news
03-30-2016, 07:13 PM
by Anisha Sekar
Being*denied for a secured credit card (http://www.nerdwallet.com/blog/top-credit-cards/nerdwallets-best-secured-credit-cards/) can come as a surprise. After all, you're putting down a security deposit to protect the card issuer in case you don't make your*payments. Shouldn't that mean approval is guaranteed?
It's not so simple. You still have to apply for a secured credit card. In most cases, the credit card issuer will still check*your credit. You may not get approved if you have a bankruptcy on your record, a history of missed payments or other red flags.
But don't give up hope yet. You can still rehabilitate your bad credit and get approved for a credit card. Several*alternatives to secured cards will still build your credit.
Why were you denied for a secured card?
If you are denied credit, you have a legal right to know exactly why. Is it because you recently declared bankruptcy? Do you have a history of missed payments? Ask*the credit card issuer*why it denied your application. If a lender*denies you credit based on information from a credit report, you're entitled to a free copy of that*report. (The issuer should tell you how to get it.) And if the denial stemmed from an error on the credit report, it may be worth disputing the error (https://www.nerdwallet.com/blog/finance/long-fix-error-credit-report/).
Consider your bank or a credit union
If you have a checking account, you might find it easier to qualify for a secured credit card with the bank where you've already built a relationship. Rather than apply for a secured card from a new bank, go to*your current bank in person (if possible) and ask about its*secured credit card offerings.
Alternatively, you may want to check out your local credit union. Credit unions are nonprofit organizations and often*have more affordable products than big, for-profit banks do. Community development credit unions in particular are great for helping you rebuild credit.
If you still can't get a secured card
Each credit card application reduces your credit score slightly, so it's not a good idea to keep applying for more cards if you're likely to be*denied. If*you've tried and failed to get*a secured credit card, we suggest you consider another type of loan.
It's vital that you build up your credit score, so the alternative to a secured card should:
Extend you a line of credit.
Report your on-time payments to the credit bureaus.
The following products can*help you raise your FICO score and eventually "graduate" to good credit cards. Other options, such as*prepaid debit cards, do not report to the credit bureaus, so don't bother with those if your main goal is to rebuild your credit.
Here are some alternatives to secured credit cards:
Share-secured*loans from credit unions.*These are basically like secured credit cards. You deposit your money into a savings account, then borrow against that money. Because there's no risk to the lender, you get a low interest rate, but it still helps build credit. Here are a couple of options:
University Federal Credit Union (https://www.ufcu.org/personal/loans/personal).*You can*join with a $20 donation to the University of Texas.
State Department Federal Credit Union (https://www.sdfcu.org/personal-loans). Members*of*the American Consumer Council (https://www.americanconsumercouncil.org/membership.asp?dname=Americanconsumercouncil.org)* are*eligible to join. A lifetime membership is just*$15.
Credit builder loans from credit unions.*These loans are meant for people looking to build up their credit, and usually range from $200 to $1,000. Check your local credit union to see what's offered.
No-credit-check secured cards.*This can be an expensive option if you want a secured credit card. The*[nw:card_name 1803] (http://www.nerdwallet.com/card-details/card-name/Open-Sky-Secured-Visa)*has no credit check, but still reports to the major credit bureaus. Its [nw:annual_fee 1803]. This can be a decent option if you've previously been denied a secured card, but have the money to post the security deposit.
Even though you've been denied for a secured credit card, don't give up hope just yet. You can still build up your credit and get on the path to financial fitness.
More from NerdWallet:
How do secured credit cards work? (https://www.nerdwallet.com/blog/credit-cards/how-secured-credit-cards-work/)
NerdWallet's best secured credit cards (http://www.nerdwallet.com/blog/top-credit-cards/nerdwallets-best-secured-credit-cards/)
How to get an*unsecured personal loan (http://www.nerdwallet.com/blog/finance/2013/cheap-personal-loans/)
This story originally appeared on NerdWallet (http://www.nerdwallet.com/blog/credit-cards/denied-secured-credit-card/). -- This feed and its contents are the property of The Huffington Post, and use is subject to our terms. (http://start.westnet.ca/newstempch.php?article=terms.html/) It may be used for personal consumption, but may not be distributed on a website.
