cards and a credit score in the mid-500s.

I applied for the Capital One Journey card. It is a student credit card. Although I am legitimately in school, they never asked what school or verified I was telling the truth. I was approved right over the internet.

Maybe they would approve you.

With that credit card they enroll you for free on a website that gives you your credit score and explains how to improve your credit step by step.


Capital One Journey card is for students only. According to Capital One's website, it is intended for people with young/limited credit history.

According also to Capital One, they check and verify whether you are going to school/student using your SSN.
"Nearly all men can handle adversity, but if you really want to test a man's character - give him power." - Abraham Lincoln

nc9844
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Postby nc9844 » Sat Mar 17, 2012 2:43 pm

Celestine wrote: You made a mistake when you tossed your Capital One CC.


First off, thanks for the reply! I didn't mean to make it sound like I had gotten a Capital One CC. By you saying that having the Capital One CC along with my BankAmericard CC, I could have a better/faster/more efficient chance of being approved for an Unsecured CC. I believe that is what you're saying.

nc9844
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Postby nc9844 » Sat Mar 17, 2012 2:44 pm

JoeyJon wrote:Hi,

I had no credit cards and a credit score in the mid-500s.

I applied for the Capital One Journey card. It is a student credit card. Although I am legitimately in school, they never asked what school or verified I was telling the truth. I was approved right over the internet.

Maybe they would approve you.


That's a wonderful idea...I am still in school, so when applying for a 2nd credit card, I suppose that 2nd should be this one.

randeman
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Postby randeman » Mon Mar 19, 2012 8:14 pm

For a newbie, a 700 score will take some time. Not only is your score impacted by your payment history, it is also impacted by how long you have had credit to begin with. Most companies look for people who have had credit for years. They also look at the types of credit that you have, meaning not just credit cards but also mortgages, car loans, etc. I know that you mentioned that you are trying to build credit in order to get credit, but as you have (and will continue) to discover, credit is often a "damned if you, damned if you don't" type situation. A good deal of it makes no sense, but it is what it is.
Cards and Credit lines Acquired:

Escape by Discover (7.75K), Barclay Holland America Visa (7K), Macy's store card (7K), Bloomingdale's store card (2.6K), Citi Custom Credit Line (3.5K), PayPal Smart Connect credit line (2.7K), Chase Freedom Visa (5K), Chase United MileagePlus Visa (5K), Chase Sapphire Preferred Visa (6K), Amazon store card (2.2K), Lord & Taylor store card (550), Nordstrom store card (1500), Gold Delta SkyMiles from American Express (3K), Discover It (6.5K), PayPal Credit Line (1K).

JCarter
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Postby JCarter » Tue Mar 20, 2012 11:52 pm

Celestine wrote:Capital One Journey card is for students only. According to Capital One's website, it is intended for people with young/limited credit history.

According also to Capital One, they check and verify whether you are going to school/student using your SSN.


Apologies for getting off track, but due to FERPA they can't "verify" by SSN without your written consent provided in advance directly to the school.

The only plausible way of verifying enrollment is to hope that the customer has student loans on the credit report, which are active revolving loans.

JCarter
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Postby JCarter » Tue Mar 20, 2012 11:55 pm

Usually banks want you to wait atleast 12 months before trying to convert from secured to unsecured. I would wait 2-3 months, and call BoA and request an underwriter review you for an unsecured card.

Another option is to go ahead and add Capital One's secured credit card and wait 6 months before you attempt to add any other lines of credit.



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