Yes, applying for a secured card does count as a hard inquiry most of the time. Except for a handful of secured credit cards with no credit check, such as the OpenSky® Secured Visa® Credit Card and the Applied Bank® Secured Visa® Gold Preferred® Credit Card, applying for a secured credit card will result in a hard inquiry on the applicant’s credit report. That is the case with unsecured credit cards, too.
A hard inquiry, also known as a hard pull, will likely drop your credit score by a few points temporarily. But if you haven’t had any hard pulls conducted on your credit report over the past six months and you don’t plan on applying for a sizable loan in the next few months, this shouldn’t be a problem. Your credit score should rebound from a hard inquiry within a few months.
Also, remember that even though your credit score may drop after you apply, responsible use of a secured card will ultimately help your score much more than the inquiry will hurt it. The hard pull will likely be worth it, in other words, especially since secured cards tend to be pretty easy to get approved for. You can track your progress with free daily credit score and report updates from WalletHub.
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 turned down 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.… read full answer
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.
There is no minimum credit score needed for a secured card, since secured credit cards are designed for people with bad or limited credit. Some secured credit cards, such as the OpenSky® Secured Visa® Credit Card, won’t even check your credit when you apply.
It is possible to get denied for a secured credit card, though – even one that doesn’t check your credit. You still need to be at least 18 years old and satisfy the other basic eligibility requirements.
If you’re denied for a secured card, it could mean that you don’t have sufficient income to cover a security deposit and minimum payments, or that your credit history shows recent and serious financial problems like bankruptcy. The specifics vary by card and card issuer. But if you’re denied for one secured card, you could still be approved for another. A secured card is the easiest type of credit card to get, after all.
Improving your credit score with 100 points can be challenging, but that depends on how bad your credit score currently is.
In general, improving a credit score is a lengthy process, but with a flawless payment history, a credit utilization lower than 30% and 0 negatives, it's probable. Impossible to predict, it depends from one account to another.… read full answer
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