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Being*denied for a secured credit card (http://www.nerdwallet.com/blog/top-credit-cards/nerdwallets-best-secured-credit-cards/) can come as a surprise. After all, you're putting down a security deposit to protect the card issuer in case you don't make your*payments. Shouldn't that mean approval is guaranteed?
It's not so simple. You still have to apply for a secured credit card. In most cases, the credit card issuer will still check*your credit. You may not get approved if you have a bankruptcy on your record, a history of missed payments or other red flags.
But don't give up hope yet. You can still rehabilitate your bad credit and get approved for a credit card. Several*alternatives to secured cards will still build your credit.
Why were you denied for a secured card?
If you are denied credit, you have a legal right to know exactly why. Is it because you recently declared bankruptcy? Do you have a history of missed payments? Ask*the credit card issuer*why it denied your application. If a lender*denies you credit based on information from a credit report, you're entitled to a free copy of that*report. (The issuer should tell you how to get it.) And if the denial stemmed from an error on the credit report, it may be worth disputing the error (https://www.nerdwallet.com/blog/finance/long-fix-error-credit-report/).
Consider your bank or a credit union
If you have a checking account, you might find it easier to qualify for a secured credit card with the bank where you've already built a relationship. Rather than apply for a secured card from a new bank, go to*your current bank in person (if possible) and ask about its*secured credit card offerings.
Alternatively, you may want to check out your local credit union. Credit unions are nonprofit organizations and often*have more affordable products than big, for-profit banks do. Community development credit unions in particular are great for helping you rebuild credit.
If you still can't get a secured card
Each credit card application reduces your credit score slightly, so it's not a good idea to keep applying for more cards if you're likely to be*denied. If*you've tried and failed to get*a secured credit card, we suggest you consider another type of loan.
It's vital that you build up your credit score, so the alternative to a secured card should:
Extend you a line of credit.
Report your on-time payments to the credit bureaus.
The following products can*help you raise your FICO score and eventually "graduate" to good credit cards. Other options, such as*prepaid debit cards, do not report to the credit bureaus, so don't bother with those if your main goal is to rebuild your credit.
Here are some alternatives to secured credit cards:
Share-secured*loans from credit unions.*These are basically like secured credit cards. You deposit your money into a savings account, then borrow against that money. Because there's no risk to the lender, you get a low interest rate, but it still helps build credit. Here are a couple of options:
University Federal Credit Union (https://www.ufcu.org/personal/loans/personal).*You can*join with a $20 donation to the University of Texas.
State Department Federal Credit Union (https://www.sdfcu.org/personal-loans). Members*of*the American Consumer Council (https://www.americanconsumercouncil.org/membership.asp?dname=Americanconsumercouncil.org)* are*eligible to join. A lifetime membership is just*$15.
Credit builder loans from credit unions.*These loans are meant for people looking to build up their credit, and usually range from $200 to $1,000. Check your local credit union to see what's offered.
No-credit-check secured cards.*This can be an expensive option if you want a secured credit card. The*[nw:card_name 1803] (http://www.nerdwallet.com/card-details/card-name/Open-Sky-Secured-Visa)*has no credit check, but still reports to the major credit bureaus. Its [nw:annual_fee 1803]. This can be a decent option if you've previously been denied a secured card, but have the money to post the security deposit.
Even though you've been denied for a secured credit card, don't give up hope just yet. You can still build up your credit and get on the path to financial fitness.
More from NerdWallet:
How do secured credit cards work? (https://www.nerdwallet.com/blog/credit-cards/how-secured-credit-cards-work/)
NerdWallet's best secured credit cards (http://www.nerdwallet.com/blog/top-credit-cards/nerdwallets-best-secured-credit-cards/)
How to get an*unsecured personal loan (http://www.nerdwallet.com/blog/finance/2013/cheap-personal-loans/)
This story originally appeared on NerdWallet (http://www.nerdwallet.com/blog/credit-cards/denied-secured-credit-card/). -- This feed and its contents are the property of The Huffington Post, and use is subject to our terms. (http://start.westnet.ca/newstempch.php?article=terms.html/) It may be used for personal consumption, but may not be distributed on a website.
http://rc.feedsportal.com/r/247396327245/u/0/f/677045/c/35496/s/4e9ca890/sc/28/rc/1/rc.img (http://rc.feedsportal.com/r/247396327245/u/0/f/677045/c/35496/s/4e9ca890/sc/28/rc/1/rc.htm)
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