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Question By
MichaelintheLBC

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946 People Helped
Is it possible to be "not approved" for a Secured Credit Card?
I currently have 3 accounts "in-collections". However, one is unverified, and I am in the process of removing that line. And, I am working with the remaining two to "settle" the accounts. All of these account are fairly old, due to fall off within 1-2 years.

I am doing my best to improve my credit score. So, I want to open a secured credit card to help boost my score, while I'm in the process of removing my "in-collection" items. Am I likely to be approved, if my other accounts are up to date, my current credit utilization is less than 20%, my debt to income ratio is low (approx. 31%) and is primarily due to student loans, and I have no hard inquiries? I don't want to waste a "hard inquiry" if those 3 "in-collection" accounts will give me a quick denial of credit.

I'm pushing for improving my credit score, because I'm trying to move, as soon as possible (and, I need a better credit score to be approved). I could also use the credit to help me with some auto repairs.

Any advice is appreciated. Thank you in advance!

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Contact your banker.

Helpful to 1 out of 1 people

make a trip into your local branch, A Face to Face chat usually works better. so Speak to the new accounts manager personally.  Explain what it is that you are doing to improve your credit scopre. It takes a savings account equal to the amount of credit on the card so if you already have a savings account they may be able to use that, If not you will need to open a new account to attach the secured card to.  They are ususally in the $300 to $500. range so have that amount available at the time you talk to them either in your account ot available to open a new account. 

Good luck

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Reply by
MichaelintheLBC

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946 People Helped

Thank you for your response.  I'll have to let you know how it goes.

Top Contributor
16 Contributions
946 People Helped

Approved

It's a been a little over a year since posting this question.  I was approved for a secured credit card through USAA.  I'm not sure if it's possible not to be approved for a secured credit card, but in my case even with my past charge-off's and their associated in-collection accounts, I was able to get approval.

Since posting this question, my credit score has increased significantly by 50+ points.  I've closed all of my in-collection accounts, either by paying (1), allowing to drop off (1), or having removed (1).  All of my accounts (loans, credit cards, etc.) are up to date, and I have not missed any payments.  Based on my current no. of accounts and not missing any payments, my on-time payment history should be at a good rating (~99%) within the next year.  And, opening the secured card through USAA helped me establish a good repertoire that allowed me to take out an auto loan with them, albeit with a higher than average APR.

Without getting too side tracked, I'm very pleased with my results in just one year.  My credit score has steadily improved, enough that creditors are offering me credit/ loans instead of turning me down.  And more importantly, I was able to move to the apartment property that I wanted.  My credit isn't perfect, but it's certainly improving.  For anyone reading this, it is possible - just be patient.

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