Hello and thank you for your help and advice! Well some years ago, I had a pretty bad credit situation. I was a 480, but am now somewhere about 660 (TU from myfico.com). Not good but just starting to try and correct this situation. So, I applied for that secured Cap One card and have the measly $200 credit line. But, after just some months of good payment history, my FICO seems to have picked up a bit. I know that some part of the score is the utilization ratio of your credit card balances to credit limits as listed on your credit report. It would seem to be beneficial to increase the total line of credit, right? If I were to add $1000, would it be best to add it to the amount on the Cap One card, or open a second account with that Orchard Bank card and just add it to the initial deposit on that second card? Or is there any other card that I might qualify for better than those cards? I am serious about paying off my balance every month and establishing good history.
Also, I am wondering if the utilization ratio is considered only as a percentage or does it factor the total amount of credit. For example: If I have $0 balance on the $200 Cap One card.... is that considered the same as having a $0 balance on a total available credit of say... $20,000. What I'm asking is does it only look at the percentage or does it also look at the total available in terms of a larger amount of credit? I hope you understand what I'm asking...
Welcome to Creditnet, and congrats on improving your scores over the past few years! Regarding credit utilization, what matters is your percentage, not the actual credit limit. Ideally, you want to keep your CU ratio at 10% or less. Now that you have your FICO scores up around 650, have you checked out any of the credit cards for fair credit? The Capital One Cash Rewards Card, for example, might be a good option for you. It has an annual fee of $39, but the amount of cash back you'll earn can more than pay for the annual fee if you spend a little more than $200 per month on the card.
My sister in law also has a $200 secured card with CapOne and after about six month of using the card responsibly she apply for a CapOne Platinum and was given a $2000 limit. I would take Josh's suggestion and apply for a card that has rewards. You can also add yourself as an authorized user to one of your family member or friends existing credit card accounts to help with your overall utilization. Just make sure it has perfect payment history on the card and they can maintain a low balance (10% or less of the credit limit). This will also give you a boost in your credit score. Thanks! Heather with BoostMyScore.NET
Thanks for the replies guys! Can you recommend any particular cards that I might qualify for? There just seems to be so many I'm lost as to which to apply with... I assume the Venture One card would still be out of my league right? A card with a reward program would be a plus. Especially airline miles. JetBlue services everywhere I go often but I don't think I could qualify for it either... Any recommendations? Thank you for taking the time to be so helpful!
Yes, the Capital One Venture Card will still be out of your league. As I mentioned below, the Capital One Cash Rewards Card is definitely the best rewards credit card right now for those with fair credit. Remember that if you apply through Creditnet's link you'll be helping to support our site and this forum too . Also, you'll need to get your FICO scores higher (at least in the low 700s) before you can start looking into airline miles credit cards with big sign-up bonuses.
UPDATE: Well, I applied for the Capital One Cash Rewards card and was instantly declined. Credit Karma suggested the card and said there was a Fair or Good chance I would be approved. So... there's a hard pull. Furthermore, I applied for the Chase Freedom card. It was also declined. I even called for a reconsideration and was still declined. Are my only options now the Orchard Bank secured card? I would just really like to show two accounts in good history. I plan to apply for a mortgage next year so am looking to build as much as possible and I don't think a $200 line of credit on a Cap One secured card will do it. Frustrated... any advice? Just go with the Orchard card and maybe deposit $1000 to increase the credit line and availability?
Sorry to hear about the declinations. Based on the TU-based FICO score you mentioned, the Chase Freedom card was definitely out of your league. However, the Capital One Cash Rewards card was worth a shot. I would wait a bit now before applying for another card. Stick with the Cap One Secured Card and bump up your credit limit as much as possible. Then keep building positive payment history, keeping your credit utilization ratio as low as possible, and your FiCO scores should continue to rise. FYI- the Orchard Bank card is getting pulled from the market and will most likely go away for good very soon. Capital One will probably launch a new card in its place now that they've taken over.
Since you have already applied for a CapOne card, try applying for a CapOne Platinum card. It does not have any rewards but my sister in law applied for one after using her $200 CapOne secured card for 6 months and was approved for a limit of $2000 on the CapOne Platinum card. She applied online but may you can call in and they can use same credit pull from your previous application, so you won't have another inquiry. Thanks! Heather with BoostMyScore.NET
Should should I maybe get the Orchard card then since it's being pulled, before it does. Or, will they close all the accounts when they do pull the card from the market. It's about the only other option I have, that or a credit union secured card. Maybe I will call in and ask about applying for it from the other inquiry. Because if I applied in the standard way, wouldn't that be another hard pull from them from all 3 bureaus? Thanks again. I'm a little bummed about the setback in my score from the apps, even though I don't know how much it brought me back. Thank you for all for your help though and if you have any other advice I'm all ears!
The Orchard Bank cards are getting yanked tomorrow. Nothing will happen to existing cardholders for now, but I think it's safe to say those cards will eventually become Capital One cards now that they bought the business. If you want one, you should apply today. You might also want to check out the Credit One Platinum Visa Card too. The annual fee is steeper at $99, but it's the only other option in the unsecured credit card space.
