If you are denied for a secured credit card, you could apply for a different secured card (one with a higher approval rate), become an authorized user on someone else’s credit card account, or apply for a credit-builder loan. Some secured credit cards don’t even check your credit when you apply. So you will only be denied if you do not have a U.S. mailing address, a Social Security number (or Individual Taxpayer Identification Number), or enough money to fund your deposit and make monthly payments.
In general, secured credit cards are much easier to get than unsecured cards because they require a refundable deposit that also serves as your credit limit. Because there’s less risk for the issuer, secured cards are able to offer nearly guaranteed approval, even to people with damaged credit. But that doesn’t mean everyone is accepted, and some secured cards are easier to get than others.
Typically, if you’re denied for a secured credit card, the card’s issuer will send you a letter explaining why. That can be a good place to start when determining your next steps.
What to do if you’re denied for a secured credit card:
Apply somewhere else. Just because you didn’t meet one credit card company’s requirements doesn’t necessarily mean you’re disqualified from every secured card on the market. In particular, make sure to check out credit cards with no credit check.
Become an authorized user. If someone adds you to their account as an authorized user, you’ll get a card and be able to make charges, but the primary cardholder will be responsible for paying the bills. And if they pay on time, your credit standing will improve.
Apply for a credit-builder loan. Many credit unions and banks offer small loans to help people build or rebuild their credit. Much like a secured card, you’ll need to make a deposit when you apply for a so-called credit-builder loan.
Focus on your open accounts. If you have a mortgage, student loan, auto loan, or line of credit, making your payments on time will help build up your credit score. That will make it easier to get approved for a credit card.
Why was I denied for a secured credit card?
The most common reasons people are denied for a secured credit card include having a bankruptcy or tax lien on their credit report, not having enough income to meet their monthly obligations, and having an extremely low credit score. Past delinquencies with the issuing bank, current delinquencies anywhere, and invalid application information could all be reasons as well.
The specifics vary by card, though. So, if you were denied for a secured credit card, don’t lose hope. Just apply for one of the several secured cards with no credit check, and manage your account responsibly once you’re approved. You can also sign up for WalletHub’s free credit analysis for additional help getting your credit score back on track.
You can get declined for a secured credit card, just like any other credit card. But it’s a lot less likely because there are fewer requirements to meet, seeing as secured cards are designed for people with limited or bad credit. You will be rejected for a secured credit card if you are not at least 18 years old, don’t have a valid U.S. mailing address, or don’t have enough money for both a security deposit and monthly bill payments. Those standards apply to all secured cards. You also need a Social Security number or tax ID number in most cases. But if you are denied for a secured card, you can try getting a joint credit card or become an authorized user on someone else’s account.
Even with secured credit cards, most issuers still check your credit, and being denied can happen, if you have red flags on your credit report like bankruptcies, or a history of missed payments. This situation can easily be avoided if you apply for a secured credit card with a bank you’ve already built a relationship with (maybe try your luck with credit unions too). Or, you can apply for a secured card that doesn’t do a credit check.
Secured credit card approval is pretty easy to come by, no matter which card you apply for. A secured card is the easiest type of credit card to get simply because you have to place a refundable security deposit, the amount of which usually becomes your spending limit. As a result, secured cards prevent you from spending more than you put down, making it less risky for credit card companies to approve people with damaged credit. And since you pretty much pre-pay for your purchases with a secured card, past payment problems should not keep you from getting approved.… read full answer
Given their safeguards, you might assume that secured credit cards offer guaranteed approval. But that’s not the case. There are certain requirements that anyone must satisfy to get a credit card.
Here are the basic secured credit card approval requirements:
18+ years old
$200+ for a refundable security deposit
Enough income for monthly bill payments
U.S. mailing address
Social Security number (ITIN or passport accepted in some cases)
Some secured credit cards are harder to get than others, though. Requirements vary by credit card company. And some issuers won’t approve anyone with a non-discharged bankruptcy, a tax lien or certain other types of negative records on their credit report.
But there’s a flip side to that, too. Secured credit card approval is very easy to get if you choose the right offer. A handful of cards don’t even do a credit check when you apply.
Here are the best easy approval secured credit cards:
If you’re less concerned with easy approval than getting the best terms, you should also consider the Capital One Secured Mastercard and the Discover it Secured Card. Neither charges an annual fee, and Discover it offers pretty good rewards.
Secured credit cards do build credit, as all major secured cards report account information to at least one of the big three credit bureaus every month. That gives you the opportunity to add positive info to your credit report, which is the key to building credit. Whether the credit that you build with your secured card is good or bad depends on your ability to pay the bills on time. You can also build credit just by having a secured card open, even if you don’t use it to make purchases. … read full answer
A secured card will build credit for you as soon as the first month after you open it. That’s when information about the card may show up on your credit report, perhaps giving you a report for the first time. Credit scores are based on credit reports, and some models can produce a score with as little as one month of data.
If you use a secured credit card irresponsibly, maxing it out or missing payments, you’ll have negative information on your credit report. That can lead to a bad credit score. But on the flip side, responsible use of a secured card builds credit just as well as any unsecured card. The only difference between a secured card and an unsecured card is that secured cards require a security deposit and give you a credit limit equal to that deposit. Secured and unsecured cards look the same, both physically and on credit reports.
Here’s how secured cards build credit:
All major secured credit cards report to 1-3 of the major credit bureaus on a monthly basis.
Secured credit cards report information about your payment history, balance, spending limit and more to the credit bureaus each month.
The information secured cards report to the bureaus contributes to your credit history.
Responsible use of a secured card results in positive information being reported, helping to cover up past mistakes or build out a thin file.
The key to building credit with a secured card is to never miss a due date, or to just never use your card. As long as your account is open and in good standing, you’re in good shape.
Keeping your statement balance below 30% of your credit limit will help you build credit faster with a secured card.
Secured cards are the best credit cards to use if building credit is your main objective. And they’re particularly useful for rebuilding credit after mistakes. Not only do secured cards report to the credit bureaus, but they also approve even applicants with bad credit. Some don’t even do a credit check. And secured cards are known for low fees. The high approval odds and low fees are all because of the refundable security deposit.
But just because all major secured credit cards can help you build credit does not mean they’re equally attractive. They differ in several important areas, including their annual fees, minimum deposit requirements and rewards. It’s important to shop around and pick the best card for you.
Yes, you can rent a car with a secured credit card. But to rent a car with a secured card, you need to have enough available credit to accommodate the hold that the rental agency will put on your card. That’s the case with any credit card, yet it’s a bigger concern with secured credit cards because the spending limit on a secured card is equal to the amount of the security deposit you put down.… read full answer
When you basically have to pre-pay for all of your purchases, you’re unlikely to have as high of a spending limit as you would otherwise. So even if you have enough credit available to cover the cost of your rental, plus incidentals, renting a car with a credit card could make other purchases difficult to complete until the rental company releases the hold on your account. Using a large portion of your credit for a car rental may also increase your credit utilization, which is bad for your credit score.
What you should do next really depends on the card that denies you and the stated reason for rejection. Some cards (like Discover it secured) won't take you in if you've got a bankruptcy. Even Opensky can reject you if they can't verify your identity. No card is 100% guaranteed approval. But if you get rejected for a secured card, you’ll probably have better luck applying for another one, or making sure you can verify your identity and mailing address.
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