Secured card, patience needed to boost score


Opening Credits
Columnist Erica Sandberg
Erica Sandberg is a prominent personal finance authority and author of "Expecting Money: The Essential Financial Plan for New and Growing Families." She writes "Opening Credits," a weekly reader Q&A column about issues for people who are new to credit, for

Ask a question.

'Opening Credits' stories

Question Dear Opening Credits,
I was wondering. How can I get my credit score up with bad credit? I had a car loan and paid that off early and currently I have one credit card (Victoria Secret) that I barely use. I use about $40/month every month – just enough to pay it off, but yet my credit score is still the same. What can I do if no one wants to approve me? And also, what do you think about the Capital One secured card? – Tiffany


Dear Tiffany,
You already own the basic tools necessary to build a solid credit score! Can you acquire more instruments, then use them to increase your rating further? Absolutely, but let’s begin with what you have: an installment loan and a credit card. With these – and the natural passage of time – you can begin to achieve impressive credit scores.

All the financial information that is listed on your TransUnion, Experian and Equifax consumer credit reports is factored into your credit scores. The most commonly used scoring system in the United States is the FICO, but the VantageScore, introduced in 2006, is gaining ground. They rank information in slightly different ways, but as long as you develop a long and consistent history of using credit regularly, but also sending payments on time and keeping your debt-to-credit-limit ratio low, you’ll be in fine shape with either.

The car loan you’ve were managing is definitely helping your credit score. It’s showing that you’re financially responsible. Keep it up.

You seem to be using the credit card well, too. A small, monthly charge that you repay in full is the correct strategy. Maybe the account is still young, though. You’ll need many cycles indicating such wonderful behavior on your report to prove to other lenders that you’re a low-risk customer.

The problem is that eventually you’ll have more than enough lingerie, so you may soon not have much use for this store card. Another credit card – a general-purpose card co-branded with Visa or MasterCard and accepted everywhere – will work to your advantage.

Like most credit card issuers, Capital One offers a secured card option, and these products are perfect for people who have unestablished or poor credit ratings. Collateralized credit cards come with a forced savings component: The amount you put down as collateral is fully refundable when you close the account with no balance due. That’s valuable security, not just for the issuer, but for you! Just make sure the issuer reports to the three major credit reporting agencies before you apply, as not all do. (The Capital One Secured MasterCard does, in fact, report to the three.)

If you choose to apply for a secured card, the interest rates tend to be quite high, so you don’t want to roll over any balances from month to month. If you pay off the card every month, you can avoid incurring interest charges. When you get the card, charge the same way as with the other. With two cards in use, you’ll ensure your reports are filled with the type of data that creates high credit scores.

What might be holding your score back is something from the past. Most negative information remains on a credit report for a total of seven years. It’s possible that you have late payments, defaults or collection activity still on your reports. If so, the dings are being factored into your scores, slowing down progress. Eventually they’ll drop off. When they do, you should see a score lift. Oh, and if you do have a debt that recently went into collections, pay it off. The newest version of FICO and the current version of VantageScore ignore satisfied collection accounts. Boom. Instant scoring points will come your way!

See related: 3 ways to strengthen weak or nonexistent credit, Help your credit score rebound after a fall, 9 things to know about secured cards,

Meet's reader Q&A experts

Does a personal finance problem have you worried? Monday through Saturday,'s Q&A experts answer questions from readers. Ask a question, or click on any expert to see their previous answers.

Published: March 23, 2016

Join the discussion
We encourage an active and insightful conversation among our users. Please help us keep our community civil and respectful. For your safety, do not disclose confidential or personal information such as bank account numbers or social security numbers. Anything you post may be disclosed, published, transmitted or reused.

If you are commenting using a Facebook account, your profile information may be displayed with your comment depending on your privacy settings. By leaving the 'Post to Facebook' box selected, your comment will be published to your Facebook profile in addition to the space below.

The editorial content on is not sponsored by any bank or credit card issuer. The journalists in the editorial department are separate from the company's business operations. The comments posted below are not provided, reviewed or approved by any company mentioned in our editorial content. Additionally, any companies mentioned in the content do not assume responsibility to ensure that all posts and/or questions are answered.

Follow Us

Updated: 10-21-2016

Weekly newsletter
Get the latest news, advice, articles and tips delivered to your inbox. It's FREE.