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brusselsprout

Secured credit cards: does a higher limit boost your score better than a low limit?

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A secured credit card's minimum deposit is usually two or three hundred dollars. Is it better for your score if you buy yourself a limit of say $800.00 rather than getting the minimum of two or three hundred? 

 

Is having and responsibly using multiple secured cards better for your score?

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A secured credit card's minimum deposit is usually two or three hundred dollars. Is it better for your score if you buy yourself a limit of say $800.00 rather than getting the minimum of two or three hundred? 

 

Is having and responsibly using multiple secured cards better for your score?

Are you talking about increasing creditline? If yes, each request of credit line from renowned CC companies will see hard pull, which adversely affects your score.

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@brusselsprout ... you asked about secured cards before..  Its a perfectly legal SCAM.   They do not help your FICO new car, mortgage, insurance, etc. scores.  You might get a slight boost in your "sucker" score but...not worth the trouble.

 

If you really need plastic...get a debit card on your checking account.

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Having two credit cards plus one revolving loan seems to give the most improvement.  Secured cards definitely worked for me early in the process, and most definitely helped my FICO score.

 

The amount of the credit limit is most important in terms of the utilization reporting, so you may want to pay the card off just before the statement cuts.  For the best score you want to have no more than 10% utilization reported, with "more than half the cards" at zero balance.

 

Stay away from the predators.  Many credit unions off "credit builder" scenarios.  Say you deposit $1,000.00 into a savings account.  Take out a three year loan of $1000.00.  Now put those loan proceeds into the savings account and use it to get a $1,000.00 secured credit card.

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Look...here are the facts...

 

1.  You have m aany different credit scores.  The ones you get for free are FAKOs...somebody's estimate of your real FICO scores.  Nobody who's going to lend you money looks at those.  Secured cards and loans do increase FACO s...but only because they are fakes.

 

2.  Even FICO calculates many different scores...some for mortgages, some for new cars, some for insurance, etc.  And, they calculate the FICO Bank Card...which is the one consumers are allowed to see.  That's the "sucker" score...the one that CCs use to determine who they will make money on.

 

3.  Secured cards MAY increase your sucker score...but...the other FICO calculations DO KNOW that the cards are secured, and therefore secured cards may actually hurt your other scores.

 

So, if your goal is to get more credit cards, then go ahead and let somebody hold YOUR cash and charge you for the privilege...or, get a debit card on your checking account.  Debit cards won't increase your sucker score...but...they also do not hurt your other FICO scores.

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I applied for a home loan last year and the loan officer who turned me down said that I needed to get secured credit cards. I said I didn't want any credit cards and I asked if I could pay off my smaller old debts instead. The loan officer said that paying off old debt wouldn't help me and that I needed some new accounts that showed that "You know how to pay on time". He said that if I didn't get secured credit cards "You'll be calling me again next year or someone like me" and I'd be turned down again. So I'm going to go with the secured credit cards. It's better than doing nothing...

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I applied for a home loan last year and the loan officer who turned me down said that I needed to get secured credit cards. I said I didn't want any credit cards and I asked if I could pay off my smaller old debts instead. The loan officer said that paying off old debt wouldn't help me and that I needed some new accounts that showed that "You know how to pay on time". He said that if I didn't get secured credit cards "You'll be calling me again next year or someone like me" and I'd be turned down again. So I'm going to go with the secured credit cards. It's better than doing nothing...

 

The one thing a decent secured card does for you is establish a payment history.  I know @willingtocope is entirely against them but I and many others disagree.

 

As long as you avoid the fee harvesting cards (First Premier, Credit One) at ridiculously high interest rates you should be fine.  When I rebuilt after the 2008 recession crash I started with a single Cap1 secured card.  After using that for a year I was able to secure real credit card(s) again and now have a Cap1 Venture Card, AMEX, and Citi with good limits and the secured card is closed at my request with a 2 year good payment history.

 

Keep it just long enough into the 2 year period to not damage your average age of account too much when you close it and to establish a history of managing credit and making payments.  You have to show the ability to do this to get any underwriter to take a look at you for a mortgage.

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