- Centurion Member
- Posts: 125
- Joined: Wed Dec 05, 2012 12:47 pm
- Location: Iowa
Most of the secured cards from the better issuers, Cap1, WF, BofA, U.S. Bank, etc. will do a hard pull, this is mostly to see that you haven't had a recent bankruptcy. If I were to guess, I would say you have fairly decent credit but want to give it a bump for lower interest rates and you don't want inquiries on your credit report. The bad part about lenders like Applied Bank or First Progress, they don't look good on a credit report. When an account from a place like Open Sky comes up on your report, potential lenders may look at that like you had to do business with a high risk lender. Also, if you read the fine print, these cards are riddled with fees, open Sky charges 22% interest and there is no grace period for purchases, so you pay interest from day 1.
I have a couple of friends who have been through this, here's what their local banker to them. For best results, have credit in your name. You can apply for 1 or 2 cards, just make sure you apply for something you qualify for, Cap1 has a cash rewards card for fair credit. Having 2 recent cards on your report doesn't hurt as bad as opening 15 when you've never used credit before. It's mostly when you apply for a home loan, they want to know that you won't go on a spending spree and get yourself $20,000 in debt after getting your loan. One card with say a $1,200 credit limit that you've had for 6 months won't hurt like if you went and applied for a store card from every store you shop at in the same day.
I've been doing some reading on secured cards and the best advice I've found is to get something from places like US Bank or BofA that will unsecure after a period of paying on time. These places will notify you that you can get your deposit back and have a regular card. With places like Cap1, wait a year or so check your credit score then try to apply for something else. What I've been told, if you've had a secured card for about a year, it's time to see if you qualify for something else.
From what I looked into, you might want to consider a small personal loan before applying for a credit card. Some banks would even let you do a secured loan for building credit, but the idea is to borrow $1,000 to $2,000 but don't spend the money, open a new account or even a CD at another bank. You want to hang onto this money in case you need it to pay back the loan, but keep it in a safe place. Now make monthly payments for a year then pay off the loan. By now your credit should have seen a huge boost and you'll look good to the bank that loaned you the money.