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I Was Denied a Secured Credit Card. What Do I Do?

Written by Oliver Laker on August 1, 2013.

If youve been denied for a secured credit card, dont give up hope yet there are still opportunities for you to rehabilitate your bad credit and get a loan. Well walk through the various alternatives to secured credit cards that will still build your credit.

First step: Why were you denied for a secured card?

Remember: If you get denied credit, you have a right to know exactly why. Is it because you recently declared bankruptcy? Do you have a history of missed payments? Contact the lender to see why you got denied, and make sure it wasnt an error on your credit report. According to an FTC survey, 25% of credit reports contain serious errors.

Next, consider your current bank or a credit union

If you already have a relationship with a bank (such as a checking account) you might find it easier to qualify for a secured credit card. Rather than applying for a secured card from a new bank, go into your current banks branch in person (if possible) and try for a secured offer there. Alternatively, check out your local credit union. Credit unions are not-for-profit and tend to have more affordable products; community development credit unions in particular are great for helping you rebuild credit.

If you still cant get a secured card

  • Extend a line of credit
  • Report to credit bureaus

Secured share loans from credit unions. These are basically like secured credit cards. You deposit your money into a savings account, then borrow against that money. Since its no risk to the lender, you get a low interest rate, but it still helps build credit. Here are a few options:

Credit builder loans from credit unions. These loans are meant for people looking to build up their credit, and usually range from $200-$1,000. Check your local credit union to see whats offered.

No credit check secured cards. This can be an expensive option if you want a secured credit card. The OpenSky Secured has no credit check, but still reports to the major credit bureaus. It has a $29 annual fee, and its interest rate is pretty high at 17.50%, so try not to carry a balance. This can be a decent if youve previously been denied a secured card, but have the money to post the security deposit.

Even though youve been denied for a secured credit card, dont give up hope just yet. You can still build up your credit and get on the path to financial fitness.

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