Secured Card Choice

Do Secured Credit Cards Pull Your Credit?

Want a credit card without a credit check? A secured card could be the answer. This type of credit card is specifically designed for people trying to build or repair their credit. Do secured cards pull credit? Can you get a secured card with bad credit? Let's take a closer look at how secured card applications work.

do secured credit cards pull your credit?

Most Secured Cards Do Not Pull Credit for Applications

For the most part, secured cards do not pull credit as part of the application process. They cater to people with limited or damaged credit. Thus they do not involve credit reports during approval.

When you get approved for a secured credit card, you provide a deposit that acts as the line of credit on the card. The card issuer is not out any money and assumes almost no risk by approving you. This is another reason why secured card issuers do not review credit histories. They aren't as concerned about your credit worthiness because they have nothing to lose. You get a chance at a fresh start, and an opportunity to strengthen your credit for future endeavors.

Top Secured Cards with No Credit Check

Check out these top secured credit card offers with absolutely no credit check or minimum credit score required! All three cards report to the major credit bureaus so good account management on your part will help build your credit over time.

OpenSky® Secured Visa® Credit Card

The OpenSky® Secured Visa® Credit Card requires no credit check for approval. OpenSky has an active Facebook community where cardholders can share their tips, success stories, and much more. The card carries a 17.39% variable APR, along with a $35 annual fee.

Applied Bank® Secured Visa® Gold Preferred® Credit Card

The Applied Bank® Secured Visa® Gold Preferred® Credit Card boasts a low fixed APR of 9.99%. You can deposit anywhere from $200 to $1,000 to open the account, and you can add even more funds to it in the future – up to $5,000. This secured card has an annual fee of $48 and fast approval process.

First Progress Platinum Prestige Mastercard® Secured Credit Card

The First Progress Platinum Prestige Mastercard® Secured Credit Card is a full-featured Mastercard. You can use it for car rentals, hotel reservations, and almost any purchase you can think of. The card supports deposits between $200 and $2,000, and it has a low variable APR of 9.99%.

Why Do I Have to Provide a Social Security Number for a Secured Credit Card?

Even though most secured cards do not pull credit, they do require you to provide your Social Security Number during the application. This is used for identity verification, not credit verification. Federal law requires financial institutions to verify an applicant's identity before opening account. This process helps reduce the risk of money laundering, terrorism funding, and other criminal activities.

In addition to your SSN, you may need to provide your driver's license or other identifying documents during the application process. Once again, this is not needed to verify your credit. It is only used to ensure you are who you say you are. On the flip side, this process helps prevent other people from falsely opening an account in your name. That protects your credit!

Reasons to Avoid a Hard Inquiry on Your Credit Report

You might be thinking, "What's the big deal if they pull my credit?" Having your credit looked at could hurt your credit score. In fact, hard inquiries account for 10% of your FICO score. If you have too many inquiries in a short amount of time, you could see a noticeable drop in your score.

It's important to note the difference between a soft credit inquiry and a hard credit inquiry. A soft inquiry (otherwise known as a soft pull) happens when you check your own credit or when a lender checks your credit to pre-approve you for an offer. Those card offer you get in the mail or online? They're the result of soft pulls. They do not impact your credit score.

A hard inquiry occurs when a lender pulls your credit report and credit score from a credit bureau. If you apply for an automotive loan, credit card, personal loan, mortgage loan, or other line of credit, you will receive a hard inquiry on your credit report. This will remain on your credit for up to two years, but the weight it carries will diminish with time.

Since most secured cards do not pull credit, you don't have to worry about any credit damage when you open the account. You can boost your score with on-time payments, and you don't have to go into the process at a deficit.

What to Expect from Your Secured Card Application

Applying for a secured card is quick and easy. Most applications take less than five minutes, and you can get approval in the same amount of time. The lender does not need to review your credit report, so the approval process is much faster than traditional credit cards.

Most secured card applications will ask for the following information:

  • Full Name
  • Home Address
  • Email Address
  • Social Security Number
  • Date of Birth
  • Checking account information (to fund the card)

The application may also ask for your estimated monthly income, including unemployment benefits, Social Security benefits, and your salary/wages from work. You don't need a job to get a secured credit card, but you will need some form of income to report. This tells the lender that you can afford to make payments when you use your card.

Once you provide the information and agree to the terms for the card, you'll be able asked to provide the funding information for the security deposit. Some cards offer an "apply now, fund later" option, where you complete the application and make the deposit at a later time. Others require a checking account, debit card or prepaid card to fund the account at the time of application.

After your application is approved, you'll receive a receipt for your deposit and a timeframe for when your secured card will arrive by mail. This usually happens within 10 business days, but some cards offer expedited shipping for an additional fee. You may receive a temporary card number to use for online purchases, or you may have to wait for the card to arrive before using the account.

How to Build Credit with a Secured Credit Card

It's easy to get approved for a secured credit card, but that's only the first step in the credit building process. In order to fully take advantage of this opportunity, you need smart money habits that can transition to an unsecured credit card. Follow these tips to boost your credit score with a secured credit card:

  • Use your secured card in place of your bank debit card. Make this your go-to card for daily purchases. Save the money in your bank account that you would have spent for those purchases, and use it to pay off your card balance each month. This shows consistent card activity and keeps your credit utilization rate to a minimum.
  • Be aware of the fees on your secured card. The types of fees you incur will vary by card, and many of them are avoidable. Bypass the ATM fee by checking your balance online. Avoid the late payment fee by making your monthly payments before they're due. Review your card terms closely so you can keep your costs down.
  • Don't spend what you can't repay quickly. Emergencies happen, and sometimes you need to put a big expense on your credit card. There's nothing wrong with that, as long as you pay off the balance quickly. Before you swipe your card, commit to a monthly payment plan to pay off the balance. This will keep your account in good standing and lower your interest costs.
  • Make payments within the grace period to avoid interest. The grace period for most secured credit cards is 21-25 days. As long as you pay off your balance in that time, you won't have to pay any interest.
  • Monitor your credit score. Many secured cards come with free monthly credit scores. Keep track of your progress and use that as motivation to keep building your credit. If your score drops unexpectedly, review your credit reports for errors. Report those issues right away to minimize damage.
  • Reflect on your past credit struggles. What did you do wrong in the past? What would you have done differently? You've seen how your past decisions affected your credit. You can use that information to forge a better future for your finances.

The journey to great credit starts with the right secured credit card. Review the many options available here at Secured Card Choice, and find the card that best suits your overall needs